The Constitutional Court of the Republic of Belarus, comprising of the Presiding Officer - Chairman of the Constitutional Court G.A. Vasilevich, judges T.S. Boiko, K.I. Kenik, V.V. Podgrusha, A.A. Sarkisova, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, V.Z. Shuklin, has examined on the grounds of Article 40 and part one of Article 116 of the Constitution of the Republic of Belarus complaints of citizens on reduction by banks unilaterally of rates of interest under the contracts of bank deposit.

     Having analyzed the relevant provisions of the Constitution, Civil Code and Banking Code of the Republic of Belarus, international legal acts, the Constitutional Court found the following.

     Contract of bank deposit shall be specified by Article 773 of the Civil Code of the Republic of Belarus (hereafter also referred to as CC) as the contract under which one party (recipient of deposit) shall take from another party (depositor) a sum of money (deposit) and is bound to return the depositor the deposit, as well as interests charges on the deposit under the conditions and procedure envisaged by the contract. Part two of the given Article stipulates that relation under bank contract shall be regulated by the legislation.

     According to Article 291 of CC unilateral refusal to meet obligations and unilateral alteration of its conditions shall not be permissible unless otherwise is specified by the legislation or by the contract.

     The Constitutional Court emphasizes that legislation of the Republic of Belarus shall envisage the possibility of unilateral alteration of terms and conditions of the contract of banking deposit in part of payment for the depositor of interest on the deposit. Thus, Article 188 of the Bank Code stipulates that the recipient of the deposit shall pay the depositor the interests on the deposit at the rates specified by the contract. Interest rate on time and conditional banking deposits may be altered by the agreement of parties unless otherwise is specified by the contract. Recipient of deposit shall have the right to alter unilaterally the rate of interest which is subject to be paid under the contract poste restante with preliminary notification of depositors, if it is specified by the contract. In instance of reduction by the bank of interest rate new interest rate shall be applicable to the deposit made before notification of the depositor on reduction of interest rate after expiry of no less than one month from the day of notification.

     Acknowledging the presence of lawful grounds for unilateral alteration of conditions of the contract of banking deposit in part of payment for the depositor of the interest under the contract, the Constitutional Court shall also pay attention to the following.

     Under Article 13 of the Constitution of the Republic of Belarus the State shall grant equal rights to all to conduct economic and other activities, other than those prohibited by law, and guarantee equal protection and equal conditions for the development of all forms of ownership. The State shall guarantee to everyone equal opportunities for free utilization of abilities and assets for business and other types of economic activities which are not banned by the law. The State shall regulate economic activities on behalf of individual and society, and shall ensure the direction and co-ordination of state and private economic activity for social purposes.

     The sense of the constitutional norms shall mean recognition of the principle of freedom of contract as one of the guaranteed by the State personal freedoms and freedoms of citizens which is proclaimed to be the principles of civil legislation (paragraph seven of part two of Article 2 of CC).

     The Constitutional Court emphasizes that freedom of contract shall not be absolute, this freedom shall not be the result to deny or to belittle the universally acknowledged rights and freedoms (part one of Article 23 of the Constitution). Under Article 23 of the Constitution and paragraph nine of part two of Article 2 of CC interference in one's private affairs shall not be admissible except for instances when such an interference therein on the grounds of legal norms in the interest of national security, public order, the protection of morals and health of the population as well as rights and freedoms of other persons.

     The method of restriction of the freedom of the contract shall be, in particular, the institute of public contract which shall eliminate the right of a profit-making organization to withdraw from conclusion of the contract in question, except for the instances specified in the legislation (Article 396 of CC), as well as the institute of the contract of acceding and the terms and conditions of which may be accepted precisely by way of acceding to the proposed contract as a whole (Article 398 of CC).

     According to Article 22 of Bank Code the contracts concluded by the banks with clients shall be public contracts or the contracts of acceding unless otherwise is established by the rules which are effective in those banks. The contract of bank deposit the terms and conditions of which are specified by the banks in standard forms shall be referred to the contracts in question. As a result the citizens- depositors as a party in the contract are deprived from the possibility to influence on the content of the contract and that is the restriction of the freedom of the contract and as such need the observance of the principle of proportion due to which a citizen as an economically weak party in those legal relations is in need of special protection of his/her rights and that shall entail the necessity of the relevant legal restriction of the freedom of the contract as regards the other party too, i.e. the banks. In the opinion of the Constitutional Court such an approach shall be promotion for the realization in full of the principle of equality of the participants of civil legal relations fixed in paragraph five of part two of article 2 of CC.

     At the same time, the possibility to refuse from conclusion of the contract of bank deposit, which outwardly shall signify the recognition of the freedom of the contract, may not considered to be adequate for its real securing for the citizens and the more so when there is no duly guarantee of the right of citizens to the protection from economic activities of the banks which are often directed to monopolization and to unfair competition, there are no well-worked through mechanisms of market control over credit organizations, including giving consumers the information on economic status of the bank, and the citizen is forced to agree with practically dictated to him/her terms and conditions, the reduction by the bank unilaterally the interest rate on the deposit.

     The lawmaker, while regulating relations between the banks and the citizens-depositors, should adhere to Articles 2, 13 and 44 of the Constitution under which the individual, his rights, freedoms and guarantees for their attainment manifest the supreme goal and value of society and the State which shall encourage and protect the savings of citizens and guarantee conditions for the return of deposits, and regulation of economic activities for social purposes. For all that, based on the constitutional freedom of the contract, the lawmaker shall have no right to limit oneself by formal recognition of legal equality of parties and should grant certain privileges the economically weak and dependant thereon party in order to prevent unfair competition in the sphere of bank activities and guarantee practicably under Articles 13, 22 of the Constitution the observance of the principle of equality while carrying out entrepreneur and other not banned by the law economic activities. A citizen, by using the contract of banking deposit, shall carry out exactly the specified economic activities.

     The absence in the Bank Code of the norms which shall contain well-grounded restrictions for economically strong party in the contract of bank deposit leads to unreasonable restriction (to belittle) the principle of freedom of contract, of freedom of not banned by the law economical activities for a citizen who concluded the given contract. At the same time, provisions of Article 188 of Banking Code, since they make it possible for the bank on the grounds of the contract to reduce interest rate unilaterally, shall introduce restrictions on the specified constitutional rights and freedoms without determination in the law of the grounds for such a possibility. Thereby, there is a violation of the rules of constitutional freedom of the contract.

     In accordance with point 2 of Article 29 of the Universal Declaration of Human Rights in the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.
Under Article 23 of the Constitution it is the lawmaker who shall determine the instances of necessary restrictions in proportion to the purposes specified in the given constitutional norm. Therefore, in the opinion of the Constitutional Court, only the law should specify whether it is possible (if it is possible - than in what instances) to make reductions by the banks unilaterally of interest rates in order to eliminate arbitrary aggravation of the terms and conditions of the contract for a citizen-depositor in the absence of any objective prerequisites.

     Guided by Article 40, part one of Article 116 of the Constitution, Articles 7, 36, 38, 40, 40¹ of the Law "On the Constitutional Court of the Republic of Belarus" the Constitutional Court

RULED:

1. To propose the Parliament of the Republic of Belarus, in order to secure the specified by Articles 2, 13, 22, 23 of the Constitution of the Republic of Belarus constitutional principles of the freedom of the contract, the equality while exercising entrepreneur and other not banned by the law economic activities, the regulation of economic activities in social purposes, the protection of human rights, freedoms and guarantees of their realization, to determine in the Bank Code of the Republic of Belarus instances under which it shall be admissible to reduce by the banks unilaterally the interest rate on the deposits of citizens with a view of elimination from arbitrary aggravation of the terms and conditions of the contract for a citizen-depositor in the absence of any objective prerequisites.

3. The present Decision shall come into legal force from the date of its adoption.

4. To publish the present Decision in accordance with the legislation.

Presiding Officer —

Chairman of the Constitutional Court

of the Republic of Belarus                                                                                               G.A. Vasilevich