SELECTED CASE-LAW OF THE SPECIAL CHAMBER OF THE SUPREME COURT OF KOSOVO 2003-2008.
GODWIN MUSCAT AZZOPARDI
PRELIMINARY ISSUES 5
1 Res Judicata 5
2 Claims against the Kosovo Trust Agency for the responsibilities of an enterprise. 5
3 Orders to the Claimant. 6
4 Cases where the Chamber does not have jurisdiction over the Respondent: 7
5 Cases where the Chamber does not have subject matter-jurisdiction over the issue. 7
5 (A) Judgment executions: 7
5 (B) Criminal responsibility. 8
5 (C) Administrative Decisions. 8
6 Lis alibi pendens 8
7 Preliminary injunctions 9
8 Referrals 10
Judgments on the merits 12
1 Default Judgments 12
2 Statute of limitations, nine-month period 12
3 Challenges to privatizations and to Tenders 15
3 (A) KTA not entitled to privatize an enterprise as it is not/is no longer an SOE 15
3 (B) Can the KTA privatize an entity whose registered seat is not in Kosovo? 17
3 (C) Is the KTA authorized to privatize an enterprise when third parties have shareholding rights in the enterprise? 18
3 (D) The Tender process was not correctly carried out or KTA uses its discretion to cancel a tender incorrectly 20
3 (E) Allegations that the Tendering Procedure was incorrect 21
3 (F) Privatization process involving the proposed sale of property belonging to third parties 22
3 (G) Other challenges to the Privatization Procedure 28
4 Moratorium 32
5 Calling into the suit 33
6 Reviews 33
7 Protection of legality. 34
8 Employees’ rights to 20% of the proceeds from privatization. 37
UNMIK was established by the UN Security Council on 10 June 1999, the day after the North Atlantic Treaty Organization (NATO) suspended air strikes in its campaign against Serbian armed forces. In Resolution 1244 (1999), the Security Council obliged and authorized UNMIK to promote, “the establishment . . . of substantial autonomy and self-government in Kosovo, perform “basic civilian administrative functions where and as long as required” and maintain “civil law and order”. The Security Council declared: “All legislative and executive authority with respect to Kosovo, including the administration of the judiciary, is vested in UNMIK and is exercised by the Special Representative of the Secretary-General”
UNMIK promulgated a number of Regulations and Administrative Directions. The Kosovo Trust Agency was set up with a specific mandate. Regulation 2002/12 as amended by Regulation 2005/48 on the Reorganization and Liquidation of Enterprises and their assets (under the administration of the KTA) entered into force on November 21 , 2005. The KTA has management authority over socially-owned enterprises and the Regulation provides the mechanism through which Socially Owned enterprises should be privatized.
The main emphasis of KTA activity was indeed the privatization of the Socially-Owned enterprises which existed in Kosovo in 1999.
A new privatization law has been promulgated by the recently-formed Kosovo Government. It creates a successor agency for the KTA, known as the Privatization Agency for Kosovo. It is not yet certain, at the time of writing, when and how the new organization will commence functioning.
There are various theories about how these socially owned enterprises came into being. They were regulated by various laws applicable to them in Serbia prior to 1999. These laws are not codified and not indexed.
When assets are transferred to the subsidiary of an SOE through a spin-off procedure, the shares in that subsidiary are sold by tender and that constitutes the principal privatization process. The Rules governing such transfer are found in the KTA’s Rules of Tender for the Spin-Off privatization.
The Special Chamber has its jurisdiction laid out in UNMIK Regulation 2002/13 as amended by UNMIK Regulation 2008/4, in Section 4, inter alia granting the Chamber jurisdiction over Claims against the Agency and against SOE enterprises.
In June 2008 the OSCE Mission in Kosovo published a studied, independent report on the activities of the Special Chamber. Occasional references to that report will be made and it will be referred to as “the OSCE report”.
This present exercise is intended to highlight some of the significant decisions taken by the Chamber in its five years of operation. It is not an exhaustive study of all the case-law. When I prepared this summary I was still a Judge in the Chamber and I have not expressed opinions about the decisions or judgments taken by the Chamber. In case of important principles I have tried to quote from the judgments to reproduce faithfully the conclusions of the Chamber.
The Chamber’s deliberations result in decisions and in judgments. Preliminary issues are determined by decisions while issues decided on the merits are decided by judgments.
The Special Chamber has decided a number of preliminary issues to determine the admissibility or otherwise of each Claim filed with the Chamber. Section 25 of UNMIK Administrative Direction 2006/17 is the main Section ( though not the only one) dealing with the admissibility criteria to be considered. In these cases the Chamber dismisses the Claim by a decision without serving the Claim on the Respondent.
Some preliminary issues considered by the Chamber are listed hereunder.
1 Res Judicata
The Chamber has had occasion to address a number of cases where the claim itself showed that the issue between the parties had already been decided by a final judgment . The Chamber dismissed these cases as inadmissible without serving the claim on the Respondent.
A selection of such judgments includes:
SCC-04-017 decided on the ……
2 Claims against the Kosovo Trust Agency for the responsibilities of an enterprise.
The Chamber has dismissed claims against the KTA
• when the Claim was directed against an SOE under the administration of the KTA as well as against the KTA, and
• similarly in cases where the Claim was against an SOE but was filed only against the KTA.
Section 18, paragraphs 1 and 2 of UNMIK Regulation 2002/12 expressly provide that the Agency shall not be liable for any debt related to trust assets nor shall trust assets be liable for any debt of the Agency, and also that the Agency shall not be liable for any debt, action or inaction attributable to Enterprises.
Typical language in the decision of the Chamber runs as follows:
“The Chamber has seen the provisions of Section 18, paragraphs 1 and 2 of UNMIK Regulation 2002/12. Consequently this Claim cannot qualify under Section 4 of UNMIK Regulation 2002/13 because of this Chamber’s obvious lack of jurisdiction in terms of this Regulation and this is confirmed by Section 25.2 of Administrative Direction 2006/17.”
For the better instruction of the Claimant in these cases the Chamber has on occasion added:
“The Chamber would also point out, ….. that identical claims filed against the SOE itself are regularly being referred by the Special Chamber to the appropriate Municipal Court.”
Cases where the Chamber dismissed claims as inadmissible for this reason are, among others:
SCC-04-204 decided on the
3 Orders to the Claimant.
In other cases the Judge Rapporteur has issued orders, typically to the Claimant, according to the powers granted by Section 25.4 of UNMIK Administrative Direction 2006/17 requiring the clarification or supplement of the Claim. The main areas where this procedure has been adopted are property and labour claims. A typical property order would run as follows:
“The Claimant is requested to submit to this Court clarification and additional information on:
a) Alleged legal grounds for the restitution of properties;
b) Which legal provisions were violated on the occasion of the signing of the contracts of sale mentioned in the Claim. Claimants are to submit on what basis they believe that article 103 of the Law on Obligations, and article 8.a of the Law on modification and supplements of the Law on Real Estate Transfers have been violated.
c) Material facts pertaining to allegations of the Claim for the duress or pressure exercised at the moment of the signing of the contracts;
d) Were any steps taken, in Court or otherwise, to contest the validity of the contracts and if so, how and when.
Failure to respond to this order within 1 (one) week from acknowledgement of service of this order will lead to dismissal of the claim.”
The Chamber gives a time limit for response to the order. Time limits are to be observed under pain of dismissal of the Claim. The Chamber has frequently determined that the Claimant has not sufficiently responded to the requests made in the Order and dismissed the case .
Cases where the Claim has been dismissed on this basis include:
SCC-05-0263 decided on the
4 Cases where the Chamber does not have jurisdiction over the Respondent:
The Chamber has dismissed Claims where the Chamber does not have the necessary jurisdiction over the Respondent.
SCC-05-0165 decided on the …..; SCC-08-191 decided on the ……. Claim against a Municipality
SCC-05-476 decided on the and 08-0220 decided on the : Claim against the Government of Kosovo
SCC-05-561, SCC-05-579, SCC-07-0212: Claim against the Housing and Property Directorate
SCC–06-0093 : Claim against the Customs authority
5 Cases where the Chamber does not have subject matter-jurisdiction over the issue.
Examples are : judgment executions, criminal responsibility and administrative decisions.
5 (A) Judgment executions:
In 06-0086 decided on the the Claim was one for execution of a judgment. The Chamber decided:
“The Special Chamber does not have the necessary jurisdiction to enforce the execution of a judgment, particularly the judgment of another Court.
In this particular case the only request of the claimant is precisely this, since there is already a valid judgment in place, according to the facts as set out in the Claim.
Clearly therefore this Chamber has no jurisdiction over the issue. Therefore the request of the Claimant is not admissible.”
5 (B) Criminal responsibility.
Property has been confiscated in the 1940s and 1950s on the basis of laws which declared the owner of such properties as an enemy of the State. The taking of property was the result of criminal proceedings against the owner. Unless such taking has already been annulled by the Courts the Chamber does not have the necessary subject-matter jurisdiction on the issue.
Cases where the Chamber has dismissed such Claims include:
SCC-08-14 decided on the
5 (C) Administrative Decisions.
In some Claims the request to the Chamber is to nullify an administrative decision confiscating or otherwise taking property from the Claimant or his predecessor and to recognize the ownership right of the Claimant.
In SCC-08-0180 the request to the Chamber was as above. The Claim was against an SOE and the Claimant required nullification of a decision to confiscate property taken by the “ Chamber of Finance, Gjakova Municipality” taken in 1960. The Chamber decided that the decision by the administrative body was final and the Chamber has no subject-matter jurisdiction to decide on the claim.
6 Lis alibi pendens
Section 194 of the Law on Contested Procedure provides for the dismissal of a claim where a previous case is pending on the same merits and between the same parties.
SCC-06-0132: The Claim was dismissed as there was a Claim pending before one of the local Courts. The Claim had been filed with that Court prior to the Special Chamber commencing to function, hence the local Court had the necessary jurisdiction to hear the Claim.
SCC-08-0182 : The Claim was dismissed as the Claimant had filed a Claim against the same Defendant in the Municipal Court, which Claim was still pending. The Chamber had determined that the Claim had the same merits.
7 Preliminary injunctions
Preliminary injunctions are regulated by Section 52 of UNMIK Administrative Direction 2006/17. The Chamber has been quite strict in its interpretation of the requirements of Section 52.1 which require the party requesting the injunction to give credible evidence that immediate and irreparable injury, loss or damage will result to the party if no preliminary injunction is granted.
Examples of injunctions which the Chamber has issued will be found in
SCC-05-003 M decided on the
More injunctions have been refused than accepted and in general the reason for the rejection is the lack of observance of Article 52 abovementioned. Requests for injunctions which have been rejected include:
It has happened that the Chamber did not issue an injunction in privatization cases and the SOE in question has been privatized before a final judgment in the particular case. There have also been cases where the KTA, in its defence to an injunction request has stated that it does not intend to privatize an enterprise and it has subsequently done so. This may have prejudiced persons with a legitimate claim.
In SCC-07-049 the Chamber was given an oral as well as written information that the property at issue would not be privatized. The Chamber dismissed the request for the injunction. On the 24th May, two days after the Chamber received written assurance as above the property was tendered in a regular spin-off procedure. The land was eventually sold on the 6th November 2006 and resold to a third party on the 20th December 2006.
Injunctions are normally granted till the end of the case and against a deposit to be made by the party requesting the injunction. The amount of such deposit varies with the nature of the Claim and other circumstances. The KTA has sometimes been required to provide an undertaking in lieu of a deposit.
Section 4.2 of UNMIK Regulation 2008/4 and Section 17 of UNMIK Administrative Direction 2003/13 provide that the Special Chamber may refer specific claims, categories of claims, or parts thereof, to any court having the required subject matter jurisdiction under applicable law. No court in Kosovo shall exercise jurisdiction over a claim involving matters reserved to Special Chamber jurisdiction unless such claim has been referred to it by the Chamber.
The Chamber has typically referred property right cases involving cases falling under past applicable law and some labour-related cases to the Municipal Courts. Property cases are referred to the Court with jurisdiction where the immovable in question is situated in line with Article 56 of the Code of Civil procedure.
Cases between two commercial enterprise are referred to the District Economic Court of Pristina.
The Chamber may refer such claims either upon application by a party or on its own motion, if it is satisfied that the requirements of section 17 (b) above are met. Those requirements are that the Special Chamber is satisfied that the court to which it will refer the claim will make an impartial decision having regard to:
(i) The nature of the parties;
(ii) The value of the amount in controversy; and
(iii) Other circumstances of the claim.
The Chamber in its referrals usually states that the Municipal Court or the District Economic Court ( as the case may be, since those Courts have a different jurisdiction as set out in the Law on Contested Procedure) is competent and well-situated to make an impartial decision considering all circumstances of the case.
The Chamber normally reserves any eventual appeal from the judgment of the regular Courts to the Chamber.
Examples of cases related to immovable property claims which have been referred by the Chamber to the regular Courts are:
SCC-04-049 decided on the
Referrals on labour-related claims include:
SCC-06-058 decided on the
The Chamber has also referred some monetary claims. These include:
SCC-06-005 decided on the
Judgments on the merits
1 Default Judgments
Sections 49 and 50 of UNMIK Administrative Direction 2006/17 deal with default judgments. The Chamber has had occasion to deal with very few such judgments. Examples are
The Chamber has also had occasion to deal with a request to put aside a default judgment on the basis of Section 50.2 of UNMIK Administrative Direction 2006/17 ( previously also Section 50.2 of UNMIK Administrative Direction 2003/13.)
In SCA-04-0142, decided on the Claimant had initially brought a claim against the Respondent, requesting the payment of a specified amount, as a reimbursement of damages suffered due to breach of contract by the Respondent. Respondent had not answered the Claim and the Special Chamber handed down a default judgment in favour of the Claimant . The Respondent filed this Appeal to set aside the default Judgment .
The Chamber decided as follows:
“ The first reason is that the KTA was not given the necessary notice under Section 29.1 of the KTA Regulation. Hence the KTA did not know about the case and did not file its defence on behalf of the Enterprise.
The Chamber has considered that in previous cases the Chamber has held that such a failure does in fact affect the validity of the Claim.
For this reason the Chamber is setting aside the default judgment and in terms of Section 54 (b) of UNMIK Administrative Direction 2003/13 orders the continuation of proceedings.”
2 Statute of limitations, nine-month period
Section 6.1 of Regulation 2002/13 provides that a claim challenging a decision or action of the KTA can only be submitted within nine months from the later of :
a) the date that the claimant knew or with reasonable diligence should have known of the decision or action of the Agency or
b) the date on which the Special Chamber gives public notice that it is able to accept claims.
The Chamber initially considered this plea, raised various times by the KTA as defendant, as a preliminary plea.
In SCC-05-0092 Claimants affirmed that they had been Tenderers in Privatisation Tender proceedings for AE Constructive Enterprise “Kosova” Newco, and that they had been informed that their bid was successful. Subsequently the Claimant was informed that the Respondent had decided not to accept them as successful tenderers. Correspondence was entered into between Claimants and Respondents wherein Claimants were insisting that they should be awarded the contract, in particular since they had already deposited the relative amounts due as per Tender.
Claimants maintained that the moment that they paid the requested price they acquired a vested interest and should therefore have been awarded the Tender and that the failure by the KTA to fulfil the Tender conditions had caused damages to the Claimants .
The Chamber considered that from the evidence before it the Claim had been filed after the nine-month period provided for by law had already expired. The Claim was dismissed.
The Chamber made a further point in SCC-05-0185, already mentioned above, where the KTA had also pleaded the nine-month prescriptive period.
“Due consideration of the relevant starting-periods for counting the nine-month period as argued by the KTA will show that in none of the possibilities claimed by the KTA did the KTA make any action or perform any decision. Clearly the action or decision must be unequivocal and must show the clear intentions of the KTA, so that third parties can take the appropriate action in time. In the case under review there is no instance which can be defined as an action or decision but there are merely inferences that could have been drawn by the Claimant regarding the allegation that the property in question is socially-owned property.
The notion of constructive notice pleaded by the KTA cannot be taken as sufficient to amount to an action or decision.”
In 2006 the Chamber changed its position on the manner in which this issue is treated. The reasons for this change in policy are explained in SCC-06-0160 decided on the , where the Chamber analyses the concept of ownership in detail and concludes that the issue of statute of limitations is to be subsumed in an examination of the merits of the case in ownership claims. The Chamber no longer considered the issue of prescription as a preliminary plea to be decided before the merits.
“ The Chamber in this particular case is faced with an issue which has not yet been determined in cases where the Claimant has claimed ownership rights, which is precisely what the Claimant is doing in this present case. Claimant is here alleging that it has ownership rights over the shares and the property of the Company which the Kosovo Trust Agency is in the process of privatizing.”
The Chamber refers to the principles of Article 1 Protocol 1 to the European Convention on Human Rights and to its inclusion in UNMIK Regulation 1999/24. It also quotes relevant case-law of the European Court of Human Rights in relation to property rights.
The Chamber continues:
“The nature of the concept of property has been defined by the Court. For our purposes in this case, suffice it to state that an economic and commercial interest is considered as property. The value and the goodwill of a business was considered as property in Tre Traktorer Aktiebolag vs Sweden.
• Further, in this case we are clearly dealing with an attempt at deprivation of property, since the privatization process will deprive the Claimant of its alleged ownership rights. The most obvious example of deprivation of ownership is expropriation by the State and indeed the present situation is very close to an expropriation , namely the taking over of property against payment of compensation. However the procedure where expropriation can be considered valid is not followed in any way. For the purposes of Article 1 of Protocol 1 , for an expropriation to be valid, it must be carried out
• in the public interest,
• subject to the conditions provided by law and
• by the general principles of international law.
No law declares privatizations in Kosovo as being carried out in the public interest and in particular no law has provided for the taking over of the assets of the Claimant.
The conditions established for the procedure of privatization do not safeguard the right to ownership of an individual, natural or legal. In James vs U.K. the ECHR held that the Leasehold reform Act of 1967, whereby individuals with long leases were entitled, subject to certain conditions, to purchase the freehold of their leasehold property at a price set by statute, “deprived” the freeholders of their property, since they were unable to refuse to sell their property or to set the price for it. These facts are very similar to the provisions for the rights of the owners as they apply in privatization in Kosovo.
In the case under review the Claimant seeks confirmation of its rights to the ownership of property. It claims that the KTA has ignored its rights and is privatizing the assets of the Company. Without entering into the merits of the Claim, at this preliminary stage, the Chamber finds that should it accept the Respondent’s plea in favour of the nine-month prescriptive period, the Chamber would be depriving the Claimant of the right to have its claim of ownership reviewed by the Court.
This will run against the dictates of Article 6 (1) of the ECHR which expressly provides that:
“ In the determination of his civil rights and obligations…everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”
This principle has been confirmed and elaborated in a number of judgments of the European Court of Human Rights.
The issue under review qualifies under the heading of a civil right. Property rights have been invariably categorized as “civil rights” for the purposes of Article 6.
The Chamber finds that the provisions of Article 6 and of Article 1 Protocol 1 of the European Convention on Human Rights will be breached should the nine-month period provided for in the KTA Regulation be applied to the case where prima facie legitimate ownership claims are advanced. “
On the same issue in SCC-06-0046, among others, the Chamber states:
“ In line with decisions on the same point made by the Chamber in other cases, the Chamber will not examine this limitation issue until the Chamber has considered the substantive merits of the Claim. This decision is based on the fact that the Claimant raises a claim as to ownership rights and the Chamber holds that to deny an examination of the Claim in substance without entering into the merits will constitute a breach of the Claimant’s right to have his claim examined in accordance with the principles enunciated in UNMIK Regulation 1999/24 and the legal instruments included therein.”
3 Challenges to privatizations and to Tenders
Such Challenges have arguably been the most important cases with which the Chamber has had to deal. These challenges can be divided as follows
3 (A) KTA not entitled to privatize an enterprise as it is not/is no longer an SOE
Under Sections 5.3 and 5.4 of UNMIK Regulation 2005/18 the KTA is authorized to determine whether an SOE has been legally transformed into a Joint Stock Company after it has privatized or liquidated an SOE. After privatization of such an enterprise the KTA will not return the funds to the owner. The owner will rank with other creditors of the Company after deductions for administrative expenses and of the 20% of the employees’ dues.
In SCC 05-0482, Yumco JSC vs KTA, the Chamber reviewed all the evidence regarding the transformation of the SOE into a Joint Stock Company and concluded that the transformation had not been carried out according to the law applicable at the time.
In SCC 04-0188 the claim was for the Special Chamber to cancel the decision of the KTA, the Respondent, to privatize Balkanbelt , an enterprise operating in Suva Reka. Claimant maintained that such tender was contrary to UNMIK Regulation 2002/12. Balkanbelt had been transformed into a Joint Stock Company as Balkanbelt Rubber-Chemical Industry with mixed ownership, Suva Reka. The Claimant maintained that as Balkanbelt was no longer an SOE it could not be privatized.
In its defence the KTA argued as follows:
“ Referring to the KTA decision to administer Balkanbelt the KTA quotes Articles 5.1 and 5.4 of the KTA Regulation which shows that those enterprises that were registered as SOEs either at 31st December 1988 or any subsequent date are de facto under KTA administration. In the view of the KTA even under the unamended KTA Regulation the KTA had the authority to administer Balkanbelt. Under the amended Regulation it remains to be seen whether the transformation of Balkanbelt was discriminatory or not.”
The legal provisions which applied in this case were those of the pre-amended UNMIK Regulation 2002/12. The amendment to the Regulation by UNMIK Regulation 2005/18 does not apply here because such amendment became effective on 22 April 2005, after the filing date of this claim.
Section 5.3 of the said un-amended Regulation reads as follows:
“A subsequent transformation of an Enterprise into a different business organization form shall affect its status as a Socially-owned Enterprise only if such transformation either occurred before the 22nd March 1989 or, if it occurred thereafter, was
based on applicable law; and
(b) implemented in a non-discriminatory manner.
In order to establish the legality of the transformation under review the Chamber addressed two questions. namely whether the transformation itself was in accordance with applicable law and whether such transformation was carried out in a non-discriminatory manner. There is a detailed examination of the facts surrounding the actual transformation of Balkanbelt into a joint-stock company which is intended to show that the transformation was discriminatory. The KTA claimed that the transformation was carried out with a disregard for the rights of non-Serbian persons and that the Interim body abused its position of authority.
In its assessment of the facts, the Chamber noted inter alia that :
“In 1990 Interim Measures as published in the Official Gazette of the SRS on 7 August 1990 No. 43/1651 were abruptly imposed on Balkanbelt. These measures restructured the enterprise. The Interim Measures blamed Balkanbelt’s alleged disintegration on “workers of Albanian ethnicity in the separatist movement”. Director General Sokol Basha was replaced by Sosevic Vekoslav. The Workers’ Council and the Disciplinary Commission were replaced by an Interim Body of persons with apparently Serbian names (Article III). It “temporarily restricted” self-management of employees (Article IV).
In September 1990 (specifically in the four days between September 10 and September 14) Balkanbelt summarily dismissed 1,540 Albanian employees with the same Decision of Dismissal.”
Additionally and on a wider basis the Chamber established:
“ Workers of one ethnic group were dismissed en masse for alleged disciplinary reasons, and replaced by workers of another ethnic group. Notices of interim measures and of deadlines to challenge them were inadequate and discriminatory. Such notices were commonly published only in the language and publications of one ethnic group and were virtually unavailable to the other.” And
………… The Interim Measures blamed Balkanbelt’s alleged disintegration on “workers of Albanian ethnicity in the separatist movement” (page 13 of the Defence) …. It replaced the Workers’ council and the Disciplinary Commission with an Interim Body of persons with apparent Serbian names (Article III)….
Balkanbelt workers prior to the transformation had liberal self-management rights which were completely usurped in the transformation to Interim Measures. In September 1990 the interim administration of Balkanbelt dismissed 1,540 Albanian employees, giving each the standard reason that the employee had “willfully given over the working place he/she was appointed to”
The Chamber established the applicable law at the time of transformation and after pointing out that laws can be discriminatory both in their language and in their interpretation, quoted the UNHCR Report of 1994 which indicated and documented widespread discrimination against Albanian ethnicity workers at the time. The Chamber also confirmed actual discrimination against the workers of Balkanbelt.
The Chamber concluded that the transformation in question was not legally carried out and was therefore invalid with the consequence that the enterprise remained an SOE and it could therefore be privatized by the KTA.
3 (B) Can the KTA privatize an entity whose registered seat is not in Kosovo?
In SCC-04-0087 the Claim of the Claimant was based on the following facts:
“ By a decision of the Company, confirmed by the Belgrade Economic Court decision No. 3850/99 dated 21st June 1999 the Company’s ( Farmakos’) head office was relocated from Prizren to Belgrade. By a Belgrade Commercial Court decision No. 349/01 dated 31st May 2002 the Company was brought into conformity with the Law on Enterprises, the Law on Categorization of activities, and the Classification Unit Register.
Claimant maintains that the relocation of Farmakos was made according to the applicable laws in the Federal Republic of Yugoslavia. UNMIK Regulation 2002/12, Section 3, Par. 1, Subpar. 2 states that the applicable law shall be the law applied within the territory of Kosovo and Metohija according to the UNMIK regulation 1999/24.
Cosequently the KTA’s announcement of the invitation for bids for the Company is a violation of Section 5, Para. 5.4 of UNMIK Regulation 2002/12 and 1999/24.”
The Chamber, in its judgment considered :
“Section 6 (1) B of UNMIK Regulation 2000/54 specifically refers to UNMIK as having the jurisdiction to administer “socially-owned property” with effect from the 10th of June 1999.
The assets of Farmakos in Prizren fit this description in view of the facts as they have resulted to the Chamber.
As the Respondent points out and as confirmed by the Claimant’s attorney during the hearing, since 10 June 1999, these assets were administered and managed independently of any assets that may have existed outside of Kosovo. Furthermore, these assets are “otherwise subject to the authority of UNMIK” according to UNMIK Regulations 1999/1 and 2000/54 and UN Security Council Resolution 1999/1244. It follows that :
FARMAKOS was operating in the territory of Kosovo.
The assets of FARMAKOS are located in Prizren, Kosovo.
FARMAKOS’ assets are located in Kosovo after 10 June 1999 and since that date, these assets were administered and managed by the SOE itself independently of its assets outside of Kosovo (Prizren was clearly the base operation).
Moreover during the hearing the Claimant’s legal representative confirmed that although the enterprise had allegedly been transformed, it continued to be an SOE and to be made up of social capital.
Moreover the representative did not contest that from the 10th of June 1999 the local management (i.e. the management with a seat in Prizren) acted independently.
The registration of the change of seat of the enterprise occurred after the 10th of June 1999. Hence in view of the UNMIK Regulation 1999/24 on the law applicable in Kosovo it has no legal validity.. This being so there can be no doubt that the enterprise is under the total jurisdiction of the KTA and the allegations of the Claimant are ungrounded in fact and at law.”
The Claim was rejected by the Chamber.
3 (C) Is the KTA authorized to privatize an enterprise when third parties have shareholding rights in the enterprise?
Case SCC-05-0473 before the Chamber had the following factual allegations:
In 1990 the enterprise “Hotel Share Company Kosova-Hotel Kristal” was transformed into a Joint Stock Company, which was named “Evropa”. On 18 November 1992, the enterprise was registered in the Economic Court of Prishtinë/Priština as a Joint Stock Company.
After 1999, the employees and management were able to take back the enterprise, which resumed its activities in Gjilan/Gnjilane. However, on 6 May 2000 a fire destroyed the hotel. The damages suffered by the enterprise were estimated in 1,200,000.00 DM. The employees decided to try to restore the Hotel to a going concern. As a result, some funds as well as some employee’s savings, donations and loans were used for the restoration of the property . Personal capital and labour were registered as share capital. The Hotel was thus rendered operational once more.
On 16 August 2000, the enterprise was provisionally registered as a Joint Stock Company pursuant to UNMIK Reg. 2000/8 dated 29 February 2000, AD 2000/4 dated 2 March 2000, and AD No. 2000/15 dated 21 June 2000.
“On 30 June 2003 the Claimants tried to register the company in the business registration office in Kosovo, however, a certificate of registration was not issued by the authority, and so far, the claimants have not received any reply from the registration office regarding this matter.
In conclusion, most of the company’s capital is privatized. As above stated the Claim requests the Chamber to oblige the Kosovo Trust Agency to acknowledge the right of the Claimants to a shareholding of 58.65% of the share capital. A detailed list of each shareholder’s claim has been filed by the Claimants.”
The Chamber determined that The KTA , as an administrative Agency had not acted in the proper manner and according to the applicable law. Among other failures the KTA had not given the Claimants the right to a hearing or to be able to explain their alleged title to the shares of the Company.
“…… the KTA did not provide the Claimants with any form of opportunity to explain or argue their position. Section 10 of UNMIK Regulation 2005/18 provides that in respect of the power to privatize property the KTA shall establish operational policies that provide for compliance with the principles of Article 1 Protocol 1 to the European Convention on Human Rights:
“(…) including matters of prompt due process (…)”.
Independently of whether the KTA has established such policies, in the present instance the Claimants were given no opportunity to plead their case. The KTA did not inform them that it had decided to consider the company as an SOE, nor of the reasons for such determination.
Moreover UNMIK Regulation 2000/8 provides in Section 4.1 that UNMIK may reject or suspend an application on a number of grounds. Should this be done the business “shall have the right to submit an appeal to UNMIK through the Office of the Municipality in which it is located within fourteen (14) days of the date of the Decision citing the grounds for rejection of the application under section 4.1 or the notice of revocation or suspension issued pursuant to section 4.2.” and
“4.4 A business affected by the determination made by UNMIK under section 4.3 may apply for review of that determination to a court of competent jurisdiction in Kosovo.”
The Claimants did not receive any notice to this effect. Indeed on 30 June 2003 the Claimants tried to register the company in the business registration office in Kosovo, however, a certificate of registration was not issued by the authority, and so far, the claimants have not received any reply from the registration office regarding this matter.”
Moreover from an examination of the evidence produced, the Chamber concluded that:
“The Chamber finds that the Claimants have proved their Claim to be shareholders of the Company. They are therefore entitled to the relative percentage of their shareholding from the value realized through the sale of the enterprise, less the 20% entitlement to the employees of the Company. If any of the Claimants are still considered employees of the Company, such entitlement as employees is separate from the amounts due under this judgment. The employment relationship is independent from the relationship arising from shareholding in a company. If any of the claimants were still registered as employees on the date of privatization of the company this judgment shall not prejudice any right of such employees to participate in any amounts due to employees. “
The Chamber ordered the KTA to recognize the proportional amount as due to the individual shareholders.
3 (D) The Tender process was not correctly carried out or KTA uses its discretion to cancel a tender incorrectly
The OSCE Report has this comment on these types of cases:
“Since its establishment, the Special Chamber has altered its view of the nature of the Trust Agency and its authority to cancel a tender. Initially, the Special Chamber provided the Trust Agency with wide discretion to cancel a tender. Then, it limited this discretion and noted that the Trust Agency must act fairly. Most recently, the Chamber has classified the Trust Agency as an administrative body and the cancellation of a tender as an administrative decision that must meet the requirements of the Law on Administrative Procedure.”
The Chamber has indeed changed its determination criteria in this aspect. To quote the OSCE Report:
“In a judgment dated 10 August 2004 (Osman Mecinaj et al. v KTA, SCC-03-0002) the Special Chamber noted without comment that the Rules of Tender leave the Trust Agency discretion to cancel or proceed with the tender, if the requirements of the relevant section of the Rules are met.
• In a judgment dated 10 October 2006 (Grand Group Partnership, JSC v KTA, SCC-06-0176), the Special Chamber held that the Trust Agency must follow the normal principles of law which include the obligation to abide by its own Rules of Tender and treat parties equally. The tender process does not create a contractual relationship, but rather an obligation on the Tenderer to act fairly. The Rules of Tender bind the bidders, but also impose a requirement on the Trust Agency to implement them equally on all bidders.
• In a judgment dated 16 May 2007 (Doni private company v KTA, SCC-06-0436), the Chamber quoted several articles of the Law on Administrative Procedure (1986) and stated that this law applies to the Trust Agency under UNMIK Regulation No. 1999/24:
“the Chamber has no doubt that the [Trust Agency] falls within the definition of an administrative organ. […] The [Trust Agency] took the decision to disqualify the claimant from the tender-bid without any verification. This action goes against the provisions of Section 135(1) of the [Law on Administrative Procedure]”.
Regarding the Trust Agency’s alleged sole discretion to disregard any tender:
“the Chamber notes that the concept of absolute discretion of administrative authorities has suffered various inroads in law over the last years in the interest of legality, public interest and transparency as well as on the basis of fundamental human rights. The [Trust Agency] cannot disregard all rules […] Indeed any administrative decision is to be fair and reasonable as well as based on the correct argumentation. Absolute administrative discretion is now a myth and the administrative authority needs to prove that its decisions are taken on the basis of what makes legal sense.”
3 (E) Allegations that the Tendering Procedure was incorrect
In SCC-06-0176, the Grand Hotel case, decided on the the Claimant made specific allegations and asked the Special Chamber to determine that the Respondent conducted the bidding for the sale of NewCo Grand Hotel LLC illegally and unfairly, and therefore the bid by the provisional winner Unio-Commerce was void .
“The Claimant alleges that the Respondent acted outside its authority, breaching its contract with claimant and acting negligently in pre-qualifying Unio-Commerce. Respondent allowed Unio-Commerce to bid on the Grand Hotel without meeting the requirements of the Rules of Tender. Unio-Commerce did not submit documents, in English, that prove it meets explicit requirements concerning its business format, its affiliated company, its hotel experience and its history of financial success. Its partnership agreement with affiliate Dooel-Remis (51% of partnership), is fictitious and fails to meet requirements in KTA’s published Rules of Tender. “
Claimant also submitted that the winning bidder was not strictly in the line of business of hotel operation.
The Chamber held several hearings in this case. It examined in detail all the specific allegations made by the Claimant and found that there were not enough grounds to justify the rescission of the Tender. The Chamber also commented on some of the KTA attributes as they emerged from the judgment. The following quotation from the judgment is significant:
“ The attitude of the KTA , as it has emerged throughout the consideration of this case, has emerged as a sufficiently flexible one to enable as many bidders as possible to compete in the Tendering procedure. The Chamber finds no fault in this with the explicit caveat that basic conditions are adhered to by all and that all tenderers are treated equally at all times.
The Chamber will make reference to the fact that the Respondent engages a pre-qualification Committee to evaluate the eligibility criteria for bidders. The Respondent maintains that the committee comprises members of the Kosovo Trust Agency who have knowledge of the deal, lawyers to ensure that the KTA does not act outside its mandate, an accountant to assess the financial data, an auditor to oversee the workings of the committee and those with interests of the Socially Owned Enterprise who are considered best placed to consider the information. The Respondent maintains that it respects the independence of such Committees. However the Chamber finds that it is still the Respondent who, in the considered view of the Chamber, bears the full responsibility to ensure compliance with material Tender requirements. Reliance on the Committee does not exonerate the Respondent from its legal liabilities.”
3 (F) Privatization process involving the proposed sale of property belonging to third parties
The Chamber has had occasion to deal with such cases which have proved to be highly significant to the way in which the Chamber is regarded by third parties. In these cases third parties have alleged that their property was being privatized as part of the assets of an SOE. A leading case decided by the Chamber in this regards is SCC-06-0010 decided by the Chamber on the 20th November 2007.
The facts as alleged by the Claimants were substantially as follows:
“The claimants state that the KTA is issuing a tender for the privatization of the Restaurant Parajsa LLC. The property is now registered in the name of the SOE, the second Respondent but according to the Claimants they are rightful owners as heirs. In April 1948 the Court appointed a curator for Hadzijevic and Konstadinka Strahinja. In 1959 the property was nationalized by the Municipal Commission for nationalization. No compensation was paid. The owners appealed to the Nationalization Committee in Pristina but the nationalization was confirmed. However the owners again appealed and on the 9th of May 1960 the Nationalization Committee of Mitrovica annulled the nationalization.
On a further appeal in 1961 the Committee decided to “exempt the single-storey business building located at 28 Ramiz Sadiku Street in Mitrovica “from the nationalization”.
In December 1989 the original owner died and the Claimants were declared lawful heirs by the Municipal Court of Mitrovica.
The tender for privatization was launched on the 27th of October 2005 and the following day the Claimants sent a letter of objection which the KTA answered by saying that the claimant could complain to the Special Chamber. Claimants informed KTA of their intention of filing a claim.”
The Claimants maintained that the decision to grant the disputed property to the SOE is null as the relevant Committee had already declared the property to be in the ownership of the parents of the Claimant. The KTA in its defence stated that the SOE was the rightful owner of the property but at the same time it maintained that the Respondent SOE acquired the property by adverse possession.
The Chamber made a detailed analysis into the chronology of the facts relating to the property in question. It concluded:
“Further, by the decision of the Mitrovica Municipal Court of 25 May 1990 the court established that the Claimants as the only legal heirs of the deceased owner were the owners of the disputed property. The law which regulates such acquisition of property by adverse possession is the Law on Basic Property Relations. The KTA refers to Section 28 fourth paragraph which provides as follows:
“The conscientious holder of the real estate, over which somebody else disposes of the property right, shall acquire the property right over such an object by adverse possession after the expiration of 20 years”
In order to establish whether the Respondent SOE was a conscientious holder of the land it needed to be determined whether the SOE believed that it had a title to the ownership of the property, in other words as to whether it was in good faith at the time it came into the possession of the property.
The Nationalization Committee issued a decision on the 9th May 1960 which stated that the property in question should be exempted from Nationalization (decision number 207/59). On the 17 December 1960 the Municipal Council of Kosovska Mitrovica deciding upon the request of the General Hospital Kosovska Mitrovica et al. granted the long term use and management of the building and the yard on cadastral lot n. 1569 to the SOE Ibar. On the 6th June 1961 the executive Board of the People’s Committee amended the decision dated 17th December 1960 and as a result the property as a whole was declared exempted from the nationalization and was declared to belong to the previous owners.
“Hence the grant to the SOE was made after there had already been a decision to exempt the property from nationalization. This means that the property was still private property and could not have been assigned by any title to third parties.”
The Chamber then explains why, in its opinion, the principles of Article 1 Protocol 1 to the European Convention on Human Rights are not protected under applicable law. The operative part of the judgment runs as follows:
“The KTA further argues that should the Claimants prove their title, their only remedy will be the possibility of participating in the proceeds from the privatization process relative to the SOE. The KTA quotes in this regard UNMIK/REG/2005/18 amending UNMIK Regulation 2002/12, which entered into force on 22 April 2005. The relevant provisions of the Regulation 2005/18 are Sections 5.3 and 5.4…..
These articles end with the sentence:
“In relation to Sections 5.3 and 5.4 the principles of Article 1 Protocol 1 European Convention on Human Rights shall be followed.”
The claim was filed on 9 January 2006 and the amended Regulation 2005/18 applies.
The Chamber then refers to Article 1 of Protocol I to the European Convention on Human Rights ,and continues:
“ The above mentioned provisions of UNMIK Regulation 2005/18 appear to allow the Kosovo Trust Agency to carry out a disguised expropriation, under the term of “disposition of assets”. The Chamber notes that in the case of expropriation, additionally to other requirements, the European Court of Human Rights has held that with regard to the law which provides for expropriation, this law must be “sufficiently certain and accessible to the public” In the Lithgow vs UK case the Court confirmed that the relevant test requires “the existence of and compliance with adequately accessible and sufficiently precise domestic legal provisions”. The phrase “disposition of assets” is, in the considered opinion of the Chamber, not sufficiently clear and unequivocal. Indeed the applicable Law on Expropriation in Kosovo of 1978 is clearer as to what property can be subject to expropriation. This law provides for expropriation under specific conditions and it is applicable law in terms of UNMIK Regulation 1999/24. The Law on Expropriation, Official Gazette of Kosovo No. 21/78 provides for conditions under which immovable property can be expropriated. In article 2 it provides that real estate may be expropriated when necessary for the construction of economic, housing, communal, health, cultural and other objects of common interest. Article 3 provides that the common interest for construction of assigned objects, as well as all other works involving real estate is determined by city planning.”
The Chamber noted that it was obvious that the above-quoted provisions of UNMIK Regulation 2005/18 allowing KTA to deprive private owners of their property under the definition of “disposition of assets” without imposing any precise conditions for such deprivation and not done in accordance with the conditions prescribed by Article 1 Protocol No. 1 of the ECHR and the Kosovo Law on Expropriation are of such a general character that they are inconsistent with the terms “law” or “lawful” in the meaning of the European Convention on Human Rights. Such provisions do not provide appropriate procedural guarantees for the person deprived of his property, do not exclude arbitrariness and are therefore not compatible with the rule of law.
“Based on the above the Chamber finds the provisions of Section 5.3 and 5.4 of UNMIK Regulation 2005/18 contradictory to Article 1 of Protocol 1 of the European Convention and therefore superseded by the provisions of Article 1 Protocol 1 of the European Convention which must be applied directly.
Although Section 5.3 and 5.4 of UNMIK Regulation 2005/18 specifically refer to the principles of Article 1 of Protocol I to the Convention for the Protection of Human Rights and Fundamental Freedoms, the provision above-mentioned is not in line with the principles and relevant jurisprudence of the ECHR, inter alia:
it does not provide for the establishment of bodies authorized to carry out such expropriation and to establish the existence of a public or general interest as a pre-condition for the deprivation of property;
it does not offer a definition of public or general interest;
it explicitly excludes an equitable compensation to the owners of the expropriated property by linking such compensation to the proceeds of such disposition (without prejudice to the rights of creditors and other interested third parties, net of any payments required to be made under Section 10 of UNMIK Regulation 2003/13), rather than to the market value of the expropriated property.
As the Chamber has established, the property in question is the private property of the Claimants, lawfully inherited from their predecessor. This property is to be attributed by KTA to other private persons through the process of privatization. This process of “disposition” performed by KTA deprives the legal owner of its private property and redistributes it to another private owner without any legal justification.”
Additionally this case is important because the Chamber has also considered the applicability of Article 6 of the European Convention on Human Rights in relation to Section 10.5 of UNMIK Regulation 2002/13.
“In addition to the above, the Respondent relies on Section 10.5 of UNMIK Regulation 2002/13 which reads: “No party shall be entitled to a remedy that would require the rescission of a transaction or the nullification of a contract entered into by the Agency pursuant to its authority under UNMIK Regulation No. 2002/12”. In other words, the legal owner deprived of his property cannot obtain rescission of the sale (privatization) contract and the Chamber is bound to grant the owner a monetary compensation from the proceeds minus liabilities after the sale of the property. This provision is inconsistent with Article 6 (1) of the European Convention as it represents a limitation of the right of access to a court.
Decisions of administrative organs such as the KTA by which civil rights are determined are included in the protection afforded under Article 6 (1) of the Convention. The European Court of Human Rights established the principle that “the Convention calls for at least one of the following systems: either the jurisdictional organs themselves comply with the requirements of Article 6 (1), or they do not comply but are subject to a subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of Article 6 (1) .
The KTA does not provide the guarantees required by Article 6 of the European Convention. Therefore, its decisions should be subject to full judicial review. In this case the Chamber will stress the operative word “full”. The fact that in terms of Section 10.5 of UNMIK Regulation 2002/13 a transaction cannot be rescinded or a contract annulled restricts the right of a Court to exercise a full judicial review and grant a necessary remedy. So this provisions of Section 10.5 of UNMIK Regulation 2002/13 run against the provisions of Article 6 (1) of European Convention of Human Rights.
Where civil rights are involved, the Chamber finds that it is not possible to reconcile the requirements of Article 6.1 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, with the limitations of Section 10.5 of UNMIK Regulation 2002/13. It is also impossible to reconcile the provision of Section 5.4 of UNMIK Regulation 2005/18 allowing on one hand the Kosovo Trust Agency to deprive legal owners of their private property and at the same time obliging the Kosovo Trust Agency and the Chamber to observe the principles of Article 1 of Protocol I to the ECHR.
Based on the above the Chamber finds the provisions of Section 10.5 of UNMIK Regulation 2002/13 are contradictory to Article 6 (1) of the European Convention and therefore superseded by the provisions of Article 6 (1) of the European Convention which must be applied directly.
UNMIK Regulation 1999/24 as amended by Regulation 2000/59, Section 1.3, Subsection b), reflects the commitment undertaken by UNMIK since its establishment to uphold human rights standards and to comply with the principles of European Convention on Human Rights.
Apart from the dictates of UNMIK Regulation 1999/24, already mentioned above, UNMIK Regulation 2001/9 on the Constitutional Framework for Kosovo states inter alia that
3.2 The Provisional Institutions of Self-Government shall observe and ensure internationally recognized human rights and fundamental freedoms, including those rights and freedoms set forth in:
The Universal Declaration on Human Rights;
The European Convention for the Protection of Human Rights and Fundamental Freedoms and its Protocols;
3.3 The provisions on rights and freedoms set forth in these instruments shall be directly applicable in Kosovo as part of this Constitutional Framework.
There is no doubt that in these circumstances the provisions of the Convention override those of UNMIK Regulations where these two legislative enactments conflict…….
For these reasons and in view of the fact that the Chamber is convinced that the Claimants are the legal owners of the property in question, the KTA cannot include such property among the assets of the SOE to be privatized.”
SCC-05-0185 decided on the regarded another allegation of ownership of property contested by the KTA. In that case the Claimant stated that he had purchased properties in Kosovo, ( Pristina and Peja) which are registered in the relative possession lists in the cadastral records.
Both properties were bought from a private Company called Sipad Komerc JSC Sarajevo (which was a private company with 100% private capital structure) as the legal heir of the former LO Sipad Komerc BOAL Furniture Wholesale (which was an SOE), which is registered as the cadastral owner of these properties. The Claimant also exhibited a certified copy of a decision by the competent authority in Sarajevo, the cantonal Court decision No. UF/I-199/02 dated the 17th June 2002 as to the transfer of the conversion of ownership of Sipad Komerc from socially owned to a private company with registered office in Bosnia and Herzegovina.
The Claimant requested the Cadastral office in Prishtinë/Priština and the Cadastral office in Pejë/Peć, the Respondent (KTA) on 30 January 2002, and the Supreme Court in Kosovo (case No. 113/2002) to register the properties in his name by transfer from the original owner, the SOE Sipad Komerc BOAL to the successor Sipad Komerc JSC Sarajevo to himself as the present owner. The Claimant exhibits documentation relative to such requests.
The cadastral office in Pejë/Peć did not comply with the request within the deadline. Therefore, the Kosovo Cadastral Agency carried out the registration of the change of ownership on 30 July 2004. Moreover, the Supreme Court of Kosovo in Prishtinë/Priština by verdict No 113/2002 dated 4 March 2003 ordered the Chief Executive Officer of the Municipality of Prishtinë/Priština, within 30 days, to make a decision according to the request of the Claimant. This was done and the case was returned for a new decision.
The KTA wrote on the 29th October 2003 to the Cadastral offices in Pejë/Peć and Prishtinë/Priština and objected to the request of the Claimant for a change in cadastral registration. The KTA claimed that these properties were still in the ownership of an SOE and subject to the management of the Agency.
The Chamber examined in detail the applicable Regulations and the Serbian Law on Enterprises regarding the definition of enterprises under the administration of the KTA. The Chamber concluded as follows:
“ In summary the KTA had the exclusive authority over the lands in question in Kosovo in these eventualities:
1. a) If the land was owned by a socially owned enterprise as defined above or
b) by a company where the majority of the assets were socially owned on the 31st December 1988 or later, or
2. If the assets located in Kosovo comprised socially-owned property as at the 22nd March 1989 or later.”
The Chamber concluded that if this was so the Claimant could not purchase the property freely as he did in 2001. The enterprise therefore fell within the definitions above stated as laid down in UNMIK Regulation 2005/18. The decision of the Sarajevo authority could not affect the status of the property.
The Chamber also noted that apart from the administration of the property being vested in UNMIK at the time of contract, the sale of a land belonging to a socially –owned enterprise required various formalities, including a decision of the Workers Council, according to the statute of the enterprise, it also required compliance with the relevant articles of the Law on Transfer of Real property (SAPK 45/81 and 29/86). There are also restrictions preventing an SOE from transferring property to individuals except in specific cases.
“ The fundamental issue underlying all these arguments may be reduced to one question.
UNMIK in 1999 became the administrator of all property in Kosovo, if such property was socially owned. The Respondent maintains that in 1989 the property in Peja and Prishtinë/Priština was owned by a Socially Owned Company.
It bases its argument on two facts, the first is that Sipad Komerc in Kosovo was functioning as an independent entity only functionally related to the Sarajevo enterprise and this Kosovo structure was socially owned, and the second that apart from this, the Commercial Court in Sarajevo only registered Sipad Komerc as a Joint Stock Company on the 17th June 2002. “
The Chamber also based itself on Section 6 of UNMIK Reg. 2000/54, ( Administration of Property) in rejecting the Claim.
In SCC-04-0130 , Wood Industries, decided on the the Chamber dealt with an allegation that the KTA had breached its obligations towards a foreign Company following a commercialization contract. The Chamber after a detailed analysis of the law applicable on statute of limitation, including the local Law on Obligations, rejected the Claim.
3 (G) Other challenges to the Privatization Procedure
In SCC 06-436 the Chamber rejected the Claim for the approval of Claimant’s tender bid for Newco Universiteti 1 Punetoreve, Ferizaj, Sh.P.K. L.L.C. as the Newco had already been transferred.
The alternative Claim of the Claimant for compensation for damages caused by the Respondent KTA was accepted in an amount of € 21,210 (twenty one thousand two hundred and ten Euros) .
In its Claim dated the 3rd October 2006 the Claimant maintained that it was a bidder in the Tender for the privatization of the Newco Universiteti 1 Punetoreve, Ferizaj, Sh.P.K. L.L.C.
Claimant tendered €806759,60. and on the 6 th September 2006 it was proclaimed the winning bidder. Together with the initial capital deposit of € 1250 the total amount of the bid was €808009,60. When submitting the initial bid the Claimant made a mistake in that the figures as tendered were indicated at €800675 while the words read “eight hundred and six thousand…” The mistake was repeated in the Third step of the process, where the words read correctly “ eight hundred and eight thousand and nine Euros and sixty cents.” The bid contains the phrase
“ The sum in line 3 is the total amount of money that you have to pay to the Agency if you are chosen as the winning bidder”
In line 3 the words are correctly written, the figures are mistaken.
After the initial acceptance, the Respondent wrote to the Claimant on the 20 th September 2006 and cancelled the bid on the following grounds:
“The bid…was rejected by the KTA. This is because you filled in the digital numbers on schedule incorrectly and furthermore the written numbers used for clarification were equally inconsistent. In summary neither the numerical digits nor the written numbers have any degree of consistency and integrity on the face of your bid and it was therefore deemed to be an invalid bid.”
Claimant contended that the practice is always to consider the words as having precedence over the figures and therefore its bid should have been accepted. The KTA maintained the contrary.
The Chamber examined the allegation of the KTA to the effect that it had absolute discretion to cancel a tender . The Chamber restated its position on this issue and found that in these circumstances the KTA did not act in a correct manner and did not fulfill all its obligations as an adjudicating tendering authority.
The claimant had asked for the approval of his bid and for the transfer of the Newco to itself. This remedy could not now be granted as the Respondent had finalized the sale of the Newco in question. Moreover the Chamber pointed out that it could only rescind this transaction should the provisions of Section 18.4 of UNMIK Regulation 2005/18 be satisfied. The Claimant did not plead that such elements applied in this case. Far less was any evidence tendered in this regard. The Chamber did not therefore enter into the merits of such an issue.
The alternative Claim of the Claimant was for the granting of compensatory damages due to the incorrect procedure adopted by the respondent. The Chamber found that the Claimant was justified in such claim since the Respondent did not act in a proper manner in terms of the tendering and legal provisions. The Chamber then considered the quantum of such damages. The Claimant’s representative maintained that the amount due as liquidated damages should be equivalent to half the amount tendered by the Claimant in his bid.
“The Chamber finds that the Claimant could indeed not utilize his funds pending a final decision on the matter. It is not clear whether the funds were deposited in a Bank account, but claimant maintains that he had set aside other funds for the eventuality of being awarded the tender. The Claimant is to be compensated for the fact that he was not granted access to a commercial opportunity through no fault of his own. In these circumstances the Chamber allocates compensatory damages in the amount of € 21,210 (twenty one thousand two hundred and ten Euros) being a calculation of 3.5% (normal banking interest) between the date of the first adjudication of tender , namely 6th September 2006 to the approximate date of service of this judgment on the amount of the bid, taken as per the words of the bid.
Respondent is to pay the amount of € 21,210 ( twenty one thousand two hundred and ten Euros) within fifteen days from service of this judgment”.
In SCC-07-008 decided on the the Chamber accepted the fact that the KTA refused to accept a tender bid as valid due to the fact that the Claimant did not make the necessary bid-deposit. Claimant maintained that he was owed money by another SOE and expected that the KTA would set off the bid-bond against such an amount allegedly due.
In SCC-07-0105 decided on the the chamber rejected the Claim of the Claimant against the KTA for cancellation of the tender as it found that the cancellation was the direct result of the collusive actions of the Claimant.
In SCC-07-0263 Claimant submitted a claim to the Special Chamber for compensation of damages caused to the property which he bought during the privatization procedure of the Respondent SOE. Claimant alleges that the damages were caused by an illegal occupant of the property in question between the time of acceptance of the bid and the final sales contract of the purchase of the property by the Claimant.
The Chamber , after examination, concluded that :
“In terms of Article 456 of the Law on Obligations the risk or loss of the object rests with the seller until the object is taken over by the buyer. But in virtue of the agreement signed before the final contract, the buyer accepted that the risk was not to be that of the seller. Moreover the “Agreement of sale” signed by the Claimant, in point 5.1.8 provides that
“ the buyer hereby waives any claim against the KTA or the Socially Owned Enterprise for any missing assets, which may be listed in the declaration of transfer”.
The law does not prohibit the contracting parties from varying the normal legal position as it obtains in the Law on Obligations. The Chamber found that in the Tendering procedure the seller is entitled to make fair and reasonable conditions with regard to the nature of the final transfer of the property in question and as to the warranties attached to the sale. The bidders are thereby made aware of these conditions and it is then up to them as to whether they want to bid and buy subject to such conditions.
In the present case it was made very clear what the position was and that the risk relating to third party occupation lay with the bidders, not with the seller. Claimant in fact waived all rights to file claims against the seller on the basis of anything related to the occupation of the property by third parties.
In SCC-06-0490 the Claim was for the annulment of a tender on the basis that the KTA had opted for a special spin-off procedure of tendering rather than an ordinary spin-off. The basis of the Claimant’s argument was that the tender would have achieved a better price had an ordinary spin –off procedure method been adopted. The KTA in its defence maintained that the Claimant had not proved that the KTA was liable in terms of Section 18 of UNMIK Regulation 2002/12 as amended.
The Chamber accepted this defence and rejected the Claim.
Finally in SCC-07-0435 the Chamber rejected the request for acceptance of the Claimant as the winning bidder in a tender, on the grounds that the KTA was right in not accepting too low a price for assets of an SOE. However the Chamber made an interesting observation.
“The Chamber has considered that according to the practice and to the Tender Rules, the Agency adopts a double approach to the tendering process evaluation. The Agency declares a winning bidder and asks for a deposit of a percentage of the bid amount and then the KTA Board retains the right to cancel such a declaration for a number of reasons
This double approach is not desirable as it gives a winning bidder the impression that he has a binding agreement with the Agency although the initial award is subject to the overriding discretion of the Board of the Agency. “
The KTA requested a moratorium decision in terms of UNMIK Regulation 2005/48 in relation to a number of enterprises falling under the Trepca umbrella. The Chamber has since had occasion to discover that this is not a full list and other enterprises controlled by Trepca are not included in the list. The Chamber granted the moratorium by decision SCR-05-001 on the 9th March 2006 . The Chamber decided:
“2. As of the date of this Moratorium Decision all actions, proceedings or acts of any kind aimed at enforcing or satisfying any claim against Trepca Under KTA Administration as defined above, or its assets shall be suspended and shall only continue with the permission of this Court in accordance with section 5.2 of UNMIK Regulation 2005/48.
3. Within ten Business Days from the date of this Moratorium Decision, KTA shall publish a notification hereof in accordance with section 5.2 of UNMIK Regulation 2005/48.
4. As of the date of the Moratorium Decision until the appointment of the Administrator, KTA or the Enterprise with the written consent of KTA shall be required, pursuant to section 5.5 of UNMIK Regulation 2005/48, to obtain an order from this Court for the validity of any of the following transactions:
(a) The sale, disposal, alienation, transfer or rental of any land assets of the Enterprise, in whole or in part; and
(b) The creation of pledges, mortgages or other security against the property of the Enterprise or any part thereof.
5. No later than two and one-half (2 ½ ) months from the date of this Moratorium Decision, KTA shall submit to the court all submitted bids and an evaluation report for the Court including proposals for the most suitable bidders to be appointed by the Court as Administrators and Service Providers pursuant to sections 7 & 8 of UNMIK Regulation 2005/48. “
In terms of the Regulation the procedure should have been followed up by the appointment of an administrator by the Special Chamber after a recommendation by the KTA. The KTA issued a tender for expressions of interest for this position and received responses. However, allegedly due to political reasons, the KTA never made the required recommendation to the Special Chamber and the procedure is in limbo.
The Chamber has since received requests for the removal of enterprises from the effect of the moratorium. In SCC 07-0059 decided on the 22 nd February 2008 KTA filed an application for the sale of one of the enterprises, Famipa, one of the enterprises included in the Trepca list and affected by the moratorium decision which request was rejected as the KTA did not comply with various orders by the Judge Rapporteur (SCR-05-001). KTA filed a new Application for the Approval of the Sale of Land Assets of SOE Famipa, on 30 May 2007
Due to uncertainty in the application of section 43 of UNMIK regulation 2005/48 the Chamber has requested the SRSG to provide an official clarification of the law on the 19th October 2006. The Chamber has received no clarification so far and the Moratorium decision remains in force until further decision of the Chamber.
In SCC 07-0059 a Claimant requested the award of damages against the KTA on the basis that the KTA did not complete the tendering process in the spin off of Newco Famipa after he had already been declared the winning bidder. On 22 February 2008 the Special Chamber accepted the claim as grounded and obliged KTA to compensate the Claimant with € 59,807.04 for damages and € 780 for court costs.
KTA asked for a review of this decision in SCA-08-0051. The request was rejected.
5 Calling into the suit
The Chamber has infrequently called third parties into the suit in normal Claims but has frequently called the KTA into suits where the Chamber felt that the KTA should defend such suits. In many referral cases involving property issues the Chamber calls the KTA into the suit before referring the case.
During 2007 and the first part of 2008 the Chamber retained the jurisdiction to call the KTA into the suit if requested to do so by the Municipal or District Economic Court to which the Claim had been referred. The Chamber practice now tends towards including the KTA as a party ab initio.
UNMIK Administrative Direction 2006/17 introduced the notion of reviews of Special Chamber judgments and decisions. It reads as follows:
“A judgment or decision made by a panel of judges may also be reviewed by the Special Chamber if a party applies for such review….”
The wording is generic but the Chamber has made it clear that the remedy here is a review and not an appeal. The Chamber has adopted the following language in the obiter dictum of all decisions and judgments rendered by a panel of the Chamber which is not composed of all the judges.
“A party may, in the event of the discovery of a fact which might by its nature have a decisive influence on the outcome of the dispute concerned, and which. When the decision was taken was unknown to the Special Chamber and could not reasonably have been known to the parties, request the Special Chamber to revise its decision within one month from such decision.”
The Chamber has accordingly interpreted the notion of “new facts” very strictly and many reviews have been rejected on the basis of lack of new evidence.
Rejection of review requests include:
However In a number of cases the review request has been admitted.
In SCA-08-0024 and SCA-08-0025 the Chamber accepted the review and ordered a retrial on evidence that the prescriptive period had been interrupted by a letter which had not been previously produced.
IN SCA-08-0044 the Chamber accepted the review as it had not , in the original judgment, determined correctly the status of a particular SOE, some of whose branches were in liquidation and others not.
Recently the Chamber is omitting the mention of the possibility of review in the enacting Clauses of Decisions and Judgments.
7 Protection of legality.
The Chamber has had a very small number of requests by the Public Prosecutor of Kosovo for the so-called protection of legality.
Article 401 of the Law on Contested Procedure provides that the Public prosecutor may apply for order of certiorari against a final court’s decision within three months from the relative decision…
Article 383 provides that the application for order of certiorari is not allowed against a decision made upon a review or application for order of certiorari by the court which is competent to decide on such legal remedies .
Although Article 402 of the Law states that the court described in article 383 of this code shall decide on application for order of certiorari, obviously there is no mention of the Special Chamber, but the Chamber has accepted to handle such requests in matters within its jurisdiction.
In one request for protection of legality the request was incorrectly filed by a Complainant ( instead of by the Public Prosecutor) in an SCEL case ( employees’ entitlement, mentioned later in this document) where the complainant Eshref Ibrahimi filed a request for protection of legality related to the decision SCEL-06-018 decided on the re the SOE Vushtex.
He stated that he was a permanent resident of South-Eastern Kosovo (this part in fact is within boundaries of Southern Serbia, but Albanians refer to as South-Eastern Kosovo because it has been such until 1912). Since this part is governed by the Serbian Government, the time limit for submission of the complaint against KTA could not be met, because of the extraordinary circumstances. He alleged that until June 2006, daily newspapers from Kosovo did not reach Presheva, the city in which he lives. He also alleged that obstacles existed at the administrative zone between Kosovo and Serbia where the Serbian policies prohibited access to the Albanian press and thus he missed the information for submission of the complaint on time.
The Chamber rejected the request since it was not filed in accordance with the law.
In another case, SCPL–07-0001 decided on the 17th December 2007, the Klinë/Klina Municipality had a Court case before the Municipal Courts against the SOE Forest Economy, Klina and the Kosovo Trust Agency.
The Public Prosecutor of Kosovo applied to the Special Chamber for protection of legality against the Klinë/Klina Municipal Court’s decision on the basis of lack of jurisdiction of the Municipal Court, since the respondent was a Socially Owned Enterprise. Considering the fact that the Municipal Court’s decision had become final the Special Chamber accepted the claim for protection of legality. The Chamber quashed the Municipal Court decision, removed the case from the Municipal Court and assumed jurisdiction over the case.
The Municipal Court in Klinë/Klina had issued a decision approving the cadastral parcel exchange between the two parties, based on their consent, without opposition from the respondent. This judgment was quashed by this Chamber on the basis that a valid exchange contract did not exist between the parties. The Chamber held that in the absence of a written contract clearly a verbal agreement to exchange immovable property is not valid at law. Apart from dispositions applicable to Socially owned property, the Law on Obligations provides in Article 455 that “ A contract on the sale of real estate has to be concluded in writing under threat of nullity”. The Law on Transfer of Real property ( Official Gazette of Kosovo No 45/81 and 29/86) also provides for the verification of the signatures on such a contract by the appropriate Court. An exchange is under general principle of law equivalent to two contracts of sale and therefore the above provisions apply to the case under review
The Chamber examined the legal position of such transfers as subject to the approval of the KTA and finally concluded that the Court cannot authorize such an exchange since no valid exchange agreement was entered into prior to the applicability of the present procedures, and no applicable procedure had been followed in accordance with the applicable regulations.
The Claim of the Claimant was therefore rejected as ungrounded.
8 Employees’ rights to 20% of the proceeds from privatization.
Section 10 of UNMIK Regulation 2003/13 On the Transformation of the Right of Use to Socially-Owned Immovable Property recognizes the “special status” of employees of Socially-Owned Enterprises and the impact of privatization on their status. It confers on employees, subject to their meeting certain conditions, an entitlement to a share from the proceeds of the privatization. Section 10.1, entitles the employees to a 20% share of the proceeds from the privatization. In order to be deemed eligible for a share in terms of Section 10.4 the employee must have been employed with the Enterprise at the time of the privatization and have been on the payroll of the enterprise for not less than three years.
Sections 10.2 and 10.3 of the Regulation set out the procedure to be followed by the Kosovo Trust Agency when establishing a list of eligible employees. Initially, the representative body of employees in the Enterprise concerned, in cooperation with the Federation of Independent Trade Unions of Kosovo, is required to formulate, on a non-discriminatory basis, a list of eligible employees and thereafter to submit this list to the Respondent. The latter then has a statutory obligation to review this list and to make any adjustments that are necessary in order to ensure equitable access by all eligible employees to the funds to be distributed. Thereafter the official list is published together with a notice informing any aggrieved party of the right to file a complaint challenging it before the Special Chamber.
Typically in these cases, the legal representatives of the employees addresses three different issues in the complaint: he requests the inclusion by the Kosovo Trust Agency of the complainants in the list of eligible employees; he contests the published list on the basis that the employees included in it did not possess the requirement for eligibility (and ,typically because it contains only names of Albanian employees, excluding the non-Albanian ones, although some were long term employees of the Enterprise) and there is a request for the Chamber to oblige the Respondent to pay the professional fees for the Attorney.
The Chamber has dealt with a number of these cases which involve a certain amount of detailed investigation into specific circumstances. The Chamber has commented as follows on the relevant procedure:
“In recognition of the principles of equity and fairness and of the particular circumstances in which privatization is taking place in Kosovo, Section 10.2 expressly prohibits the distribution of funds to employees on a discriminatory basis and sets out procedures to ensure distribution on an equitable basis. In this regard, those entrusted with responsibility for formulating the list of employees are expressly required to establish such list on a non-discriminatory basis. Section 10.2 obliges the Respondent to review this list for the purposes of ensuring equitable access by all eligible employees to the funds to be distributed. The requirement for the list and the notice of the right of complaint to be published in both Albanian and Serbian is also designed to ensure fairness of procedures. The most far-reaching provisions concerning the prohibition on discrimination are contained in Sections 10.4 and 10.6 of UNMIK Regulation 2003/13. Section 10.4 while setting down the criteria which an employee must meet in order to be deemed eligible for inclusion in the list, expressly prescribes that failure to meet such criteria is not a bar to inclusion once it can be proved that the employee would have been eligible for inclusion in the list if she/he had not been subjected to discrimination. Additionally, Section 10.6 makes specific provision for the filing of complaints before the Court on grounds of discrimination”
In SCEL-05-004 ( Coca Cola, Lipjan) decided on the the Chamber heard evidence regarding the circumstances of the SOE at the relevant moment in time.
The Chamber , in its judgment, quotes from a hearing of evidence:
“Jovica Filipovic, former manager of the Enterprise, testified on 15 June, 20 July and again on 24 August 2005. He stated that he worked with the Enterprise up to June 1999 and after KFOR entered Kosovo, he went to the plant in the attempt to enter and resume his activities, but was stopped at the entrance gate by KFOR Officers. On that occasion, at the gate of the Enterprise there were both Serbian and Albanian employees. No incidents occurred between the two groups of employees. The two groups appointed their representatives in order to hold a negotiation with KFOR on the possible resumption of work at the plant. The negotiation was conducted in a fair manner. Mr. Filipovic was representing Serbian employees during 2 or 3 negotiation sessions, which resulted in a postponement of the reopening of the plant and with the promise that the representatives of the employees would have been informed when the situation allowed the employees to return to work. Neither Mr. Filipovic nor any of the Serbian employees were ever called to go back to work, while Albanian employees did return to work. According to the witness, KFOR did not allow Serbian employees to return to work, because the situation was very tense and there had been several serious security incidents. As a consequence, Serbs living in the area were afraid and could not move freely and safely.”
The KTA submitted payrolls, matrix books, and certificates of employment for the employees whose names appeared in the published list of eligible employees, in order to prove that the said employees were employed with the SOE at the time of privatization and that they had complied with the conditions set out in Article 10.4 of UNMIK Regulation 2003/13 for inclusion in the list of eligible employees.
The Chamber decided not to apply the provisions of Section 10.6 of UNMIK Regulation 2003/13,
“It is the established practice of the Chamber, while examining whether the Complainants had been subject to discrimination, to consider not only documentary evidence as required by Section 10.6 of UNMIK Regulation 2003/13, but all evidence in the proceeding. See SCEL 04-001, Vahdet Kollari in re Thermosystem v KTA (2004). The restriction to only documentary evidence is discriminatory in itself in the light of the jurisprudence of the European Court of Human Rights under Article 14 of the European Convention of Human Rights. Further, the requirement that the complaint must be accompanied by documentary evidence is a virtual impossibility, and if applied as written would be a further discrimination.”
Thus, in the opinion of the Chamber, Section 10.6 cannot be applied as written. Additionally, Article 221, paragraph 4 of the Law on Contested Procedure states: “Facts that are a matter of common knowledge need not be proved”.
The Chamber also quoted Article 8 of the Anti-Discrimination Law No. 2004/3 ( and UNMIK Regulation 2004/32, on Burden of proof :
“8.1. When persons who consider themselves wronged because the principle of equal treatment has not been applied to them establish, before a court or other competent authority, facts from which it may be presumed that there has been direct or indirect discrimination, it shall be for the respondent to prove that there has been no breach of the principle of equal treatment.”
On 28 November 2005 the Special Chamber requested the Special Representative of the Secretary-General (SRSG) to clarify whether UNMIK Regulation 2004/32 supersedes conflicting provisions of UNMIK Regulation 2003/13. On 11 January 2006, the SRSG answered in the affirmative.
The Chamber then referred to matters of common knowledge:
“Two different circumstances prevail in Kosovo. Most people live in a relatively secure single ethnic community and are able to travel freely to and from their work. They are not subject to discrimination. But some live in enclaves of minority ethnicity and are unable to travel freely to work in communities dominated by the other ethnicity.
This division of Kosovo society along ethnic lines …….. is sufficiently proven by well-known facts as well as the testimony of witnesses in this case .Before 1999, employees were, to a great extent, able to attend work without interruption. However, after the divisive conflict and the international intervention in 1999, people were mostly unable to safely travel to within Kosovo. The effect is that employees living in a different circumstance (belonging to minority groups, living in segregation from the Albanian majority) were deprived of the opportunity to attend work without affirmative assistance of the governing body.
It is noted that in June 1999, after the NATO bombings, the Serbian security forces left Kosovo while KFOR and subsequently UNMIK took over in the attempt to re-establish law and order in the province. It is well known that in the days and months that followed, many inhabitants of Kosovo, mainly Serbs and other ethnic minorities had to leave their homes and workplaces due to fears that they and their families would be subjected to reprisals. These facts constitute a matter of historical record and have been documented by NGOs, the Organisation for Security and Cooperation in Europe (hereinafter referred to as “the OSCE”) and human rights experts alike.
The outflow of the Kosovo Serb population from Lipjan/Lipljan town has been constant since 1999. This urban population gravitated towards those usually mono-ethnic villages. Although the population figures following the March 2004 riots vary, around 9,800 Kosovo Serbs are estimated to reside within the municipality. At that time, approximately 268 Kosovo Serbs were displaced from their homes in Lipjan/Lipljan town, mostly to the Kosovo Serbian villages and in Lipjan/Lipljan town around the Orthodox church.”
In the circumstances the Court considered that the complainants’ failure to present themselves for work from June 1999 onwards was not in any way attributable to a desire on their part to be voluntarily absent from work, but was due to the security situation in which they found themselves. Neither could they have been expected to comply with the warning notice of the Enterprises informing them that their absence from work for more than five days would result in their being struck off the register of employees.
The Chamber then examined the case of each employee in detail and decided upon their eligibility or otherwise to participate in the 20% of the proceeds from privatization. The lawyers of the Complainants had also challenged the inclusion of some names on the published list. The Chamber dismissed this challenge as the lawyers of the complainants had not presented any relevant evidence to prove their allegations.
In SCEL-05-008 ( SOE Silosi) decided on the a number of individual complainants contested the legality of the published list. They also presented facts from which it could be presumed that there had been direct or indirect discrimination. Complainants were persons of various ethnicities whose employment was terminated in 1999 or who fled during the 1999 war, and were unable to return to work after the war in time to resume employment. A number of employees left employment during the war for a variety of reasons for example, their houses were destroyed, they were forced to evacuate, or they fled for fear of harm to their families.
The Chamber carried out the necessary evaluation. Some points of relevance may be mentioned. Two Complainants made claims on behalf of deceased relatives i.e. employees’ relatives and asserted that the deaths were a result of discrimination because they were killed as part of ethnic conflict. The argument these complaints presented was that had it not been for the ethnic killing they would have qualified and that “they would have been so registered and employed, had they not been subjected to discrimination”.
“The Chamber heard facts from which it can be presumed that these deceased persons were victims of ethnic killings victims of ethnic killings. . In the case of Mavric Mladjan , he was abducted on the 12 th October 1999 and his body was found and identified in November 2003. The Complainant also exhibited a “tracing report” filed with the International Red Cross in November 1999. In the case of Saveljic Dobrivoje there is a report from the Serbian ministry of the Interior which confirms that Saviljevic was abducted in Orahovac on the 27 th February 1999 and a criminal report was lodged about this abduction but the perpetrators have never been identified. The Court regards the ethnic killings as the most severe form of discrimination. The burden of disproving the allegations of death relating to discriminatory reasons rests on the KTA. KTA did not adduce any evidence to this effect. Therefore the above legal inheritors of the victims of ethnic cleansing are entitled to receive 20% of the proceeds from privatization.”
Other complainants whose deaths were unrelated to discriminatory reasons did not qualify for inclusion in the list of eligible employees. Most died of natural causes at various dates unrelated to any claim of discrimination. Also excluded were complainants who retired or reached the age of retirement before the date of privatization. Kosovo Law requires mandatory retirement at the age of 65.
Other Complainants were in a position where the Chamber was not be able to decide their Complaint until a competent Court in Kosovo took a final decision on whether their dismissal from the enterprise for disciplinary reasons was justified or otherwise. In these cases the Chamber suspended a decision in their case and they filed a specific request for final decision when their cases were concluded by the Municipal Courts.
In SCEL 05-0013 ( SOE UTVA) decided on the , the Chamber also examined a large number of complaints and confirmed principles established by the Chamber in other decisions. The Chamber declared the published list as invalid.
In this case a number of complainants made specific allegations regarding employees whose name had been included in the published list. It transpired that the KTA had taken arbitrary criteria , established by the local Trade Unions when establishing the list and that the KTA had not reviewed the list.
The Trade Union decision, adopted by the KTA, established three criteria based on which the lists of eligible employees were compiled. The first criterion was that the date 31.12.1989 would be taken as a date when a discrimination against Albanians commenced . The second criterion established that any non-Serb whose employment was terminated based on any form of discrimination would have his working experience recognized until the date of privatization. The third criterion was that any Serb whose employment was terminated up to the 24 March 1999 would be deemed to have quit voluntarily and not as a result of discrimination and should be excluded from the list of eligible employees.
Based on the aforementioned criteria, the SOE drafted two lists for the KTA. The first list, based on the matrix of the SOE included 296 employees. The second list included the names of another 206 employees who were deemed not to meet the legal requirements.
The Chamber heard various witnesses including the president of the Trade Union of the Metal Workers Kosovo who confirmed how the list was compiled . He confirmed that the year 1989 was taken as the time when the discrimination started since in that year 500 employees were discharged from work based on discrimination. Further he stated that after June 1999, the SOE did not operate because Italian KFOR was located in the premises of the factory. Due to such situation, the employees of the SOE found it impossible to resume employment.
At the end of the collection of evidence the Chamber evaluated the manner in which the KTA had compiled the list of eligible employees. The Chamber concluded that the KTA had used incorrect criteria in compiling the list, basing itself on an SOE matrix of employees which had not been updated and without taking into account the workbooks of the employees. The Chamber further established that the list included the names of persons who were deceased, and of others who had terminated their employment voluntarily. Consequently the Chamber established that the compilation of the list was not according to law.
Further, the Respondent KTA did not review the list of eligible employees, nor did it make any adjustment prior to or and after the publication of the list although it had become clear that criteria regarding the inclusion of the employees in the list were in violation of the law. This showed a serious failure of the Respondent to comply with the procedure as prescribed by law. The entire procedure in compiling the list rendered the published list invalid.
Additionally the Chamber noted that in all cases that had been considered to date by the Chamber KTA had admitted that it did not review the published lists prior to publication. The Chamber had repeatedly drawn the attention of the KTA to the fact that this constitutes an irregularity .
The Chamber declared the published list as invalid and the kTA was instructed to repeat the whole exercise.
It must be pointed out that the KTA is now obliged by law to carry out a meaningful review of the employees’ list prior to publication.
GODWIN MUSCAT AZZOPARDI