Judicial statistical data show that in courts of common jurisdiction, also in the Department of Civil Cases of the Senate of the Supreme Court, there arises number of disputes concerning issue of writs of execution upon judgements of court of arbitration. The Division of Case-law in co-operation with the Department of Civil Cases of the Senate has analysed court practice in cases on issue of writs of execution for forced execution of judgements of the court of arbitration.

In the collection there have been analysed rulings of the Department of Civil Cases of the Senate in cases that had been reviewed in process of cassation according to Paragraph 485 of Civil Procedure Law, it is, upon protests submitted by Chief Justice of the Supreme Court, the Chair of the Department of Civil Cases of the Senate or Public Prosecutor. From the beginning of 2006 until July 2008 the Senate has reviewed 36 such cases.

In some rulings the Senate stated procedural breeches in acceptance of applications on forced execution of judgement of the constant court of arbitration – not all documents were attached to the application. The Senate turns attention to the fact that application to district (city) court on issue of writ of execution for forced execution of the judgement of the court of arbitration must be submitted to the court at the place of living or place of residence of debtor.

The Senate cancelled such judgements of the court, in rendering of which the court breached Part 2 of Paragraph 528 of Civil Procedure Law, in which there has been stated that judgement of the court of arbitration that has come into force becomes ultimate, it may not be appealed and must be executed. If the debtor partially, of his own free will, has executed the ruling and debt-collector asks to issue writ of execution for amount unpaid, then judge has rights to issue writ of execution on execution of ruling of the court of arbitration in this part.

In the summarization of the court practice there has been made accent upon protection of interests of third parties, who are not participants of arbitral contract, in disputes concerning real property in arbitral processes. In practice of courts of arbitration there are cases, when two persons make a deal, in which as a result of default of reponsibilities taken, there can arise dispute on ownership rights. While reviewing such cases, courts of arbitration should take into account, if arbitral process doesn’t touch interests of the third party (mostly, mortgage lender or spouse) and there is necessary to think over question on termination of arbitral process. The court of arbiration must evaluate terms of contracts signed and make decision about possibility to arbitrate, but, if the dispute has been arbitrated with breeches of rights of third parties, then judge should reject an issue of writ of execution.

From cases summarized there is possible to conclude that many disputes are related to breeches of terms of protection of consumer rights. It is necessary to take into account that in cases of such disputes it is necessary to follow not only general legal regulations on demonstration of will and illegaly signed contracts that have been included in Civil Law, but also to follow special legislation that has been included in Law on protection of consumer rights and other legal regulations on on protection of consumer rights. In amendments of Law on protection of consumer rights, accepted in June 19, 2008, it has been stated that judge, while arbitrating a dispute or executing other procedural activities that arise from the contract signed between producer, seller or supplier of service and consumer, evaluates terms of this contract and, in order to arbitrate dispute, the judge doesn’t apply to the consumer wrongful terms included in the contract. It means that judge, while making decision on issue or rejection of issue of writ of execution upon judgement of the court of arbitration and having stated that consumer is the participant of the dispute, it is necessary to evaluate not only touch of rights of consumer regarding clause of the court of arbitration, but also others, possibly wrongful terms of contract. Having stated wrongful terms of contract, there must be appropriate motivation of that in the ruling of the judge. In case if both court of arbitration and judge, while issuing writ of execution, have evaluated compliance of terms of contract to the Law on protection of consumer rights and haven’t stated any breeches of it, there is no reason to think that consumer rights were touched.

Also question of commensurability of penalty in arbitral process has been analysed. The court of arbitration must evaluate terms of the contract signed by parties, so that penalty agreed is commensurable to principle of good faith, stated in Paragraph 1 of Civil Law, taking into account actual circumstances of the case in each concrete case. If, while arbitrating a dispute, it is necessary to apply legislation of Latvia, then it is necessary to follow case-law of general jurisdiction and position of the Senate in this question.

The Senate reviews only those cases, in which court of first instance has satisfied claim upon forced execution of the judgement of the court of arbitration and such judgement of district (city) court, according to Paragraph 535 of Civil Procedure Law came into force immediately and may not be appealed. The Senate doesn’t review those cases, in which claim has been rjected, and ancillary complaint of the claimant has been reviewed in appelate court. Thus, regional court is the final court instance in dealing with questions on execution of judgement of the court of arbitration that have come into force, and rulings of regional court that have come into force, are constituent part of court practice, and that should be taken into account.

 

 

Information prepared by

Head of the Division of Communications of the Supreme Court Rasma Zvejniece

E-mail: rasma.zvejniece@at.gov.lv, telephone: 7020396, 28652211