Article 1243 of the Civil Code of the Republic of Armenia establishes the right of the creditor to present claims to the heir or executor of the will within six months from the date of the opening of the inheritance in the event of the debtor's death, and in the absence of these persons, to the notary at the place of opening of the inheritance.It is noteworthy that the current legislation does not provide for the possibility of considering the failure to meet the legally established deadline for creditors to present claims to the heirs of the debtor as valid or for restoring the deadline.
Citing the likelihood of not being objectively informed about the debtor's death and thus missing the legally established six-month deadline, Araratbank CJSC and the first instance general jurisdiction court of Yerevan raised the question of the compliance of the aforementioned legal regulation with Article 60 of the Constitution of the Republic of Armenia in the Constitutional Court.
The applicant bank specifically noted that in many cases, heirs, taking advantage of the legislative gap, conceal the fact of the debtor's death from creditors, and until the expiration of the legally established six-month deadline, they make regular payments aimed at repaying the debt on behalf of the deceased. According to the applicant, the heirs neutralize the likelihood of creditors being informed about the fact of the deceased's death, and after the expiration of the six-month deadline, taking advantage of the gap in the law, refuse to fulfill the remaining obligations.
The applicant believes that the absence of relevant procedures for considering the failure to meet the legally established deadline for creditors to present claims to the heirs of the debtor does not ensure the realization and protection of the creditors' property rights.
The bank argues that Article 1243 of the Civil Code, insofar as it does not regulate the possibility of restoring the missed deadline for creditors to present claims, contradicts Articles 28, 29, and 60 of the Constitution.
The first instance general jurisdiction court of Yerevan, in turn, expressed the position that in all cases where there is no evidence to prove that the creditor was informed of the debtor's death and, consequently, about the opening of the inheritance, the start of the six-month deadline provided for in the first part of Article 1243 of the Civil Code should be considered to begin from the day the creditor became aware of the opening of the inheritance. The Constitutional Court noted that civil legislation does not impose an obligation on heirs to inform creditors about the opening of the inheritance. An heir may not know about the debts of the deceased for various objective reasons, or may know about the debts of the deceased but for some reasons not inform (including having malicious intent) about the opening of the inheritance.
The Constitutional Court finds that the risk of damage resulting from the acceptance of the inheritance by the debtor's heirs in the examined "debtor-creditor" legal relations pertains to the creditors, and therefore they, as interested parties, should exhibit appropriate behavior. The law does not prohibit the creditor from independently obtaining information about the debtor at certain intervals, and the debtor's failure to fulfill obligations should prompt the creditor to take active measures, and creditors' claims can be presented and satisfied in the presence of sufficient means and without missing the established deadline, both in the case of the heirs accepting the inheritance and in the case of not accepting the inheritance; even in the absence of heirs, creditors can claim the debts owed to them.
The Constitutional Court also emphasized that when entering into any loan or borrowing agreement, the parties agree on the frequency of loan repayment, and as a rule, a certain periodicity of repayment is established. If obligations arising from the contract are not fulfilled on time, even once, the organization providing the loan or borrowing should take measures to find out the reasons, as one of the reasons may also be the death of the borrower or the debtor. The procedure for communication between the parties is regulated by the loan or borrowing agreement, and primarily it is in the interest of the creditor or lender to establish that procedure by contract.
And since issues related to loan agreements fall under the jurisdiction of the Central Bank, it can establish through its normative legal acts a communication procedure or minimum requirements between the parties that ensure the timely and proper protection of the property rights of the creditor or lender in the event of the death of the borrower or debtor.
The Constitutional Court emphasized that based on the principle of freedom of contract provided for in Article 437 of the Civil Code, the parties to a loan or borrowing agreement may, by mutual agreement, establish provisions regarding the communication procedure aimed at timely informing about the death of the borrower or debtor, and thus timely protecting the interests of the creditor or lender.
Thus, the Constitutional Court concluded in its decision SDO-1495 that Article 1243 of the Civil Code of the Republic of Armenia is in accordance with the Constitution.
It is noteworthy that the current legislation does not provide for the possibility of considering the failure to meet the legally established deadline for creditors to present claims to the heirs of the debtor as valid or for restoring the deadline.
Citing the likelihood of not being objectively informed about the debtor's death and thus missing the legally established six-month deadline, Araratbank CJSC and the first instance general jurisdiction court of Yerevan raised the question of the compliance of the aforementioned legal regulation with Article 60 of the Constitution of the Republic of Armenia in the Constitutional Court.
The applicant bank specifically noted that in many cases, heirs, taking advantage of the legislative gap, conceal the fact of the debtor's death from creditors, and until the expiration of the legally established six-month deadline, they make regular payments aimed at repaying the debt on behalf of the deceased. According to the applicant, the heirs neutralize the likelihood of creditors being informed about the fact of the deceased's death, and after the expiration of the six-month deadline, taking advantage of the gap in the law, refuse to fulfill the remaining obligations.
The applicant believes that the absence of relevant procedures for considering the failure to meet the legally established deadline for creditors to present claims to the heirs of the debtor does not ensure the realization and protection of the creditors' property rights.
The bank argues that Article 1243 of the Civil Code, insofar as it does not regulate the possibility of restoring the missed deadline for creditors to present claims, contradicts Articles 28, 29, and 60 of the Constitution.
The first instance general jurisdiction court of Yerevan, in turn, expressed the position that in all cases where there is no evidence to prove that the creditor was informed of the debtor's death and, consequently, about the opening of the inheritance, the start of the six-month deadline provided for in the first part of Article 1243 of the Civil Code should be considered to begin from the day the creditor became aware of the opening of the inheritance. The Constitutional Court noted that civil legislation does not impose an obligation on heirs to inform creditors about the opening of the inheritance. An heir may not know about the debts of the deceased for various objective reasons, or may know about the debts of the deceased but for some reasons not inform (including having malicious intent) about the opening of the inheritance.
The Constitutional Court finds that the risk of damage resulting from the acceptance of the inheritance by the debtor's heirs in the examined "debtor-creditor" legal relations pertains to the creditors, and therefore they, as interested parties, should exhibit appropriate behavior. The law does not prohibit the creditor from independently obtaining information about the debtor at certain intervals, and the debtor's failure to fulfill obligations should prompt the creditor to take active measures, and creditors' claims can be presented and satisfied in the presence of sufficient means and without missing the established deadline, both in the case of the heirs accepting the inheritance and in the case of not accepting the inheritance; even in the absence of heirs, creditors can claim the debts owed to them.
The Constitutional Court also emphasized that when entering into any loan or borrowing agreement, the parties agree on the frequency of loan repayment, and as a rule, a certain periodicity of repayment is established. If obligations arising from the contract are not fulfilled on time, even once, the organization providing the loan or borrowing should take measures to find out the reasons, as one of the reasons may also be the death of the borrower or the debtor. The procedure for communication between the parties is regulated by the loan or borrowing agreement, and primarily it is in the interest of the creditor or lender to establish that procedure by contract.
And since issues related to loan agreements fall under the jurisdiction of the Central Bank, it can establish through its normative legal acts a communication procedure or minimum requirements between the parties that ensure the timely and proper protection of the property rights of the creditor or lender in the event of the death of the borrower or debtor.
The Constitutional Court emphasized that based on the principle of freedom of contract provided for in Article 437 of the Civil Code, the parties to a loan or borrowing agreement may, by mutual agreement, establish provisions regarding the communication procedure aimed at timely informing about the death of the borrower or debtor, and thus timely protecting the interests of the creditor or lender.
Thus, the Constitutional Court concluded in its decision SDO-1495 that Article 1243 of the Civil Code of the Republic of Armenia is in accordance with the Constitution.