Published on 19 December 2022
FOURTH SECTION
Application no. 24367/20
ROSGOSSTRAKH-ARMENIA INSURANCE CJSC
against Armenia
lodged on 9 June 2020
communicated on 30 November 2022
STATEMENT OF FACTS
The applicant company, Rosgosstrakh-Armenia Insurance CJSC, is a private insurance company that was set up in 2008 and has its registered office in Yerevan. It is represented before the Court by Mr N. Yuzbashyan, a lawyer practising in Yerevan.
The circumstances of the case
The facts of the case, as submitted by the applicant company, may be summarised as follows.
The applicant company holds a license from the Central Bank to sell insurance.
On 5 December 2018 the applicant company refused a claim submitted by E.C., a private person, to cover damages resulting from the loss of a vehicle caused by fire.
E.C. lodged a claim against the applicant company with the Financial System Mediator, a special body set up under the Financial System Mediator Act with the task of examining claims from private persons against, inter alia, insurance companies.
On 26 February 2019 the Financial System Mediator allowed E.C.’s claim in the amount of 1,800,000 Armenian Drams (AMD) (approximately EUR 3,200 at the relevant time). E.C. accepted this decision which became binding pursuant to Section 14 § 4 of the Financial System Mediator Act.
The applicant company lodged a claim with the Yerevan Court of General Jurisdiction seeking to have the decision of the Financial System Mediator set aside. It essentially argued that it had had the right to refuse payment to E.C.
On 8 July 2019 the Yerevan Court of General Jurisdiction dismissed the applicant company’s claim. According to the relevant decision, the applicant company was listed on the website of the Financial System Mediator among the organisations which had not waived their right to challenge the decisions of the Financial System Mediator by concluding an agreement to that effect. Nevertheless, the court found that no evidence had been submitted by the applicant company to prove the existence of any of the grounds for setting aside a binding decision of the Financial System Mediator, set out in an exhaustive list in the Financial System Mediator Act. The court then stated that it would not examine the submissions on the merits of the substantive dispute since those fell outside the scope of its examination.
The applicant company appealed against that decision.
On 25 October 2019 the Civil Court of Appeal upheld the decision on essentially the same grounds.
The applicant company appealed on points of law.
On 18 December 2019 the applicant company’s appeal on points of law was declared inadmissible by the Court of Cassation for lack of merit.
RELEVANT LEGAL FRAMEWORK AND PRACTICE
Code of Civil Procedure (in force from 9 April 2018)Under Article 337 § 1, parties can challenge before the court the decision of the Financial System Mediator which has become binding on them by submitting an application seeking to have that decision set aside.
Under Article 337 § 2, a decision that has become binding on the parties cannot be challenged by an organisation which has waived its right to challenge the decisions of the Financial System Mediator by concluding an agreement with the office of the Financial System Mediator.
Article 339 § 5 provides that, when examining an application submitted in accordance with Article 337 § 1, the court determines the presence or absence of the grounds for setting aside a decision of the Financial System Mediator set out in the Financial System Mediator Act.
Financial System Mediator Act (as in force at the material time)Under Section 2 § 1 (7), the Financial System Mediator is a physical person who, by exercising his or her duties under the Act, examines and decides on claims submitted by customers (Customers) against organisations licensed by the Central Bank (Organisations).
Under Section 3, the Financial System Mediator examines a claim submitted by a Customer against an Organisation if the claim is related to the services provided by that Organisation and does not exceed AMD 10,000,000 (approximately EUR 18,000 at the relevant time) or an equivalent amount in a foreign currency.
Under Section 4, the Customer has the right to apply to the Financial System Mediator irrespective of whether such a right is stipulated under the agreement concluded between the Customer and the Organisation. Any agreement or clause limiting the Customer’s right to apply to the Financial System Mediator is void.
Under Section 14 § 4, the decision of the Financial System Mediator becomes binding on both parties when the Customer confirms in writing that he agrees with the decision without any reservations within thirty working days after its service.
Under Section 16 § 1, parties may challenge a binding decision of the Financial System Mediator by lodging an application with the competent court in accordance with the Code of Civil Procedure.
Under Section 16 § 3, an Organisation can waive its right to challenge the decisions of the Financial System Mediator by a written agreement concluded with the latter’s office.
Under Section 16 § 4, the Central Bank and the office of the Financial System Mediator publish on their websites the list of Organisations which have not concluded an agreement on the waiver of their right to challenge the decisions of the Financial System Mediator.
Under Section 17, the competent court sets aside a binding decision of the Financial System Mediator if the claim was not subject to examination by the Financial System Mediator, the decision was taken in breach of the procedural rules set out in the same act or if circumstances have been revealed which disclose a lack of impartiality on the part of the Financial System Mediator.
Under Section 20 § 1, the Financial System Mediator is appointed by the Board for a four-year term and may be reappointed to the same position.
Under Section 20 § 2, the decision on the appointment of the Financial System Mediator is taken by the votes of at least 5 board members.
Under Section 22 § 2, the Financial System Mediator is relieved of his duties prematurely if, by a court judgment, he has been declared as lacking legal capacity or having limited legal capacity, has been convicted of a crime, deprived of his right to hold office in the legal or financial field, is unable to exercise his duties for more than 6 months due to illness or other insurmountable circumstances, or has died.
Under Section 22 § 3 the Financial System Mediator may also be prematurely relieved of his duties by the votes of at least 5 board members if he has lost his reputation.
Under Section 26 §§ 1 and 2, the board shall consist of seven members of whom the Government and the board of the Central Bank appoint one member each, four members are appointed by the unions of Organisations and one member by consumer rights protection organisations.
Under Section 34 § 1, the office of the Financial System Mediator is funded by the mandatory contributions from Organisations which are transferred to a special account at the Central Bank.
Case-law of the Constitutional Court and the Court of CassationConstitutional CourtIn a decision taken on 9 October 2012 (no. ՍԴՈ-1051), the Constitutional Court concluded that the restriction on the right of access to a court to challenge a decision of the Financial System Mediator was constitutional only in cases where the organisation in question had voluntarily waived its right to challenge such decisions by an agreement concluded with the office of the Financial System Mediator.
The Court of CassationIn its decision of 2 December 2016 (no. ԵԿԴ/5370/02/14) the Court of Cassation found that an organisation could challenge a decision of the Financial System Mediator on the merits if it had not waived its right to challenge such decisions by concluding an agreement with the office of the Financial System Mediator.
COMPLAINT
The applicant company complains under Article 6 § 1 of the Convention that it was deprived of its right of access to a court, in that it could not challenge the decision of the Financial System Mediator in substance.
QUESTIONS TO THE PARTIES
1. Does the Financial System Mediator satisfy the requirements of a “tribunal” within the meaning of Article 6 § 1 of the Convention?
2. Having regard to the domestic courts’ refusal to examine the merits of the applicant company’s claim, was the absence of a possibility for the applicant company to appeal against the decision of the Financial System Mediator in breach of its right of access to a court guaranteed under Article 6 § 1 of the Convention?