Financial Disputes Resolution Commission

A short guide for applicants and other interested persons

Issued by:

Chairman of Financial Disputes Resolution Commission

Updated February 2014

Table of Contents

1 Introduction

1.1 What is the Financial Disputes Resolution Commission (FDRC)?1.2 What type of cases does FDRC deals with?1.3 Is there a fee for referring cases to FDRC?

2 Preliminary Issues

1.1 How are cases begun?1.2 Is there a time limit?1.3 What happens next?1.4 Will there be a hearing?1.5 Can a case be withdrawn or settled?1.6 Can I represent my self or do I have to have a lawyer?1.7 Where can I find more information?

1 The Hearings

1.1 When and where will my case be heard? 1.2 Will the hearing be in public?1.3 What if I wish to postpone a hearing?1.4 If I need the evidence of a witness, what do I do?1.5 What if I fail to attend a hearing?1.6 What happens in the end of a hearing?1.7 Can I ask FDRC to review its decision?1.8 What about appeal to a court of Law?

2 Other Information

1.1 Address and Website of FDRC1.2 Related laws

1 INTRODUCTION

1.11.1 What is the Financial Disputes Resolution Commission (FDRC)?

The FDRC is established in accordance with Article 106 of The Da Afghanistan Bank Law which states, “A Commission shall be established to resolve financial disputes in an amicable manner before the matters are taken to the court of law.” It is a specialized forum dedicated to independent, transparent, efficient, and technically sound resolution of complex regulatory matters in the banking and telecommunication sectors. It is designed to hear disputed financial cases prior to judicial proceedings on a mediation bases, and to perform the functions specified in the Banking Law, the Da Afghanistan Bank Law, and Law on Regulation Telecommunication Services1. For administrative purposes, the FDRC budget flows through Da Afghanistan Bank budget, but the Commission functions independently. The Commission is comprised of six professional members three of whom are lawyers proposed by the Governor of the Da Afghanistan Bank and appointed by the President of Islamic Republic of Afghanistan and the remaining three are experienced accountants proposed by the Minister of Finance and appointed by the President. The Commission is headed by a Chairman, who is selected from amongst the lawyer members by the Governor of the Da Afghanistan Bank and appointed by the President. The Commission is authorized to hire administrative staff as its workload requires.

The Commission performs its functions in accordance with its CODE OF BY LAWS AND PROCEDURES drafted in light of Article 111 of the Da Afghanistan Bank Law.

1.2 What type of cases does the FDRC deal with?

Among other functions, FDRC resolves disputes between regulatory institutions such as Da Afghanistan Bank, which is the regulator of financial sector, and financial institutions, and Afghanistan Telecommunication Regulatory Authority (ATR), which is the regulator of Telecommunication sector, and Telecom companies. FDRC is an Administrative Law Tribunal with exclusive (original) jurisdiction to hear such cases. In other words, no institution has the authority to take any case in the above mentioned areas, including judiciary, except where it functions as appellate forum, unless it has gone through FDRC first. One exception to this rule is if two financial institutions through a prior written agreement refer their case to FDRC, FDRC can take that case according to sub- article 3 Article 107 of the Da Afghanistan Bank Law.

1.3 Is there a fee for referring case to FDRC?

Yes, upon issuing a decision at the conclusion of a dispute, the FDRC may recover expenses associated with cost of managing the dispute. If the case results in a monetary judgment, the FDRC may 1 Article 10 of the Telecommunication Services Law authorizes persons to file petition for relief with FDRC, if he does not agree with the decision of Afghanistan Telecommunication Regulatory Authority (ATRA) which is the regulator of Telecommunication Services sector of Afghanistan.

recover expenses totaling not more than two (2) percent from the losing party. For more detail, see Article 21 of the Code of Bylaws and Procedure of FDRC.

1 Preliminary Issues

1.1 How are cases begun?

Cases are begun by the applicant or his authorized representative completing and submitting the application to FDRC with FDRC-1 form attached to the application. The application must comply fully with Article 10 of the Code of Bylaws and Procedures of FDRC and a copy must be sent to the other party2.

1.2 Is there a time limit?

Yes. The application must be filed within the statutory time limit. The applicant must not miss the deadline specified by the related statutes. Since FDRC hears cases from more than one sector, where there are multiple time limitations imposed by different statutes, therefore, the applicants must comply with their statute’s time limitation; otherwise, FDRC may reject the application.

1.3 What happens next?

After the application is filed, unless otherwise specified by law, within one week from the date on which the initial application is filed, the FDRC shall make a preliminary determination as to whether or not the initial application reasonably appears to present a dispute that is within the jurisdiction conferred on FDRC by law and that merits a review, and shall notify the parties of its preliminary determination within one month.

If FDRC concludes that the matter presented appears to be within its jurisdiction, FDRC will summon the requesting party and other entities named in the initial application to an initial hearing at which the requesting party will be required to present an overview of its complaints and other parties will be given the opportunity to present preliminary responses.

The initial hearing will be held within reasonable time in the opinion of FDRC and FDRC will establish calendar for future hearings and submission of further documents, including responses to the original request.

1.4 Will there be a hearing?

Yes. When FDRC makes preliminary determination that the application presents a dispute that is within the jurisdiction of FDRC, it

2 For more information in this regard, you can look at Article 9-10 of Code of Bylaws and Procedures of FDRC, which explains in detail how the process of registering case with FDRC is begun.

will summon the parties for a hearing on a specified date. The process of hearing in FDRC is not different from any other hearing taking place in courts around the world, and adheres to internationally accepted standards of due process.

In some cases the FDRC may arrange a pre-hearing session and facilitate negotiation between the parties for reaching a solution without going to a hearing, in which it is up to the parties to reach a solution or go to the trial. Similarly, FDRC will try to resolve all the pre-hearing issues before the trial begins.

1.5 Can a case be settled or withdrawn?

Yes. At any time before the trial begins, it is possible for an applicant to withdraw his case. Similarly, it is possible for the parties to apply to settle their case at any time, before and during, the trial. But there is a difference if the settlement is reached by the parties before the trial and when it is reached during the trial, because in the first scenario, FDRC is not involved formally and it can facilitate the settlement informally but the parties have freedom to reach any outcome they deem appropriate. But in the second scenario, FDRC has to approve the settlement; otherwise, it will have no legal effect.

2.6 Can I represent my self or do I have to have a lawyer?

Since FDRC hears cases on behalf of legal persons, there has to be representation of the legal persons by natural persons. Having said that, the corporations may choose one of their employees to conduct their case on their behalf, or be represented by any other person whether or not the person is legally qualified. Exceptionally, in some cases, FDRC may refuse to allow a person to represent a party at the hearing if it is satisfied that there are good reasons to do so.

2.7 Where can I find more information?

For further information please see Articlse 106-114 of the Da Afghanistan Bank Law, Chapters 7-10 of the Banking Law of Afghanistan, and Article 10 of Telecommunication Services Law. For more detailed information, see the FDRC’s Code of Bylaws and Procedures.

All this may be found at: www.fdrc.gov.af

3 The Hearings

3.1 When and where the case will be heard?

Within one week after receiving the application, FDRC will make preliminary determination that if the dispute reasonably appears to be within its jurisdiction and is not barred by any legal obstacle such as statutory time lime. Within one month, it will inform the parties about the date of the hearing, which will take place in the premises of FDRC. All other issues will be dealt with in the first hearing.

1.23.2 Will the hearing be in public?

All hearings are normally held in public unless FDRC decides that it is necessary to conduct all or part of the hearing in private. If the parties want all or part of their case to be heard in private, they must apply in writing. FDRC may allow all or part of the hearing to take place in private if it is satisfied that the claim is legitimate and there are compelling reasons to allow the hearing in private, and it would not prejudice the interest of justice. What is “a legitimate claim and compelling reasons” is for FDRC to decide.

1.33.3 What if I wish to postpone a hearing?

Normally, hearings take place on the specified date, but if it is essential for one or more parties to seek postponement, they should immediately ask FDRC for postponement. The request shall be made before the commencement of the time specified for the hearing, shall state a good reason for the postponement, and the parties must be prepared to a agree on an alternative date.

A conflicting engagement elsewhere is not normally a sufficient reason to justify postponement.

3.4 If I need the evidence of a witness, what do I do?

It is up to the parties to arrange for their witnesses to attend the hearing and give their testimony. If a witness is not ready to attend or if there are documents in his position which, if presented, will affect the outcome of the case, FDRC according to Article 1123 of the Da Afghanistan Bank law can compel the witness to attend the hearing and present the documents. However, it is important that the name and other information of the witnesses are submitted to FDRC before the commencement of the preliminary hearing.

3.5 What if I fail to attend the hearing?

The parties or their representatives shall attend the hearings as directed by Article 17 of the Code of Bylaws and Procedures of FDRC.

3 For more information, you can look at Article 112 of the Da Afghanistan Bank Law

Failure to attend the hearings may subject the parties to all penalties available under law, including in Da Afghanistan Bank Law Article 112.

3.6 What happens at the end of a hearing?

The commission will announce its decision in the presence of both parties. A detailed copy of the decision, including rationale, will be given to both parties after the announcement. The decision must be in writing, signed by all FDRC members, who has participated in the in the hearings.

3.7 Can I ask the FDRC to review its decision?

Yes. A second request can be made to FDRC to review its decision by the original complaining party, except that the scope of the appeal to the FDRC may not ask FDRC to revisit the factual or legal matters already addressed during the first request. The scope of the second request to the FDRC should be limited to matters relating to or arising from enforcement or implementation of the FDRC decision, or to new facts related to the issue that could not have been raised in the proceeding followed the initial application. The outcome of the second request cannot be subject of further requests to FDRC.

1.83.8 What about appeals to the court of law?

The decisions of FDRC can be appealed to the judiciary with 15 days. If the parties choose not to or fail to appeal, the decisions of FDRC will be implemented as court orders.

4 Other information 4.1 The address of FDRC is:

FDRC Office, Dehmazang Square, behind Russian Cultural Center, Kabul, Afghanistan

Telephone: 020-2510614

Website: www.fdrc.gov.af 4.2 Useful Laws:

The Da Afghanistan Bank LawBanking Law of AfghanistanLaw on Regulation Telecommunication Services