At a session held on the 10th of January 2024, the Constitutional Court decided not to accept the initiatives to annul the amendments to the Law on Obligations and the Law on Enforcement, which were published in the Official Gazette of the Republic of North Macedonia No. 154 dated 20th July 2023 and entered into force on the day of publication in the Official Gazette.
According to the Constitutional Court, the procedure for the legislative amendments to the Law on Obligations and the Law on Enforcement was not conducted, because the Court considers that both laws are in accordance with the Constitution. This means that the claims of the 15 initiators, who submitted initiatives on this matter to the Constitutional Court, were not accepted.
This implies that all provisions of the amendments to the Law on Obligations remain in legal circulation, including Article 1, which supplemented Article 266-a with a new paragraph 8, which provides: “When the amount of the accrued and punitive interest reaches the amount of the principal, the interest ceases to accrue.”. This legal provision is also incorporated in the Law Amending and Supplementing the Law on Enforcement, where it is stipulated that in Article 18, paragraph (1), the words are added: “or until the unpaid interest reaches the amount of the principal debt.”
According to the Constitutional Court, it is unacceptable to claim in the initiatives that the property rights of the creditors are being violated by the fact that the legislator, that is, the Parliament, has foreseen to limit the amount of penal interest when it reaches the amount of the principal debt.
According to the Constitutional Court, the assertion in the initiatives that the debtor is placed in a privileged position compared to the creditor is unacceptable, as Article 1 does not define to whom it applies, but, on the contrary, it clearly and precisely implies that it applies equally to all market participants.
Furthermore, according to the Constitutional Court, in accordance with the Constitution, Article 2 of the Law Amending and Supplementing the Law on Obligations is also valid. This article provides for an amendment to Article 368 of the Law on Obligations regarding the statute of limitations of claims, and the amended article states:
“(1) All claims established by a final court decision or by a decision of another competent authority or by a settlement before a court or another competent authority, expire after five years from the moment of their enforceability, as well as claims for which a shorter statute of limitations is provided for by law.
(2) All periodic claims arising from decisions or settlements provided for in paragraph (1) of this article and reaching into the future, expire within the time limit provided for the statute of limitations of periodic claims.
(3) The statute of limitations of a final court decision or by a decision of another competent authority, or by a settlement before a court or another competent authority, is interrupted by filing an application for enforcement before the competent enforcement officer, after which the statute of limitations starts running again, lasting ten years from the moment of filing the application for enforcement in the enforcement proceedings.”
Regarding Article 4 of the enacted Law Amending and Supplementing the Law on Obligations, which has caused the greatest controversy and contradiction, and which provides that “Ongoing proceedings for the collection of claims provided for in Article 2 of this Law will be completed in accordance with this Law,” the court considers that this article does not have retroactive effect, meaning it does not apply retroactively, as it relates to proceedings that are still ongoing and not concluded, rather than those proceedings that concluded before the law came into force.