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universul juridic magazin

Law regarding “the giving in payment” – a critical analysis of certain elements of (un)constitutionality and (un) conventionality

Law no. 77/2016 regarding the giving in payment of immovable property for the purpose of settling loan obligations taken on under loans is incontestably considered as one of the most controversial or even the most controversial normative act regulating the private law relationships developed in Romania over the past decades. This rating is acknowledged by the wave of public admonestation unleashed with the proposal and enactment of the law; the banking professionals, especially those concerned (to be read “injured”) by the immediate effects of the adoption of this normative act and certain legal practitioners lodged a lot of practical/ economic objections, criticizing without mincing words the principle provisions comprised by the respective act, from the perspective of infringements of certain fundamental rights, as well as of the private ownership right, economic freedom and the freedom of contract, respectively. The vivacious dispute inevitably poached, even before the entry into force of the Law, the academic environment where the topic was approached from a multidimensional perspective and yet, in a great measure disapproving. The difficulties of accepting the new rules seem to be firstly determined by the proximity of their understanding, in a context where the simple classification of the completely unusual relationships to which they give rise, into a natural legal “bed” represents at least a problematic responsibility. The mechanism of Law, which confers to certain categories of debtors acting as parties to bank loan agreements, the right to fully relieve of the debt taken on by the simple remittance of the asset subject to the accessory right of mortgage, irrespective of the consent or despite the explicit refusal of the creditor in this respect, obviously draws away from the civil law institutions settled out in the domestic laws over time, combining and altering the effects of several methods of transformation and settlement of the obligations, and hence, overcomes some principles of law which have generally been considered as immutable so far, such as the principle of consensualism – pacta sunt servanda – and the principle of due performance of obligations, arising from the first principle. The provisions of Law no. 77/2016 were (especially) reprobated for the disagreement with the constitutional and conventional rules establishing the rule of non-retroactive effect of the new law, which represents the corollary of the legal stability – an indispensable element of the rule of law, due to the fact that it applies both to ongoing loan agreements upon its entry into force, and to those agreements concluded after that date –, as well as with those protecting the fundamental ownership right and the persons’ economic freedom, in relation to whom it is stated that the special provisions establish an incontestable interference, however, which is not sufficiently justified and is disproportionate to the aim pursued by the legislator. Based on these ardent disputes, this study aims to provide an examination of the normative act referred to, in the light of the (in)consistency of its provisions with the constitutional and conventional principles, as they were construed and applied in the practice of the contentious constitutional court in Romania, respectively of the European Court of Human Rights. The main issues assumed to be explored are (i) the sentence of non-retroactive effect of Law no. 77/2016, considering its modus operandi and the effects which it produces, respectively (ii) the issue of infringement of the private ownership right and of the freedom of contract, with an indispensable preliminary introspection of the legal nature, of the content, mechanism and effects of exercising the right given to the consumer debtors within the specially examined normative background.