ARM-1999-1-001

a) Armenia / b) Constitutional Court / c)  / d) 27-01-1999 / e) DCC-152 / f) On the conformity of Article 24 of the Law on telecommunications of the Republic of Armenia with the Constitution of the Republic of Armenia / g) Tegekagir (Official Gazette) / h) CODICES (English).

Keywords of the Systematic Thesaurus:

Keywords of the alphabetical index:

Competition, protection / Monopoly, state / Legislation, anti-trust.

Headnotes:

Free economic competition does not exclude activities which are prohibited by the State, activities which are subject to State licensing or activities which are natural or state monopolies and have as their purpose to provide security or lawful interests of the State and society, public order, health and morality, or rights and freedoms of other persons.

However, clarification of these spheres and possible restrictions of the degree of free economic competition are regulated by the Constitution and by law.

The legislative authority alone is competent to determine the limits and nature of these restrictions.

Summary:

The applicants, a group of 72 deputies of the National Assembly of the Republic of Armenia, claimed that Article 24 of the Law on telecommunications of the Republic of Armenia was not in conformity with the Constitution of the Republic of Armenia, in particular, with the provisions on the State-guaranteed freedom of economic activity and free economic competition contained in [ENG-ARM-A-8] Article 8 of the Constitution.

The respondent party argued that the disputed provision of the law did not contradict the Constitution, since it concerned a natural monopoly and the restrictions on free economic activity in the sphere of telecommunications are intended to improve the communication situation on the territory of the Republic and to ensure technical advancement in this field.

Legal analysis of the provision of Article 24 of the law shows that the legislator has not established a compulsory regulation adjusting legal relations, but that in fact, by ratifying the license terms established by the executive authority for a particular legal entity, lent those regulations the force of law.

Article 24 of the Law on telecommunications of the Republic of Armenia states that "The effect of rights established by the said license must be ensured by the legislation of the Republic of Armenia (including the antitrust legislation)". Anti-trust legislation was totally absent at the moment of adopting this Law. By adopting such legislation the legislator, while lending the legal regulation the features proper to a constitutional norm, had actually anticipated the concept of laws to be adopted for regulating this sphere.

According to [ENG-ARM-A-62] Article 62.3 of the Constitution, the powers of the legislative body are established by the Constitution, which has not granted the National Assembly of the Republic of Armenia the competence to adopt organic (constitutional) laws containing regulations of a constitutional nature.

Moreover, according to [ENG-ARM-A-5] Article 5.2 of the Constitution, State bodies and officials are only competent to perform actions which the legislature entitles them to carry out. The National Assembly of the Republic of Armenia has given the force of law to regulations which the Government or the body empowered by the latter were not authorised to enact.

It was also underlined that according to [ENG-ARM-A-8] Article 8.3 of the Constitution, the State guarantees free development and equal legal protection to all forms of property, freedom of economic activity and free economic competition. Moreover, according to [ENG-ARM-A-4] Article 4 of the Constitution, the State ensures the protection of human rights and freedoms on the basis of the Constitution and laws, pursuant to the principles and norms of international law. Freedom of economic activity is not an absolute freedom; it can be restricted according to the norms and principles of international law. The type of restriction must however, be substantiated by the legislator, with due consideration given to the fact that it is possible only for ensuring the relevant recognition and respect of rights and freedoms of other persons and for satisfying the rightful requirements of morality, public order and common welfare in a democratic society ([ENG-UNO-A-29] Article 29.2 of the Universal Declaration of Human Rights; [ENG-UNO-B-12] Article 12.3 of the International Covenant on Civil and Political Rights).

Meanwhile, an analysis of the provisions of the Constitution shows that free economic competition does not exclude activities which are prohibited by the State, subject to State licensing, or activities which are natural or State monopolies or are regulated by exclusive rights and intended to provide for the security or lawful interests of the State and society, public order, health and morality, or rights and freedoms of other persons.

However, clarification of what these spheres are and what are the possible restrictions of the degrees of freedom of economic activities or of free economic competition are regulated by the Constitution and by the laws for implementing the antitrust policies ensuring even-handed competition and economic and social advancement.

The legislative authority alone is competent to determine the limits and nature of these restrictions in the form of regulations. Where individual legal relations are not yet regulated by Law, the Government can provide amendments not only on the basis of legislative initiative, but also based upon [ENG-ARM-A-78] Article 78 of the Constitution, whereby for the purpose of legislative support of the Government activity program, the National Assembly can authorise the Government to adopt resolutions that have the effect of law which are in force within the period established by the National Assembly. These resolutions cannot be contrary to laws.

Thus, the Constitutional Court of the Republic of Armenia ruled that Article 24 of the Law on telecommunications is not in conformity with the requirements of  [ENG-ARM-A-5] Articles 5 and  [ENG-ARM-A-8] 8 of the Constitution. Clarification of the types of activities subject to State licensing, whether an activity is a State or natural monopoly, implementation in these spheres of the antitrust policies, security and the lawful interests of the State and society, the purposes of protecting the rights and freedoms of other persons, the possible limitations of the degrees of freedom of economic activities and free economic competition as the norm of compulsory behaviour had been previously established by the executive authority rather than by the law. The legislator, in the form of transitional provisions, gave the force of law to provisions targeted at a particular legal entity, and these provisions contained formulations which were not in conformity with the Constitution.

Languages:

Armenian, Russian, English (translation by the Court)