The Constitutional Court found no 283 / 2017 Coll.
The Constitutional Court found of 11 July 2017 sp. zn.
Valid
The Constitutional Tribunal found
Text versions:
04.09.2017
283
FIND
The Constitutional Court
On behalf of the Republic
On 11 July 2017, the Constitutional Court decided under sp. zn.
as follows:
Motion denied.
Reasons
Subject matter
1. The Regional Court in Ostrava - a branch in Olomouc (hereinafter referred to as "the applicant"), on behalf of which a single judge of the Chamber 16 INS Mgr. Martin Šulák, acting in accordance with the procedure laid down in Article 95 (2) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution") and § 64 (3) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, (hereinafter referred to as "the Law on the Constitutional Court"), submitted a proposal for the annulment of the provisions of § 61 (2) of the First and § 66 of Act No. 182 / 2006 Coll., on the bankruptcy and the methods of its resolution (hereinafter referred to as "InsZ").
Procedure before the applicant
2. In the insolvency case sp. zn. KSOL 16 INS 18133 / 2014, before the appellant, the first meeting of creditors took place on 18 November 2014 for the purpose of setting up the creditor committee (Paragraph 48 (2), third sentence, InsZ), but none of the creditors applied for without an apology. Some of these creditors have indicated, when entering the claim, that they do not wish to be appointed to the creditor committee. It was therefore necessary to apply Paragraph 61 (2) of the first sentence of the InsZ, according to which the jurisdiction of the creditor committee will be exercised by the insolvency court, i.e. the appellant, after the meeting of creditors to which that authority was not appointed.
3. In this procedure, the appellant concluded, in the context of its decision-making activities, that the provisions of § 61 (2), first sentence and § 66 InsZ are contrary to the constitutional order. Therefore, by order of 18 November 2014, KSOL 16 INS 18133 / 2014-B4 suspended the procedure under Paragraph 109 (1) (c) of the Civil Code (hereinafter referred to as "o. s. s. ') and at the same time referred to the Constitutional Court for annulment of the above provisions.
Recital of the proposal
4. According to the appellant, the creditor committee is the body in whose hands the powers of creditors are delegated and which protects the common interest of creditors [§ 58 (1) and § 2 (j) of the insolvency law]. Its powers, decision-making work and supervisory work are demonstrated in § 58 (2) of the Insolvency Act, and may take any decisions relating to the powers of creditors in proceedings. The participants in insolvency proceedings are debtors and creditors who exercise their right to the debtor (Section 14 (1) of the insolvency law). If the insolvency judge decides on the rights and obligations of the parties and exercises at the same time the jurisdiction of one of the parties to the proceedings - creditors, such an exercise (the jurisdiction of the creditor committee) is, in the view of the appellant, contrary to the constitutional order. This was specified by the applicant as follows:
5. First of all, it is a breach of one of the principles of a fair trial - the presumption of impartiality of the judge, since the judge who acts in the case and also exercises the jurisdiction of the party to the proceedings is not impartial within the meaning of Article 82 of the Constitution. In this context, the appellant points out the finding of 31.3.2005 sp. zn. II. ÚS 629 / 04 (N 69 / 36 SbNU 731), where the Constitutional Court concluded in respect of the provision of a guardian to a person of unknown residence that the practice in which the guardians are appointed by the court's decision-makers is in complete conflict with the constitutional principles to be reached by the guardian to the absent party. Paragraph 61 (2) of the first sentence of the first InsZ goes further, since the judge and the creditor committee representing the interests of a group of parties are blending in one person.
6. The Cf. Committee (ref. Judge of the Rapporteur: under Paragraph 60 (1) of the Insolvency Act its members and alternates) also have a number of duties; The same obligations shall apply to the court which exercises the powers of the creditor committee. The obligation of loyalty to creditors, regardless of the interests of other persons - as well as to another party - is essential. Another duty of the judge is to have expertise in defending the common interest of creditors. The State is also liable for damage or other damage caused by the breach of these obligations. Here, among other things, there is a contradiction with Article 90 of the Constitution, because the courts are called mainly to provide protection for rights.
7. In addition, the insolvency court is not able to properly exercise the powers of the creditors' committee for its high utilization, with creditors being very diverse. The Court of First Instance shall exercise that competence even where there is a dispute between the creditor and the debtor where the debtor denied the claim claimed by the creditor. It is not possible to exclude itself from its subordinate position vis-à-vis creditors because it cannot call a new meeting of creditors, only on the basis of a proposal from the insolvency administrator or at least two creditors (§ 61 (2), second sentence, § 47 (1) of the insolvency law), whereas the insolvency administrator does not submit such a proposal for the non-interest of the creditors and the creditors themselves for reasons of non-interest.
8. The appellant further points out that, as a result of the construction in question, an insoluble and constitutional situation arises. According to Section 216 (2) of the Insolvency Act, the judge is required to question the debtor for a declaration of property, but at the same time he has the right as a creditor to question the debtor. According to Section 271 of the Insolvency Act, a joint-equity settlement agreement is approved by the insolvency court once as a creditor body and once as a court, with the possibility of a situation where it is approved in one position, not in the other, and a similar situation occurs in the case of off-auction sales pursuant to § 289 InsZ.
9. The appellant also points out the need to look at the matter from the point of view of the debtor, where the court may not, by its reasoning, let alone the representation of the party to the proceedings, fill a gap in the statements or evidence of one of the parties to the proceedings to such an extent as would undermine the material equality of the parties to the proceedings. From the point of view of the creditors, this is a financially advantageous solution, since their rights are exercised and their interests are represented by a judge who is bound by the obligation of loyalty to the creditors and who, at the same time, decides which works completely free of charge, and must act professionally and the State is responsible for the damage or other damage caused to the creditors by the judge, in a situation where he is unable to provide proper protection of their interests, in particular with regard to another function to which the Constitution is intended, but also for his capacity.
10. The appellant points out the explanatory memorandum to the original wording of Paragraph 66 of the Insolvency Act, which states: "No proposal has been made to replace the decision of the creditor committee for its passivity by the decision of the insolvency court. The Court and the creditor committee are different procedural bodies and have different functions in the process; the court cannot, therefore, replace the creditor committee even in the absence of its action (which must be dealt with by other means). 'The legislature resolved this situation by requiring the court to seek at least among the creditors of the interim creditors' committee, which the courts failed to do in view of the lack of interest of the creditors, thus creating a situation in which the court, in most cases, exercised the jurisdiction of the creditors' committee.
11. The applicant pointed out that, since this adjustment proved to be ineffective, the so-called revision amendment, represented by Act No 294 / 2013 Coll., amending Act No 182 / 2006 Coll., on the bankruptcy and methods of its resolution (insolvency law), as amended, and Act No 312 / 2006 Coll., on insolvency administrators, as amended, with the existing solution. The general part of the explanatory memorandum states: "The problem is that, in cases detected, it is not possible to find a creditor willing to perform his duties in the provisional committee. In the end, the insolvency court is still acting as a creditor committee in this type of case. Before that, however, it must make unnecessary efforts to ensure that, under the procedural rules in question, the creditor authority's provisions are unnecessarily attempted. [...] The same problems are caused by the institute of alternates of the members of the creditor committee; they also give up their duties. In practice, even for large insolvency proceedings, it is difficult to fill at least the seats of the members of the creditors' committee and the alternates' institutes increase the transaction costs of insolvency proceedings. The draft law therefore provides for a change in the rules governing the choice of the creditor committee and the appointment and election of members and alternates of the creditor committee, as well as a change in the rules under which the insolvency court exercises its jurisdiction. 'In the specific part of the explanatory memorandum, the following text is added:" The draft amendment of Sections 61 (2), 65 and 66 of the Insolvency Act complements the abandonment of the principle of the automatic appointment of the interim creditor committee, as soon as the creditor committee has exhausted its choice, the insolvency court shall, pending any subsequent meeting of creditors, act as the creditor committee.'
12. According to the appellant, the court does not have the opportunity to withdraw from such a position, having regard to the provisions of Paragraph 62 (2), second sentence, InsZ. As is apparent from the insolvency register, the court shall exercise the jurisdiction of the creditor authority in almost every debt relief and in a substantial majority of the bankruptcy proceedings throughout the remainder of the proceedings, each insolvency judge having in the Chamber at least one thousand and more outstanding cases and the insolvency courts shall exercise the jurisdiction of the creditor committee in more than 100 000 cases throughout the Republic. According to the appellant, the legislator knew about the violation of the legislation in question with the constitutional order, but did not address it by other means. At the same time, he admits that the legislator was guided by good intentions in its amendment efforts, when the court sought to ease work and secure the lowest transaction costs in insolvency proceedings, which he also succeeded in doing, but at the cost of sacrificing constitutionality.
13. In conclusion, the appellant referred to the terms of an independent and impartial court and a legal judge within the meaning of Articles 36 (1) and 38 (1) of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as the Charter) and Article 6 (1) of the Convention on the Protection of Human Rights and Fundamental Freedoms (hereinafter referred to as the "Convention"), with the view that the European Court of Human Rights (hereinafter referred to as the "ECHR") has interpreted that the impartiality of the Court has two aspects, it is not enough that the judge does not feel subjectively prejudiced in relation to the participants or the subject matter, but that legitimate doubts about its impartiality must be excluded, even if the appearance in that respect may have meaning; For example, the Piersack decision against Belgium of 21 September 1982 states that a judge should be excluded from the decision of a judge for whom there is a legitimate concern that it is not entirely impartial, as the credibility of the judiciary must be at stake in a democratic society and, in particular, in the parties. The requirements for the independence and impartiality of the judge constitute a ban on the independence of legislative and executive powers in these Constitution of protected interests.
14. In view of the above, the appellant concluded that Paragraph 61 (2) of the first sentence of the first InsZ constituted a contradiction with the principle of independence and impartiality of the judge, since there is, objectively seen, a legitimate doubt as to its impartiality, since it provides protection for the interests of one of the parties, irrespective of the other party, and is bound by the obligation of loyalty, that is to the other party's right to a fair trial. Paragraph 66 (1) to (3) of the InsZ is linked to the provision cited, which thus contravenes the same constitutional standards.
Observations of the parties and the intervener
15. The Chamber of Deputies of the Parliament of the Czech Republic ("the Chamber of Deputies"), in its comments on the proposal of 17. 12. 2014, signed by President Jan Hamakk, limited itself to the course of the legislative process. According to him, the amendments to the contested legal provisions were contained in the Government's draft amendment to the Insolvency Act and were submitted to the Chamber of Deputies as a print 929. It was discussed at first reading on 19 March 2013, after which it was ordered to the Constitutional Law Committee. The Constitutional Legal Committee discussed the press at its meeting of 26 April 2013 and 10 June 2013, and by resolution recommended approving the draft law as amended. The second reading took place on 12 June 2013 and the amendments were processed as press 929 / 3, but none of them concerned the contested provisions. The third reading of the proposal took place on 8 August 2013 and the bill was approved. The Act was published in the Collection of Laws under No. 294 / 2013 Coll. Both chambers of Parliament of the Czech Republic have agreed to the draft law by constitutional procedure, the law has been signed by the relevant constitutional authorities and has also been duly declared.
16. The Senate of the Parliament of the Czech Republic ("the Senate") stated that it had received the relevant bill on 16. 8. 2013 and was assigned a press number 161 in the Senate Registry of the 9th term of office. The Senate Organising Committee appointed it to discuss the Constitutional-Legal Committee which discussed the proposal at its 21st meeting on 3 September 2013 and adopted Resolution No 95 (Press 161 / 1), which recommended the Senate to approve the bill in the version referred to by the Chamber of Deputies, which was duly agreed at the 13th meeting by Resolution No 327 of 12 September 2013, when in vote No 27 of the 57 Senators present voted in favour of its approval by 47 Senators, nobody was against it. During the examination of the proposal, Minister of Justice Marie Benešová spoke to the draftsman of the Law, stating only in general that "[n] the proposed complex of changes is intended to streamline insolvency proceedings on the exercise of the powers of the creditor committee where creditors are not interested in taking part in the proceedings', the rapporteur of the Constitutional-Legal Committee Jiří Dienstbier then stated that" there were no major comments in the Constitutional-Legal Committee 'on the draft law. According to the Senate, the draft law was adopted within the limits of the Constitution laid down by competence and in a constitutional manner.
17. The proposal was also addressed by the Government of the Czech Republic ("the Government '), which entered the proceedings on the basis of its Resolution of 15 December 2014 No 1076 as an intervener under Paragraph 69 (2) of the Law on the Constitutional Court, in its observations of 19 January 2015, signed by the Minister for Human Rights, Equal Opportunities and Legislation, Jiří Dienstbier, who was responsible for representing the Government in the proceedings. In this case, the Government pointed out the specific nature of the insolvency proceedings in which the elements of the different types of proceedings are mixed, with the fact that it is not possible to take over without any further concept and principles of other types of proceedings, but it must be treated as a specific type of procedure, which is largely guided by its own principles and logic. Moreover, the Insolvency Act is not, according to the Government, merely a procedural regulation, but intersects with elements of both substantive and procedural law. The Government has come out of the fact that insolvency law relieves creditors of the right to individual recovery of claims and replaces them with the right to participate in the decision on how the debtor's property should be dealt with and pointed out that the creditor committee cannot be identified with the party to the proceedings, which are debtors and creditors. The CSA is a special procedural body, as is the meeting of creditors, insolvency administrators or other entities. The Act gives the creditor authorities a role, including the protection of the interests of creditors, but the exercise of their powers is specifically defined and is not identifiable as a party to proceedings, as is known from other types of proceedings.
18. The Government also referred to the role of court in insolvency proceedings, which must perform tasks which it does not have to perform in other types of proceedings. In general, this role is expressed in Section 10 (b) of the Insolvency Act, according to which it oversees the procedure and activities of other procedural bodies and decides on matters related to it; In accordance with the Insolvency Act, for example, it oversees the activities of the Insolvency Trustee (§ 11 (2)) and gives its consent to some of its activities (§ 227, 289, § 298 (2), § 372 (1)), significantly intervenes in the sphere of other procedural entities or replaces them in their role, for example, where the court appointed by the Insolvency Trustee is not replaced in the vast majority, even if creditors can decide on it (§ 61 (2), and § 66), the Insolvency Court determines the method of settling creditors, when it is not chosen by the creditor committee (§ 58 (3), or gives instructions to the creditors to ensure that they do not exist (§ 58 (§ 61 (2), and § 66), respectively), it does not decide on the method of settling creditors (§ 149).
19. With a reference to Thomas Richter's opinion (in Insolvency Law. Issue 1. Prague: ASPI, Wolters Kluwer, 2008, p. 143 and 164), the Government further stated that one of the reasons for the active role of the insolvency court in relation to the creditor authorities is, according to the Government, the "general rational apathy 'of creditors measuring the costs associated with the application of the claim and the potential return, which is manifested in a number of insolvency proceedings by the failure of the creditor authorities. This is an immanent feature which is interlinked with the entire legislation implemented by the insolvency law. Replacement of missing actions by a court is not even an exclusive domain of insolvency law, as is the case, for example, from the provisions of § 50a (2) or § 715 of the Act No. 40 / 1964 Coll., Civil Code, § 338k § 5 of the Civil Code, § 8 and 60 of Act No. 121 / 2000 Coll., on copyright law, and on the amendment of certain laws (Copyright Act), § 1404 (New) Civil Code, § 5 of Act No. 87 / 1991 Coll., on extrajudicial rehabilitation, as amended, and § 5 of Law No. 403 / 1990 Coll., on the mitigation of the consequences of certain property injustices, as amended.
20. In addition, the Government quotes from the explanatory note to Act No. 294 / 2013 Coll., where the experience with the original legislation is described. The amendment removed the situation in which the court had to attempt to appoint an interim creditor committee, although it was quite clear that it would not be established. As a superfluous "phase" this step was also seen in part by judicial practice, as the document "Public Consultation of the Ministry of Justice of the Czech Republic." Experience with new insolvency proceedings so far. Summary table at 20.7.2011 '. According to the insolvency law, the insolvency court may appoint an interim creditor committee, but that is at its discretion. If the application of the debtor, the creditor applied for or the preliminary administrator is made, it is appointed without discretion (Paragraph 61 (1) InsZ), the amendment of Paragraph 66 InsZ responds to situations where the number of members of the creditor committee falls below the absolute majority of the members and thus the quorum is not available.
21. The court considers that the court considers the form of its exercise as an important aspect of the jurisdiction of the creditor committee, when the acts taken under the jurisdiction of the creditor committee are carried out by the court in the context of the supervision activities provided for in Sections 10 and 11 of the insolvency law in the form of a resolution pursuant to § 7 InsZ and by the appropriate application of § 167 o. s. The jurisdiction of the creditor committee is therefore not exercised by the insolvency court as "representative 'or" guardian' of the creditor committee. It is therefore not the case that the court is in a subordinate position to creditors from which it cannot be removed, as stated by the appellant. In exercising the powers of the creditor committee, the court shall be bound by nothing other than law, namely by the instructions of one of the parties or other procedural body.
22. In conclusion, the Government takes the view that a key definition of the role of the insolvency court exercising the jurisdiction of the creditor body will be the constitutional assessment of the proposal. Should this role be identified with the representation of one procedural party, it would be possible to conclude on a breach of the principle of impartiality of the court. However, if it is seen as completing the missing article necessary to fulfil the purpose of insolvency proceedings, the legal basis for such proceedings is not to be regarded as contradictory to constitutional order. The insolvency court plays a very active role, while there is a whole range of acts by which it gives its consent or by which it takes its decision for other bodies. It is not possible to identify the exercise of the powers of the creditor committee with the taking over of all legal rights and obligations of the creditor committee. The Court of First Instance, by taking over its jurisdiction, has the task of using judicial instruments of supervision to comply with one of the principles of insolvency proceedings laid down in Section 5 (a) of the Insolvency Act. For these reasons, the Government has proposed that the Constitutional Court reject the proposal.
23. The Ombudsman did not exercise her right to intervene, but, in her observations of 1 December 2014, she identified the proposal to repeal the above provisions of the insolvency law as well as its justification.
Replication of the applicant
24. In its reply to the Government's observations, the appellant stated that the Government had indicated a set of situations in which the insolvency court intervened in the sphere of other procedural entities, demonstrating its active role in insolvency proceedings. In all these cases, it is a single act of the court dealing with a specific situation, which is, in addition to the only one, the exercise of the powers of the creditor committee by the court under the contested provisions. This is no longer a single action but a continuous activity of the court in favour of one party. In addition, the obligation to take over and protect the rights and obligations of creditors in the entire insolvency proceedings cannot be derived from that active role, and this is considered to be an improper feature entirely fitting into the nature of the proceedings. On the contrary, it is the only non-organically incorporated continuous obligation. The court may not defend the interests of any party to proceedings which are creditors and the court shall assume the rights and obligations of the body which represents and protects the interests of creditors de facto, unlike any other party to the proceedings - the debtor.
25. The "general rational apathy of creditors" is the unfortunate but expected result of current legislation. The insolvency law has created a privileged group of parties who do not have to worry about their success in their private law case, since it has a duty to take care of the court. There is no rational reason for such an advantage and the government had many years to change this situation. If the government mentioned the possibility of appointing an interim creditor committee, it is only a temporary solution at the beginning of the procedure. If the jurisdiction of the creditor committee is exercised by the insolvency court in the context of the supervision activity, as the Government has stated, the court, according to the appellant, is difficult to carry out at the same time the rights and obligations of one of the parties on a continuous basis. The interests of justice and the parties often differ and cannot be defended simultaneously. If the Government stated that the court should not assume all the rights and obligations of the creditor committee, such an approach is not possible, since the insolvency law does not imply which rights and obligations it or should not take. Although the insolvency court is bound by law in the exercise of its powers, it also implies a duty of loyalty to creditors and liability for damages.
26. In conclusion, the appellant draws attention to the explanatory memorandum to the insolvency law, according to which the court and the creditor committee are different entities which perform different functions in the process and therefore the court cannot replace the creditor committee even in its failure to act. The Government has now transformed the exceptional possibility of exercising the Committee's powers by the Court into a rule and no longer reports on its initial interpretation, while, as it follows from its observations, it proposes to view the role of the court in the position of the creditor committee as completing the missing article necessary to fulfil the purpose of the insolvency proceedings. If the principle has not changed, but only the frequency of application of the provision in question, this cannot be agreed to by reason of inconstitutionality. For this reason, the appellant, according to his words, continues to insist on the proposal.
Abandonment of oral proceedings
27. The Constitutional Court, on the basis of the above, concluded that further clarification of the case could not be expected from oral proceedings and therefore abandoned it under the provisions of § 44 of the First Law on the Constitutional Court.
Derogation of the contested provisions
28. Paragraph 61 (2) of the first InsZ (see, however, sub 31) reads as follows:
If the creditor committee has not set up a meeting of creditors convened for that purpose, the insolvency court shall, upon the end of the proceedings, exercise jurisdiction of the creditor committee; This applies mutatis mutandis if the creditors' meeting has not been convened in defaulting.
29. Paragraph 66 of InsZ reads:
(1) If, in the course of insolvency proceedings, the number of members of the creditors' committee set up by the creditors' meetings falls to less than 3 or below the majority, the powers of the creditors' committee shall be exercised by the insolvency court until the confirmation of the new or additional choice of the members of the creditors' committee has been confirmed.
(2) If the lack of members of the creditor committee has not chosen a meeting of creditors to that end by at least 3 or by a majority of the members, the insolvency court shall, upon the end of the proceedings, exercise the jurisdiction of the creditor committee; Article 61 (2), second sentence and Article 61 (3) shall apply mutatis mutandis.
(3) The act of the insolvency court in the exercise of its powers must therefore be indicated.
Proceedings before the Constitutional Court
30. The Constitutional Court first examined whether the procedural conditions of the proceedings were fulfilled. It concluded that the application was submitted by an actively legitimate appellant (Article 64 (3) of the Law on the Constitutional Court in conjunction with Article 95 (2) of the Constitution) and the Constitutional Court is competent to discuss it [Article 87 (1) (a) of the Constitution].
31. It is not an inadmissible proposal (§ 66 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll.). Paragraph 61 (2) of the first sentence of the InsZ (in the contested version) was supplemented by Act No. 64 / 2017 Coll., amending Act No. 182 / 2006 Coll., on the bankruptcy and methods of its resolution (insolvency law), as amended, and by some other laws which, in part of the first Article 1 (24), added the first text to the text (s) at the end of the sentence: "; this is equally true if it was not in the debt of the creditors' meeting called '. This amendment does not in any way concern objections to the inconstitutionality of this text as it merely complements and clarifies it; At the same time, such a situation is not the subject of proceedings before the proposing general court, since, in the present procedure, the creditor's choice of choice has not been established and the appellant's objections are directed against the way in which the legislator decided to resolve such a situation. Paragraph 66 of InsZ, in the contested text, i.e. as amended by Act No 294 / 2013 Coll., has not yet been amended. It should be noted, however, that this provision was not used by the appellant in the initiating procedure in case sp. zn. The application for annulment of Paragraph 61 (2) of the first sentence of the first InsZ would thus result in inapplicability of Paragraph 66 InsZ.
32. The Constitutional Court could therefore proceed to assess whether the contested legislation is not contrary to the constitutional order, i.e. (a) the contested legislation was adopted and issued within the limits of the constitutional competence laid down, (b) the constitutional procedure for such adoption or extradition was followed, and (c) the contested legislation is in accordance with the constitutional order in terms of content (§ 68 (2) of Act No 182 / 1993 Coll., on the Constitutional Court, as amended by Law No 48 / 2002 Coll.).
Review of the procedure for the adoption of the legislative provision under review
33. In assessing whether the contested provisions were adopted within the limits of the Constitution and in a constitutionally prescribed manner, the Constitutional Court came out of the relevant stenoprotocols (available at www.psp.cz) and from the observations of the two chambers of Parliament of the Czech Republic.
34. The Government submitted the draft Act No 294 / 2013 Coll., which amended the contested provisions of the insolvency law to the Chamber of Deputies on 5 March 2013. At the 52nd session of the Chamber of Deputies held on 19 March 2013, a government bill, negotiated as House Press 929, was ordered at first reading to discuss a constitutional legal committee. At its 58th meeting on 10 April 2013, the Constitutional Legal Committee decided to suspend the hearing and adopted amendments to it at the 61st meeting on 29 May 2013, but not to the provisions in question. As part of the second reading of the bill, no amendment was tabled at the 54th session of the Chamber of Deputies on 12 June 2013. The third reading took place at the 57th session of the Chamber of Deputies on 8 August 2013, when the bill was approved in vote 53 (resolution 1745); 130 Members present voted in favour of Bill 94 and no one was against it. The Chamber of Deputies passed the bill on 16 August 2013 to the Senate.
35. The Senate discussed the bill as Senate Press No. 161 (9th term). The bill was first discussed in the Constitutional Legal Committee on 3 September 2013, which approved it in Resolution 95, then discussed it and approved it in the version approved by the Chamber of Deputies and the Senate at its 13th meeting of 12 September 2013 by Resolution 327, when of the 57 senators present voted in favour of 47, nobody was against it.
36. The Approved Act was delivered to the President of the Republic on 17 September 2013, which he signed on the same day and the Prime Minister did so on 20 September 2013. It was then published in the Collection of Laws on 27 September 2013 in the amount of 112 under number 294 / 2013 Coll. without the signature of the President of the Chamber of Deputies, as foreseen by Article 51 of the Constitution and Article 107 (2) of Act No. 90 / 1995 Coll., on the Rules of Procedure of the Chamber of Deputies. The reason for this was that at that time the Chamber of Deputies was dissolved in accordance with Articles 35 (2) and 62 (c) of the Constitution and the Resolution of the Chamber of Deputies of 20 August 2013. However, this does not call into question the proper procedure of the legislative process in the Chamber of Deputies, confirmed by the resolution of its 57th meeting of 8 August 2013, No 1745 (see Sub-34), signed by the President of the Chamber of Deputies, Miroslava Germans and the verifier of Mr Mark Benda. See also paragraphs 13 and 14 of the preamble to the finding of 23.8.2016 sp. zn.
37. In the light of the above, the Constitutional Court finds that Act No 294 / 2013 Coll., which amended the contested provisions of the insolvency law, has been adopted and issued within the limits of the constitutional competence and the constitutionally prescribed manner. It is worth noting that the contested provision of Paragraph 66 (1) of the Insolvency Act had already been examined by the Constitutional Court prior to its amendment by Act No 294 / 2013 Coll., contained a similar arrangement under which the jurisdiction of the creditor committee was to be exercised by the court, but the procedure for the adoption of the Insolvency Act itself had already been examined by the Constitutional Court, and no procedural defects had been identified [see the finding of 1.7.2010 sp. zl. ÚS 14 / 10 (N 133 / 58 SbNU 67; 241 / 2010 Coll.].
38. Similarly, the conditions of Article 95 (2) of the Constitution and Article 64 (3) of the Constitutional Court Act are fulfilled. In the case of the appellant, this is a provision of the law relating to its decision-making activities, which, at least in the case of Paragraph 61 (2) InsZ, is to be used immediately in the resolution of the case; This is the true concrete control of the constitutionality of the law, as follows from the preamble to the factual and legal basis of the case (sub 3 to 4). The application thus fulfils the conditions for proceedings before the Constitutional Court for such a case.
Meritorious review of the proposal
General basis for the review
39. The appellant justified his proposal by the fact that the contested provisions of the insolvency law contravene the principle of the independence and impartiality of the judge and the equality of the parties to the legal (insolvency) proceedings.
40. The Constitutional Court considers that the application must be assessed in the light of the standards contained in the following provisions of the Constitution:
The judicial authority shall be exercised on behalf of the Republic by independent courts.
(1) Judges shall be independent in the performance of their duties. Their impartiality must not be threatened.
(2) A Judge may not be dismissed or transferred to another court against his will; the exceptions resulting in particular from disciplinary liability shall be laid down by law.
(3) The function of judge is not compatible with the function of President of the Republic, Member of Parliament or with any public office function; The law specifies which other activities are incompatible with the exercise of the judicial function.
and, on the one hand, the Charter:
(1) Any person may seek, by a specified procedure, his or her right in an independent and impartial court and in specified cases in another institution.
(3) All participants are equal in the proceedings.
where appropriate, the Convention:
1. Everyone shall have the right to have his or her affairs dealt with in a fair, public and appropriate manner by an independent and impartial court established by law, which shall decide on his or her civil rights or obligations or on the validity of any criminal charges against him. [...]
41. To interpret Articles 81 and 82 of the Constitution, the Constitutional Court stated, for example, in the finding of 18.6.2002 sp. zn. Pl. ÚS 7 / 02 (N 78 / 26 SbNU 273; 349 / 2002 Coll.), where it stated that "the independence of the judge as well as the independence of the court [...] is related and in relation to cross-compliance, including the impartiality of the judge and the court. Independence and impartiality are inherent attributes of the concept of court. Its impartiality and independence is a value that benefits everyone, as it is one of the guarantees of equality and legal certainty in democratic society. Only an impartial court is capable of providing genuine justice to all and all, one of the means of impartiality of the court guaranteeing judicial independence '. In this context, the Constitutional Court pointed out the importance of guarantees of judicial independence (as a precondition for the fulfilment of the constitutional status of judicial power as a specific form of state power), with the purpose of" securing the position of a judge which requires his role in the process of impartial, fair judicial decision-making, in which the judge is bound, according to his promise, only by the rule of law and by his best sense and conscience (naturally still confronting fundamental values clinging to man and justice)'.
42. In the decision of 28.4.2005 sp. zn. when the Constitution refers to the independence of the courts, it means their institutional independence from legislative and executive powers, while in the latter case the Constitution refers to its own decision-making activities of the Court; The principle of independence of the judiciary, according to the Constitutional Court, "contains a number of aspects which, in their totality, are intended to create the preconditions for the courts to fulfil their tasks and duties [...] ', whereas" in order to fulfil the conditions of independence, it is necessary for the Court to be able to base its decisions on its own free opinion on facts and on their legal side without having any obligation to the parties or public authorities [...]'.
43. In addition, the Constitutional Court states that the independence of the courts enshrined in Article 81 The Constitution is one of the fundamental structural principles on which our Constitution is built, because it is, on the one hand, an expression of the division of state power (Article 2 (1) of the Constitution), and, on the other hand, the limits of the fundamental stones of the rule of law, or the required standard of its conduct (Article 1 (1) of the Constitution). Article 82 (1) The Constitution also expressly guarantees the independence of the Judge in the performance of his duties, which the Constitutional Court concluded that the intention of the Constitutional Tribunal was to distinguish between the two terms, the consequences of which are not merely theoretical but are also relevant in the light of the Constitutional Court's actual decision-making practice (see sp. zn. Pl. ÚS 60 / 04). On the other hand, it should be taken into account that the judiciary has its institutional and personnel components, which are inextricably linked in terms of function, and its formation and functioning are subject to certain principles which, depending on the nature of the case, are linked to either the two components or one of them; It is therefore understandable that both terms will often be interchangeable (cf. Sládeček, V. in: Sládek, V., Mikule, V., Suchanek, R., Syllova, J. Constitution of the Czech Republic. Comment. Issue 2. Praha: C. H. Beck, 2016, p. 664 et seq.).
44. Legal theory in judicial independence, where appropriate, distinguishes between the independence of political, i.e. independence from state power, social, i.e. "non-state 'power (political parties, churches, various organisations and associations, press or other media, etc.) and - from the point of view of the matter now being considered significant - the independence of procedure, i.e. the parties to a specific trial. As a general rule, Articles 81 and 82 (1) The Constitution imposes the power of legislature and executive abstain from anything that, whether directly or indirectly, would affect the decision-making of the court or the judge, at the same time as it is an order from the legislator to take such measures as would ensure the most effective protection and development of judicial (judicial) independence. Those provisions do not only affect the conduct of state power, but also the" non-state "power or individuals (cf. Article 82 (1) in fine" impartiality [of the judges] "), which implies that the Constitution targets all components of judicial independence, and thus the addressees of the relevant standard are private persons.
45. The issue of procedural independence is essential in the case under examination; its manifestation is the requirement of the neutrality of the judge vis-à-vis the parties (participants), which is considered to be a fundamental precondition for finding the law in the legal state, or even an integral part of that finding; directed both towards the legislator, in order to lay down rules governing the exclusion or refusal of the judge and against the judge himself, specifically to refrain from anything that might trigger his bias and jeopardise his independent right-finding.
46. Legal theories also generally divide the independence of the judge into so-called factual and personal. The first guarantee of Article 82 (1) in conjunction with Article 95 (1) of the Constitution. The fact that a judge is bound solely by law in its formal and material form when deciding, meaning that he cannot be bound by any formal or informal instructions in the course of his judicial activity; independence in this sense is primarily meant to be independent of executive power, which is not allowed to influence the judge when finding the law by means of individual instructions, administrative provisions and other similar ways, and also to the legislature who is forbidden to directly influence the decision of a particular case in the current proceedings, in addition to the requirement of independence by the judge in relation to the judicial authority itself, which must not restrict the judge from taking a decision in his own legal opinion. This heading includes the independence of the judge from various social and private influences. The so-called personal independence of the judge is a necessary complement to the independence of the judge in a material way and its purpose is to protect the judge against possible penalties for "unpopular 'decisions; Article 82 (2), in conjunction with Article 93 (1) of the Constitution (enshrined in the principle of irrevocability and" non-transferability'), is guaranteed. In order to ensure the physical and personal independence of the judge, there is a whole system of guarantees both in constitutional and legal terms (for example Sládeček, V. in: Sládeček, V., Mikule, V., Suchanek, R., Syllova, J., quoted work, p. 865 et seq., Šimělek, V. in: Bahluľová, L. et al. Constitution of the Czech Republic. Comment. Praha: Linde Praha, 2010, p. 963 et seq.).
47. Whereas Article 81 The Constitution provides for the institutional guarantee of the proper functioning of judicial power, and Article 82 of the Constitution provides for the obligation of the rule of law to guarantee respect for the independence of judges in the performance of their duties, the provisions of Article 36 (1) of the Charter (or Article 6 (1) of the Convention, Article 18 (2) of the Charter), in which the independence and impartiality of the Court (the Tribunal) are also discussed, is the nature of the right of the "everyone '(any natural or legal person) to make specific decisions in its legal matters of independence and impartiality. These provisions cannot therefore be relied upon by the judge (such as the person exercising the jurisdiction) who decides the case; However, this does not mean, of course, that the appellant cannot argue with them as he does in the case under trial.
48. As is apparent from the above, the rules of constitutional law, in addition to the term "independence ', also use the term" impartiality', which means "internal independence 'of the judge himself, i.e. his subjective position as a non-party (neutral)" third', which stands above the parties (participants). As such, it has a duty to issue its court in substance, irrespective of the persons of the parties to the proceedings and to the best of its knowledge and conscience [cf. the finding of the Constitutional Court of 31.8.2004 sp. zn. I. ÚS 371 / 04 (N 121 / 34 SbNU 255); See also Šiměl, V. in: Bahěľová, L. and the wheels, cited work, p. 982, according to which the impartiality of the judge is a subjective category, expressing "the judge's inner psychological relationship to the matter in the wider sense [...], which is mainly a matter of responsibility and conscience of the judge himself '. Similarly, under" internal "(unlike" external "independence as a form of exoneration, the judge from external any undesirable political, group, economic and other influences) is understood by independence and requires independence from the judicial hierarchy. Thus, the judicial officer may not impose any guidance on the method of decision on a particular case; The Court of First and Second Instance - although the Court of Appeal may impose on the court finding the evidence to be carried out but may not impose on it how it is to assess it and how it is to decide [see, for example, Section 264 (1) of Act No. 141 / 1961 Coll., on criminal proceedings of the Court (Criminal Code) and its interpretation in Draštík, A., Fenyk, J. et al. The Code of Criminal Procedure. Comment. Episode II. Praha: Wolters Kluwer, 2017, p. 441].
49. There is a functional relationship between the "independence 'and" impartiality' understood separately, where the independence of the judge is a prerequisite for its impartiality (cf. the European Commission's Human Rights Report of 12.12.1983 in the Bramelie and Malström case against Sweden, No B 8588, 8589 / 79, paragraph 33). It may be noted that, when speaking in the second sentence of Article 82 (1) of the Second Constitution on "impartiality ', this certainly means independence in the aforementioned sense, i.e. as a means of achieving the desired situation, i.e. an impartial approach of the judge when discussing and deciding the case, i.e. that he will not favour or disadvantage any of the parties (cf. Sláček, V. and others, literature from above, p. 643, paragraph 11).
50. The impartiality may have two positions - personnel and functional; First mentioned relates to the private sphere of the judge, second to the performance of his function (cf. Pospíšil, I. in: Wagner, E., Šiměl, V., Langášek, T., Pospíšil, I. and kol. Charter of Fundamental Rights and Freedoms. Comment. Praha: Wolters Kluwer ČR, a. s., 2012, p. 740). The impartiality of the judicial function is guaranteed by constitutional order and legally ensured by the institution of the exclusion of a judge, which takes place on the basis of an objection of bias or at the initiative of the judge himself (iudex suspectus), in addition, the law defines specific situations in which a judge is excluded from the hearing and decision of the case "directly 'because his bias is assumed to be there (iudex inhabilis) or, on the contrary, where he cannot be regarded as excluded. In this context, it is possible to talk about ad hoc bias and systemic bias. Paragraph 36 (2) of Act No 182 / 1993 Coll., on the Constitutional Court according to which a judge of that court is excluded if he was active in the same case in the exercise of another function or profession, the negative definition then contains Article 36 (3) of Law No 182 / 1993 Coll., on the Constitutional Court, according to which the participation of a judge in the preparation, negotiation and approval of legislation is not a reason for its exclusion.
51. As a general rule, the reason for the exclusion of the former is that the judge was in some form previously active in the present case (cf. paragraphs 14 (2) and (3)), § 8 (1) of Act No. 150 / 2002 Coll., the administrative system and, in particular, paragraphs 30 (2) and (4) of the Criminal Code), the procedural procedure itself (without further action) in the present case or its decisions in other matters cannot be excluded from the judicial procedure (cf. section 14 (4) of the Rules of Procedure, § 8 (1) of the Administrative Code). The reason is clear, whereas in the cases referred to above, the judge's apparent internal relationship to the case may consist of influencing the knowledge he has acquired outside the relevant process and, above all, the possible tendency to "defend" his previous decisions, such as bad decisions or previous procedures and actions; Such an immediate link is lacking when the judge has participated in the hearing and decision-making of others. A negative definition can be compared - under certain circumstances - to a situation where the law is "silent in that regard," since in such a case it is considered that such a judge is not biased [see resolution of the extended Senate of the Supreme Administrative Court of 20 November 2012 No 1 As 89 / 2010-119 (ECR 2802 / 2013)].
52. However, that presumption may prove incorrect, and the relevant legal regulation may therefore be contrary to the constitutional principle of impartiality. First of all, it is necessary to mention the finding of 31 August 2004, sp. zn. I. ÚS 371 / 04 (N 121 / 34 SbNU 255), in which the Constitutional Court pointed out that the relationship between the bankruptcy judge and the bankruptcy administrator is not a neutral relationship, but a relationship between a functional relationship (and to a certain extent of cooperation), and that if such a judge were to decide an incident in which the insolvency administrator would be involved, it would be possible to assume its "party '. It must be added, however, that the concept of a single insolvency procedure has been enforced in the new legislation, according to which all disputes should be decided by the same judge of the insolvency court (see Has, J. et al. Comment. Issue 2. Praha: C. H. Beck, 2014, p. 559, paragraph 1).
53. The ECHR concluded that the requirement of impartiality was not in line with the fact that the criminal judge in the main trial should assume the role of the absent prosecutor in the so-called evidence proceedings (see Case No 64962 / 01 Ozerov v Russia [2010] ECR 53 and 54). In addition, there are a number of ECHR decisions according to which a judge may be considered prejudiced, who participated in or was active in the previous decision-making process (e.g. Kmec, J., Košák, D., Kratočíl, J., Bobek, M. European Convention on Human Rights). Comment. Issue 1. Praha: C. H. Beck, 2012, p. 676 et seq.). It is also possible to recall the established practice of the ESLP, which applies both a subjective and an objective point of view in its decision on the question of (not) the discretion of the judge; in the case of the Court of First Instance (see Case No 8692 / 79 Piersack v Belgium, Case No 8692 / 79), as well as the legislation on the issue in paragraphs 14 (2) to (4) of the Civil Code, paragraphs 30 (2) to (4) of the Code of Criminal Procedure or, more generally, Articles 75, 79, 85, 89 and 118 of Act No 6 / 2002 Coll., on the Judgments, Judgments, Adversaries and Government of the Court of Justice and on the amendment of certain other laws (Law on Judgments and Judgments), as amended.
54. The conclusions of the Supreme Administrative Court contained in Resolution No 1 As 89 / 2010-119 may also be mentioned, even if this was not given in the matter of the bias of judges but of officials, on the ground that the relationship between a certain dependency of an official (on a party to the proceedings) and its possible (systemic) bias is addressed. According to that court, "if the authority of a local authority in administrative proceedings concerning the interest of that local authority, it is the cause of doubt as to the unbiased nature of an official in accordance with Article 14 (1) of Act No 500 / 2004 Coll., the administrative order, its employment relationship with the local authority if, by the nature of the case or other circumstances, it is apparent that its position on the matter could be affected by other than the legal aspects'.
Self-examination of the contested provisions
55. On the basis of the foregoing, the Constitutional Court first examined whether the contested legislation is not contrary to the principle of the independence of the Court of First Instance or of the Court of Justice when the appellant leads his objections in an objective manner, that is to say that he does not feel himself biased or "biased ', but the contested legislation clearly finds it to be systemically defective, namely one which generates errors independently of the procedure of the insolvency court in a particular case. In this context, and in view of its argument, it can be ruled out that this could be a case of dependence of political or social nature. Thus, the possibility of so-called procedural dependence of the judge on one of the participants in the insolvency proceedings, namely on the creditors or creditors. In this regard, however, the Constitutional Court did not find that this could be the case. In the performance of his duties in insolvency proceedings, the insolvency judge shall be required to follow only the law setting out the criteria for his procedure, not the instructions of one of the parties or of the procedural bodies, including creditors, even in the exercise of the powers of the creditor committee. Similarly, it was not possible to conclude that the insolvency court became, as a result of this exercise, in any way dependent on creditors on a factual, e.g. material, aspect.
56. The appellant, referring to the provisions of Paragraph 58 (1) of the Insolvency Act, submits that the obligation of the Insolvency Court, where it exercises the powers of the creditor committee, is to defend the interests of creditors and is bound by the obligation of loyalty to them; Therefore, in the exercise of that competence, it ceases to be a court and becomes a de jure body of creditors. However, the Constitutional Court could not attest to that view because (see also sub-sub-63) the provisions governing the activities of the creditor committee must be interpreted as meaning that only those standards are applicable which do not conflict with the position of the court as a body of the State and with the performance of its tasks defined by law (the procedure within the limits of Article 2 (2) of the Charter), while the autonomy of the creditors' conduct is, on the contrary, based on Article 2 (3) of the Charter in conjunction with Article 11 (1) of the Charter. The insolvency court may thus defend the common interest of creditors as long as, in accordance with the purpose of the insolvency proceedings under § 1 (a) of the insolvency law, the interests of other parties (including the protection of the law of the protected interests of the debtor) and the task of the State to ensure in insolvency proceedings the protection of all those interests under § 5 (a) of the insolvency law. Similarly, the insolvency judge is not (personally) liable to creditors for the damage caused, in which case the State is responsible.
57. Therefore, where the appellant alleges a breach of the principle of equality of parties (Article 37 (3) of the Charter), this claim could not be attributed. According to the constant case law of the Constitutional Court, it is always the duty of public authorities to give priority to those whose use results in a constitutional conformity result (see, for example, the Constitutional Court finding of 22.10.1996 sp. zn. III. ÚS 277 / 96 (N 109 / 6 SbNU 285); Likewise, the Constitutional Court prefers such an interpretation of the law to its derogations - see for example the finding of 26.3.1996 sp. zn. ÚS 48 / 95 (N 21 / 5 CollNU 171; 121 / 1996 Coll.)]. It is the task of the general court, as the appellant, to demonstrate that the contested law (its individual provision) is contrary to the constitutional order, it cannot be avoided in the proceedings before it, and only its annulment will result in the achievement of the desired constitutional conformity result [finding of 28 January 2014 sp. zn. Here, it cannot be overlooked that the interpretation of the appellant would lead to absurd situations as described in the proposal itself (for example, that the court will act once in the court's role and once in the role of the creditor's committee, or that it may result in a different outcome when approving an action). It is not even clear how this view would be combined with the obligation of the insolvency court to indicate its actions in this position under Paragraph 66 (3) InsZ, when it must make clear to the parties (regardless of the form of the action) that the creditors' committee has not been set up in the present proceedings. The adoption of such an interpretation would be in clear conflict with the concept of the so-called rational legislator.
58. If an infringement of the principle is inferred by the appellant on the basis of the "lateness' of the judge (court) arising as a result of the exercise of the powers of the creditor committee, the Constitutional Court focused on the key question of whether the performance of the activity in question does not constitute such a relationship between the judge and the parties to the proceedings, possibly on the substance of which there would be legitimate doubts as to its impartiality. In the first place, the relevant circumstances could be that the bankruptcy judge" supersedes "the activity of one of the parties to the proceedings, or that he participated in the previous decision-making process, or could be a situation where he and the creditors have a relationship of functional interdependence or even cooperation.
59. First of all, it should be taken into account that insolvency proceedings are a specific type of civil procedure where the general rules on legal proceedings apply only mutatis mutandis and in support, unless the insolvency law provides otherwise, or where such a procedure does not conflict with the principles underlying insolvency proceedings (§ 7 InsZ). In this procedure, the State (the judicial authority) carries out different functions than in the contested procedure under the rules of the Civil Code or, if this is not possible, under the rules of Act No. 292 / 2013 Coll., on special court proceedings, as amended. It can be recalled an evaluation in procedural theory (see Zoulik, F. Contest in judicial practice. Prague: C. H. Beck, p. 1 et seq.), according to which insolvency proceedings cannot be seen as a dispute over the existence of bankruptcy, while some connection with the contested proceedings is that the existence and amount of claims are dealt with authoritatively within its framework; with the undisputed procedure has a common number of participants and efforts to organise the relationships between them and the execution that they involve direct coercion (similarly now Winter, A., Mack, A. and the civil law process. Part II. Praha: Leges, 2015, p. 203-204). These specific features of insolvency proceedings should be taken into account, even if the provisions of Paragraph 7 InsZ as a primary provision provide for the subsidiary application of the provisions of the civil procedure rules relating to the contested proceedings and as a secondary application of the relevant provisions of the Law on special legal proceedings. In addition, the insolvency proceedings at the stage of the debtor's (imminent) bankruptcy certificate are expressly referred to as the contested procedure, but, at the same time as referring to § 86 of the insolvency law, the court's case law concerning the provisions of § 120 (2) o. s., (apparently) as amended by 31.12.2013, recalls the enforcement of the so-called principle of inquiry (see Hásova, J. et al., cited, p. 277- 278, paragraphs 1 to 3).
60. It is therefore specific to the activities of the Court in insolvency proceedings, since, under Section 10 of the Insolvency Act, not only consists in decisions [Section 10 (a) of the Insolvency Act], but also in the supervision of the procedure and activities of other procedural bodies, including decisions on matters related [Section 10 (b) of the Insolvency Act]. Therefore, from the point of view of the theory of division of power, it is not only those who perform a function or activity (subjective point of view) but also (material, formal and legal point of view) what is its content (general or individual rule), the form (law, resolution, measure, judgment, finding, order) and what legal characteristics (binding, efficiency, legal power, constitutional or declaratory nature, etc.). Therefore, not every statement of the activities of Parliament's chambers is a law (jurisdiction of organisational, creative, control, etc.), a power of executive administrative action, as well as the activities of the court by an act of judicial or judicial power within the meaning of Articles 2 (1) and 90 of the Constitution, or Article 36 (1) and (2) of the Charter. Distortion of this in the Constitution of the envisaged principle of organisation and activity of public authority in the Czech Republic could arise if the legislator entrusted key executors of individual powers or functions with tasks that undermine their proper functioning as legislative, executive and judicial bodies, or overburden them by dealing with other legal matters (§ 7 (3)), which are not at the heart of their activities. Therefore, in order to be able to attest to the appellants' objections, it would have to be demonstrated that the monitoring activities provided for in Section 10 (a) are also carried out. (b) the Insolvency Act is a "trial" in the narrow sense of the word (in particular by providing protection of rights in disputes and decisions on guilt and punishment, i.e. "judgment" and "condemnation"), not by any other court entrusted with a legal action in the form of a decision on another legal issue which would at the same time undermine the functioning of other branches of State authority, or in the exercise of which it would, moreover, cease to be a court bound by the principles of Article 2 (2) and Article 36 (1) of the Charter or Articles 81, 82 and 95 of the Constitution.
61. The so-called monitoring activity is specified in Section 11 of the Insolvency Act as decisions on matters relating to the conduct of insolvency proceedings, the implementation of the measures necessary to ensure its purpose and the imposition of obligations relating to the activities of individual bodies. As is apparent from Paragraph 66 (3) of the InsZ, the supervisory activities also fall within the scope of the supervision activities of the insolvency court in the exercise of the powers of the creditors' committee, in the form of a resolution pursuant to § 7 InsZ, with the appropriate application of § 167 o. s. s., against which an appeal is not admissible under § 91 of the Insolvency Act (see Hásova, J. et al., cited piece, p. 230, paragraph 3).
62. Furthermore, the purpose of the existence of the creditor committee and its position and competence in insolvency proceedings should be taken into account. According to Article 58 (1) of the Insolvency Act, the creditor's common interest should be considered to be superior to their individual interests [see Section 2 (j) of the Insolvency Act] in order to fulfil the purpose of the insolvency proceedings defined by the law; This is the organisation of legal arrangements and within this framework the achievement of the rapid, economical and maximum (proportional) satisfaction of (all) creditors [§ 1 (a) and § 5 (a) of the insolvency law]. Therefore, from a legal point of view, the creditors' committee cannot in principle be identified with the creditor as a participant in insolvency proceedings (Section 14 (1) of the insolvency law), which underlines the fact that members of the creditors' committee in the performance of their duties are obliged to give priority to the common interest of creditors over their own interests and over the interests of other persons (Section 60 (1) of the insolvency law).
63. The Trustee shall perform primarily the supervisory function in respect of the Insolvency Trustee (s) or the debtor (s), and to that end shall have the appropriate powers (in particular § 58 (2) (a), (d) to (g), § 300, § 304 (3), § 354 (2), § 355 (1), § 371, § 287 (1) (2), § 288 (2), § 330 (2), § 330a (2), § 271 (2), § 271 (2), § 286 (2), § 287 (2), § 288 (2), § 219 (2), § 227, § 239 (2), § 271 (2), § 271 (2), § 286 (2), § 287 (2), § 287 (2), § 288 (2), § 288 (2), § 288 (2), § 2), § 39 (2), § 2 (2) (2) (2) (2) (2), § 330 (2), § 330a (2), § 330a
64. It follows from the nature of the case that the insolvency court will not (not obliged) use the supervisory powers of the creditor committee where the scope of the authority's authorisation is fully "overlapping 'with its so-called supervision activity, which concerns in particular the insolvency administrator (cf. § 11 (2) of the insolvency law), as well as other procedural bodies (cf. Hásova, J. et al., cited work, p. 67, paragraph 1). The insolvency court will also not exercise the jurisdiction of the creditor committee in a situation where the relevant procedural acts would be taken against itself (in this respect it is clear that it may act ex officio), or in a situation where it is a matter of competence shared with the creditor committee, for example the approval of the creditor committee to settle the joint ventures of spouses approved by the insolvency court (Section 271 (2) of the insolvency law), and also for the approval of the sale of assets outside the auction, to which the insolvency court also grants its approval (§ 289 (1) of the insolvency law).
65. In view of the constitutionality of the draft contested provisions, only a group of cases where the insolvency law does not foresee any direct participation by the insolvency court in the relevant act - see, for example, the granting of the consent of the insolvency administrator or debtor with the available powers to conclude credit financing contracts [§ 58 (2) (c) of the insolvency law]. This will then be the "net 'exercise of the powers of the creditor committee in the insolvency court. Finally, in some cases, it may be questionable whether the insolvency court will actually make use of creditors' competence if it can achieve the same result within its" original 'powers, i.e. in particular in the context of a broad surveillance activity; the creditor committee may, for example, reserve certain acts of major importance, which the debtor with available powers can then carry out only with its consent (Section 355 (2) of the Insolvency Act). However, this is rather a matter of decision-making practice.
66. On the basis of the above-mentioned overview of the powers of the creditors' committee and the insolvency court and their comparison, the Constitutional Court has focused on the nature of the activity which the insolvency court exercises instead of the creditors' committee on the basis of the contested provisions of the insolvency law, first of all from the point of view of whether this does not constitute a relationship between the insolvency court and creditors, which could be described as a relationship of functional dependence or cooperation (see also sub 58), which could in some way influence the judge in his subsequent procedure or decision, namely by the fact that he would tend to discourage creditors at the expense of the debtor as another party to the proceedings, as the appellant argues. However, there is no indication of such a situation, since there is no fundamental change in the creditor-insolvency court's relationship, namely that there would be any expansion or consolidation of contacts or ties between these procedural entities. In the literature, the objection of lack of cognitive nature in the form of lack of competence in deciding on commercial and financial issues or the objection of corruption hazard (see Richter, T. Insolvency law for further details). Issue 2. Praha: Wolters Kluwer, 2017, in particular p. 177) do not apply only to this section of the insolvency court's tasks in insolvency proceedings. The Constitutional Court notes here that it is precisely at this point that the reason for the so-called autonomy of creditors in insolvency proceedings is seen, since this procedure is much more linked to economic decision-making than in the case of an enforcement procedure with one debtor and creditor (notably Lepa, B. Insolvenzordnung und Verfassung. Eine Untersuchung der Verfassungsmäßigkeit der InsO und der Einwirkung verfassungsrechtlicher Wertungen auf die Anwendung dieses Gesetzes. Berlin: Dunckler & Humlot, 2002, p. 214-215).
67. In addition, the Constitutional Court examined whether the insolvency court, by taking over (some) of the functions of the creditor committee, did not "substitute 'the role of one of the parties in such a way that it ceased to be a neutral" third' above the parties, or that the parties and the public concerned would cease to be so perceived, or whether the exercise of the powers of the creditor committee could not be considered (systemically) incompatible with its further involvement in the case (see Sub-60). This assessment plays a crucial role in two aspects - the first is the very nature of the insolvency court's activities as a creditor committee, the second is the nature of its subsequent, potentially affected decision-making (or supervision) activity.
68. The Constitutional Court first addressed the second aspect, namely whether (at all) there is a decision-making or other activity of the insolvency court that could be affected by the previous exercise of the powers of the creditor committee. On the one hand, it can be taken into account that this (subsequent) activity of the Court falls within the stage of insolvency proceedings, which shows the greatest differences from other "ordinary 'legal proceedings, i.e. after the decision on insolvency (Section 136 et seq. of the Insolvency Act), or the way in which it is dealt with, by combining the bankruptcy decision with the decision on bankruptcy (Section 148 of the Insolvency Act), when the debtor's position in the proceedings is also substantially changed, since its" main players' become creditors, or (instead of the debtor) the insolvency administrator, with the extent of the debtor's procedural rights being substantially dependent on the way of insolvency. In particular, in the case of a declaration of bankruptcy, the debtor becomes - figuratively speaking - rather a "subject '[to this and to the importance of the transformation of bilateral relations by the creditor - the debtor into multilateral relationships of the creditor - see Richter, T., quoted work (sub 66), p. 182 et seq.]].
69. On the other hand, despite the above, a conflict between the interests of the debtor and the "common 'interest of the creditors cannot be excluded; In this respect, it is possible to mention, for example, the situation where the insolvency court decides that the debtor is not in bankruptcy (Section 158 of the insolvency law), the cancellation of bankruptcy (Section 308 of the insolvency law), the annulment of the decision approving the restructuring plan (Section 362 of the insolvency law), the conversion of the reorganisation into bankruptcy (Section 363 of the insolvency law), the exemption of the debtor from the payment of debts included in the debt (Section 414 of the insolvency law). In the opinion of the Constitutional Court, despite its specificities, the strict requirement of impartiality of the court or judge (in relation to the debtor-creditor) must also be applied to that section of insolvency proceedings.
70. If this is about the first aspect, namely the very nature of the insolvency court's activities as a creditor committee, the Constitutional Court first focused on the very position of the creditor committee in terms of protecting the "common interest of creditors" [in general theory it is actually an ancient distinction between the concepts of general will (volonté générale) and the will of all (volonté de tous) in the concept of J.J. Rousseau (About the Social Treaty). Prague, 1949, p. 36-37) in the conditions of decision-making of a whole). The creditor committee may not identify with individual creditors as participants in insolvency proceedings and their individual interests. It is the task of the creditor committee to defend the "common interest of creditors' (Paragraph 58 (1) of the Insolvency Act), in a situation where the interests of individual creditors may, or are generally, completely contradictory; This common interest is certainly the satisfaction of their claims, as far as possible and as soon as possible, which is (but also) the purpose and purpose of insolvency proceedings, as expressed in the law, and is subject to the operation of the insolvency court itself. However, the Constitutional Court does not intend to underestimate the link of the creditor committee - creditors, since it is still a body which has a relatively significant role in the insolvency proceedings system and which is on the side of one of the parties whose interests may be contradictory to the interests of the debtor as another party to the proceedings.
71. For this reason, the Constitutional Court focused its attention on the role of the insolvency court as a creditor committee. In so doing, it did not find it possible - from an objective point of view - to attach such importance that the performance of the tasks of the creditor committee could have a relevant effect on its impartiality in its further activities, in particular in relation to the debtor. As is apparent from the above, in the absence of the creditors' committee, the insolvency court will, for the most part, either not carry out its activities at all, or it will be activities that the insolvency court (s) carry out in the course of its supervision activities. The last possibility is that it will be a completely separate activity, but it is, despite the fact that it will be a legal exercise of surveillance activity, close by its factual nature to the broad-based surveillance activity; For example, an equivalent of the already mentioned granting of consent to an insolvency administrator or a debtor with available powers to conclude credit financing contracts [Paragraph 58 (2) (c) of the Insolvency Act] can be found in the provisions of § 227, § 289 (1), § 298 (2) of the Insolvency Act, according to which the Insolvency Court gives its consent to the Insolvency Trustee as well as other acts, of no minor importance.
72. At the same time, the Constitutional Court recalls the specific nature of the insolvency proceedings (sub 59), which consists of a number of different decisions, acts or other activities of the insolvency court. However, such proceedings must be regarded as one whole where, in general, the previous performance of that activity does not constitute a judge (systemically) biased in relation to his subsequent activity (at the subsequent stage). While there may be an exception to this rule, as the Constitutional Court has inferred in the case of so-called incident disputes in the case sp. zn. I. ÚS 371 / 04 (see above), the further division of insolvency proceedings into different stages, or even acts and activities in which another judge would always decide, would in practice hardly be feasible. This is therefore a completely different situation than if, for example, the criminal judge had ruled on detention first and later on, since these are two relatively separate procedures. In this respect, therefore, the general rule that the court's prior action in the proceedings of its bias per is not founded.
73. Furthermore, the Constitutional Court considers it important that, in the present case, the contested law required the insolvency court to perform certain tasks which, by their nature, fall entirely within the scope of its normal activities, which it is obliged to add that it is undoubtedly possible to imagine another division of the competences of the insolvency court and the creditors' committee, without giving rise to any fundamental doubts about its constitutional conformity, or even without calling it "work for creditors," as the appellant has stated. In other words, the Constitutional Court could not conclude that (so) the insolvency court would be obliged in the same proceedings to take on the role that its participants can play in the process entirely (such as the position of the defendant in the design and execution of the evidence) and that it could therefore be considered "impartial '.
74. If the appellant then pointed out that the Court of First Instance must not, by its reasoning, let alone by representing a party to the proceedings, fill in a gap in the claims or evidence of one of the parties in order not to undermine the material equality of the parties, the Constitutional Court considers that this argument is not appropriate, since the activity of the insolvency court in question does not consist in the completion of such a "gap 'in (even if it is part of) proceedings (e.g. the abolition of bankruptcy under Section 308 of the Insolvency Act), but in the execution of an act or conduct of an activity, notwithstanding the fact that such a prohibition may, however, in so far as the insolvency proceedings, there may be a minimum doubt in that respect of its already mentioned specificity.
75. From the point of view of constitutionality, this is not the case for the appellant that the insolvency court, because of the lack of interest of creditors, exercises the jurisdiction of the creditor committee in most cases of insolvency (particularly in the case of dedebits) and that it is likely that there is an excessive burden on insolvency judges. In the theory of insolvency law, following the model of the theory of rational choice (so-called rational apath) in this respect, the individual or general rational apathy of creditors (see Richter, T., quoted work, in particular p. 102-111, 174), and it should be stressed that this is not only a general problem (see the conclusions of the United Nations International Trade Law Commission UNCITRAL in: Legislative Guide on Insolvency Law. United Nations, New York 2005, p. 193 et seq. - available at http: / / www.uncitral.org / pdf / english / texts / insolven / 05- 80722 _ Ebook.pdf), but also about the problem of historically permanent (this condition already states the password "Competition" in: General dictionary legal. Organizes and publishes Veselý, F. X. This could be the case if this would result in a complete and insoluble paralysis of the insolvency judiciary, but especially in the case of the paralysis of the judiciary at all (see sub-sub-60 for the division of power); However, there is nothing like this in the proposal, not to mention that it would give rise to possible interference by the legislator from the point of view of the state's economic policy. The law gives creditors first the right to make such an institution a choice (state prefers private initiative) and sets clear rules for this. It follows that, in the absence of this disposition in their own interest, creditors must be aware that otherwise the State will be left with no part of the tasks and authority of the creditor committee to pass on to the insolvency court or to anyone else (which is not our case). In addition, compared with the previous adjustments in § 58 (3) of the Insolvency Act, it also provides for the possibility to designate alternates and in § 58 (4) of the Insolvency Act even to be represented at its own risk by any other natural person. So, in this respect, the legislator did everything within the limits of constitutional order, without compromising the functioning of the judiciary, or extending the so-called management justice.
76. The same applies to the appellant's complaint that he did not deal with the situation by other means, because it is not up to the Constitutional Court to determine what measures he has to take to achieve the objective, i.e. the smooth conduct of insolvency proceedings, even though he would have doubts as to whether the current solution is an "ideal 'solution, given that the judge is even more placed in a position to make decisions of a nature not only legal but also commercial and financial, to which he does not have the appropriate motivation, education and, as a general rule, even information (attempt at his kind of SWOT to analyse the solution see Richter, T., cited work (sub 66), p. 176-178, which points out of benefits also on the risk of failure of a cognitive nature, or minor immunity to corruption).
77. It is essential for the question to be addressed that, according to Article 2 (3) of the Charter of Nobody (or the creditor), it is not possible to force him to do what the law does not impose on him. The resolution of creditors cannot lead to the State being able, by way of their model, to resign from its function of ensuring the functioning of the market economy and the freedom of business, which is also linked to the legal regulation of insolvency proceedings. Nor could it resign its function of protection of fundamental rights and freedoms, such as property law, freedom of business and other economic activities and the right to judicial protection, even if it is in insolvency proceedings that a number of acts and activities are left to the creditor authorities. Insolvency law is therefore an instrument of public law in this respect in a situation where the modern rule of law prohibits, in principle, the use of self-help (with the exception of legally defined cases), or even of power, and, as the holder of the monopoly, assumes responsibility for the proper resolution of private law disputes. This also applies to the resolution of disputes between the debtor and his various creditors and interested creditors as required by his task under Articles 1 (a) and 5 of the Insolvency Act (also based on the State's protection function under Articles 11 (1) and 26 (1) of the Charter).
78. The chosen solution is therefore a response to the situation that exists on this section. It concerns only a very narrow section of the issue of the constitutionality of insolvency proceedings (see in detail Lepa, B. Insolvenzordnung und Verfassung (see sub-66); Richter, T., cited work, p. 208-216) from the point of view of protecting objective constitutional law. This state may not appear to be ideal based on the centuries-old experience of the chosen solution; However, the appellant failed to demonstrate its unconstitutionality as it is not contrary to the above-mentioned constitutional courts or to the constitutional task of the State to ensure the functioning of the market economy. Here is no point in reminding one of the most frequently quoted statements of the cosmos and President Eastern Air Lines F. Borman on this topic for Time magazine: "I keep saying that capitalism without insolvency is like Christianity without hell. But it's hard to see any good news." ("I've long said that capitalism without bankruptcy is like Christianity without Hell. But it's hard to see any good news in this.") This is also provided by the State by conferring supervision (Paragraph 11 of the Insolvency Act) of insolvency proceedings on the authorities of the State, thus the competent insolvency court, which is thus not the representative of one of the "private 'parties to the insolvency proceedings, but rather the guardian of the public interest (and the obligation of the State) in order to protect the fundamental rights arising in particular from Articles 11 (1), 26 (1) and 36 (1) of the Charter.
79. This solution is not unusual, as demonstrated by the regulation of insolvency proceedings in neighbouring countries (Austria, Slovakia, Poland, where the replacement of the creditor committee is regulated by court by analogy), or in other countries where the concept of "the autonomy of the will of creditors" is the basic starting point, which, among other things, is reflected in their free decision to elect such a creditor body or to be a voluntary member of it (as in the Czech Republic). However, as a result of the recognition of this principle, it is often precisely the situation that our legislator has tried to face through the contested provisions of the insolvency law (see also Section 56 (3) InsZ). However, the task of the Constitutional Court in this proceeding was merely to assess whether this solution did not interfere with the independence and impartiality of the judicial decision-making, or whether it did not weaken the ownership rights of creditors, and whether the State was able to fulfil its role in overseeing the rules on free enterprise and other economic activities, or whether the exercise of the right under the right of ownership was protected, so that the State-controlled administration of creditors (Lepa, B., quoted work, p. 24) is not to be seen as, for example, the possibility of limiting the rights of the debtor under Paragraph 332 of the Insolvency Act.
Conclusion
80. In the light of the above, the Constitutional Court concluded that there were no grounds for the annulment of the contested provisions of the insolvency law and therefore rejected the proposal under Paragraph 70 (2) of Act No 182 / 1993 Coll., on the Constitutional Court.
President of the Constitutional Court:
v. JUDr. Tomková v. r.
Vice-President
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Regulation Information
| Citation | The Constitutional Court found no 283 / 2017 Coll., on the application for annulment of § 61 paragraph 2 of the first sentence and § 66 of Act No. 182 / 2006 Coll., on the bankruptcy and methods of its resolution (insolvency law), as amended by Act No. 294 / 2013 Coll. |
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| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 04.09.2017 |
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| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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