The Constitutional Court satisfies SIA Hiponia constitutional petition

On 28 November 2014 the Constitutional Court announced its judgment in the case and held that Article 495(1) of the Civil Procedure Law does not comply with Article 92 of Satversme to the extent the aforesaid provision prevents a party from contesting the competence of the arbitral tribunal at court. The Constitutional Court also held that Article 24(1) of the Arbitration Law to take effect as from 1 January 2015 is not compliant with Article 92 of Satversme to the extent the aforesaid provision prevents a party from contesting the competence of the arbitral tribunal at court.

The judgment puts an end to the situation where a party which contests the existence or validity of the arbitration agreement is prevented from having this issue decided by the court. From now on, a party in such situation will no longer be forced to accept the decision of the arbitral tribunal that it has jurisdiction over the matter but will have an option to apply to the court for a de novo review of this issue.

The case was opened upon the constitutional petition of SIA Hiponia (former name SIA Hipotēku bankas nekustamā īpašuma aģentūra). COBALT provided legal assistance in the case and represented SIA Hiponia at the Constitutional Court.