Courts shall be entitled to dismiss the decisions of NCFM

The Constitutional Court has declared unconstitutional the provisions that used to prevent the dismissal of the National Commission of Financial Market (NCFM) decisions until the final resolution of a case. With the entry into force of this Constitutional Court decision, any NCFM decision can be dismissed in administrative court at the request of a person concerned.

The National Agency for Energy Regulation (ANRE) has been the first to suffer from the Constitutional Court decision. For a while, for the purpose of avoiding the administrative dismissal of ANRE decisions, the regulatory authorities of the energy sector lobbied for amending the article in question – Article 21 (3) of the Administrative Litigation Law. At the meeting of January 16th 2013, the Government intended to endorse a positive opinion in regards to the proposed amendments; the recent Constitutional Court decision seems yet to have caused the exclusion of the amendments to Article 21 (3) of the Administrative Litigation Law from the Government agenda and the refusal, or at least the postponement, of taking up a positive opinion on these.

ANRE’s lobbying reveals the indirect incentive to declare Article 21 (3) of the Administrative Litigation Law unconstitutional. Since its adoption in 2000, the Administrative Litigation Law provides for the possibility of dismissing any act issued by a public authority. The 2007 amendments to the law exempted NCFM decisions from such a possibility; it is likely that Article 21 (3) was appealed then at the Constitutional Court since the exception referred only to NCFM decisions. In 2010, new amendments came into force, based on which also the Court of Accounts decisions could not be suspended. Today, ANRE proposes an amendment for a similar exception. If the ANRE proposal were approved, other authorities would most likely take on the same path, attempting to exempt their decisions from the possibility of dismissal.

From this point of view, the Constitutional Court’s decision is significant not (at least not just) because it provides the right to request the dismissal of NCFM and Court of Accounts decisions. Regardless of any provided arguments, having no possibility to dismiss decisions issued by public authorities is a limitation of rights. The merit of the Constitutional Court ruling is that it would block potential initiatives of public authorities to lobby for amendments to the Administrative Litigation Law and remove the possibility of having their decisions suspended.


The matter of primary interest to us is whether the Constitutional Court decision would impact the capital market, the transactions of financial instruments and the market participants’ interests. Potential consequences of the Constitutional Court decision may be inferred from the case made by NCFM in high court, arguing the following:

“Most decisions (issued by NCFM) are not translative, but constitutive of rights; some of them are operative intervention measures for countering illegal activities specific to the financial market. Thus, restrictions (decisions or measures) are applied in a manner proportionate to the Commission’s objectives while respecting the legislation” (quoted in par. 37 of the Constitutional Court Decision).

The above implies that not allowing the suspension of NCFM decisions permits: “countering illicit activities specific to the financial market (fictitious or manipulative transactions), blocking certain listings into the Register of Security Holders to prevent the alienation of securities by third persons that invoke the status of bona fide purchasers.” In other words, declaring unconstitutional the rules that restrict suspending NCFM decisions would lead to limitations or inefficiencies in “countering illicit activities specific to the financial market […].”

If reasoning were to be correct, it would have a few obvious drawbacks. First of all, NCFM decisions cover an extended range of cases, not limited to the ones listed above (par. 37 of the Constitutional Court Decision). As a result, Article 23. (5) should have sought an exception to the dismissals only of decisions related to the above listed cases rather than to all NCFM decisions. This aspect has been noted by the Constitutional Court. Not incidentally, the above quote contains “most decisions” and “some of them”. Moreover, the appellants pointed to the fact that National Bank decisions cannot be dismissed in Administrative Litigation Courts as previously recognised by the Constitutional Court; however National Bank decisions are exempt from suspension to the extent that they relate to withdrawing banking licenses and not in all cases.

Second, even in the cases invoked by the NCFM (par. 37 of the Constitutional Court Decision), the dismissing its decisions does not necessarily affect the authority’s law enforcement objective and does not necessarily lead to irreversible consequences.

Third, if the dismissal of NCFM decisions were unreasonable as to “preventing the alienation of securities by third persons that invoke the status of bona fide purchasers”, then all similar cases, regardless of the asset or right in question, should receive the same treatment. This means that Article 23 (3) would have to exempt from suspension all authorities’ decisions that assure “preventing the alienation of securities by third persons that invoke the status of bona fide purchasers.”

The above have no intention to indicate that the Constitutional Court has not received conclusive arguments, proving the constitutionality of Article 21 (3) of the Administrative Litigation Law. The intention is to show that there are no such arguments, whether we refer to the decisions of NCFM, of the Court of Accounts, of ANRE or of any other public authority. From a constitutional point, the exemption only of certain decisions referring to special cases and circumstances can be motivated and justified. Exempting all decisions issued by a public authority from being dismissed in administrative proceedings can not be justified. That is, specifically the extensive nature of the rules of Article 21 (3), via which all NCFM decisions are exempt, have led to declaring them unconstitutional.


Declaring Article 21 (3) of the Administrative Litigation Law unconstitutional is thus a measure that guarantees free access to justice within the meaning of Articles 20 (1)-(2), 26 (1) and 53 (1). In the same time, the Constitutional Court decision should not be viewed as an interdiction to exempt any NCFM decision (if the Law allows for the respective exception).

On the contrary, the high court recognises that decisions of public authorities can be exempt from administrative dismissal. This is proven by prior decisions of the Constitutional Court that have recognised as constitutional the Law of Financial Institutions rules that exempt from dismissal the National Bank decisions referring to the withdrawal of the licenses of commercial banks. The Constitutional Court had motivated its position via Article 54 (2) of the Constitution, noting that such exceptions may receive consent if they “pursue a legitimate objective, are essential in a democratic society and are proportionate to the pursued goals (pt. 94 of the Constitutional Court Decision nr. 24 from 15 November 2011).

It can be inferred that, from the Court’s point of view, the liquidation of a commercial bank and the consequences of this process correspond to the above quoted criteria. “The Constitutional Court argues that the liquidation of a bank aims to compensate promptly and certainly the creditors and to avoid possible repercussions of the bank’s payment difficulties on the entire banking system.” This is the reason why exempting from dismissal the National Bank decisions related to withdrawing bank licenses has been recognised as constitutional.


This brings us to a rather curious situation. The Constitutional Court’s point quoted above is applicable to other situations on the capital market and, namely to withdrawing the licenses of market operators that (similar to banks) collect funds from investors (in the case of banks – depositors). In this context, we refer to issuers making public offers, as well as to fiduciary managers, brokers and collective investment schemes that attract funds to be invested in financial instruments. Applying the above stated by the Constitutional Court, it would be fair to claim that “liquidating a collective investment scheme has the role of reimbursing promptly and surely its creditors, as well as avoiding the potential repercussions of the scheme’s payment inability on the entire financial system of the country.”

As a result, based on the arguments of the Constitutional Court, the NCFM decisions regarding the withdrawal of the financial market operators’ licenses should be exempt from dismissal in administrative litigation courts. Such an exception would be indispensable as well as constitutional. It is understandable that the Constitutional Court could not alter the content of Article 21 (3) from the Administrative Litigation Law, replacing the phrase “all NCFM decisions” with “all NCFM decisions related to public offers and liquidation of financial market operators.” However a subsequent amendment in this regard is required whether it would be included in the Administrative Litigation Law, in the current or the new Law of NCFM.

Some might claim that such amendments would be unnecessary provided that, in the Republic of Moldova, there are no public offerings, no collective investment enterprises and the practice of allocating funds to be administered by financial market operators is not common. I agree. However, all of the enumerated are permitted by law and can commence at any point in time. With this in mind, NCFM, in its role of the authority regulating and supervising the financial market, must have in place the tools for “reimbursing promptly and surely the creditors, as well as for preventing potential repercussions to the entire financial system arising from the payment incapacity/liquidity issues of the enterprises in question.”

One thing to add is that the author of the proposal to declare unconstitutional the provisions of Article 21 (3) did not call for – and the high court did not decide in the favour of – the unconstitutionality of Article 23 of the Law on NCFM. The final part of this article provides for rules similar to those in Article 21 (3) of the Administrative Litigation Law; per Article 23 of the NCFM Law, disputing NCFM decisions in court does not suspend their execution. That is, we are at a point when a provision declared unconstitutional within one law remains valid and constitutional within another law. It is difficult to believe that all parties would agree unanimously that the respective rules of Article 23 of the Law on NCFM are void under the recent ruling of the Constitutional Court. These are additional indications that further amendments are imminent.

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