Case No. 8a/94

Case No. 8a/94 Case No. 8a/94 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA D E C I S I O N On the petition filed by a group of the Seimas members to investigate if the Government of the Republic of Lithuania Resolution No. 421 "On Reregistration of Inter-economic Enterprises and Use of Share Contributions in Agricultural Enterprises", as well as Resolution No. 422 "On Rights and Obligations of Heads of Agricultural Enterprises During Privatization Period" both adopted on 12 October 1991, are in the compliance with the Constitution of the Republic of Lithuania. 5 July 1995 The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court Algirdas Gailiûnas, Kæstutis Lapinskas, Zigmas Levickis, Vladas Pavilonis, Pranas Vytautas Rasimavièius, Stasys Staèiokas, Teodora Staugaitienë, Stasys Ðedbaras and Juozas Þilys, the secretary of the hearing - Rolanda Stimbirytë, in its procedural sitting discussed the petition submitted by a group of the Seimas members requesting to investigate if the Government of the Republic of Lithuania Resolution No. 421 "On Reregistration of Inter-economic Enterprises and Use of Share Contributions in Agricultural Enterprises", as well as Resolution No. 422 "On Rights and Obligations of Heads of Agricultural Enterprises During Privatization Period", both adopted on 12 October 1991, are in the compliance with Articles 23, 29, 46, 48 and 95 of the Constitution of the Republic of Lithuania The Constitutional Court has established: The petitioner - a group of the Seimas members - appealed to the Constitutional Court requesting to investigate if the Government Resolution No. 421 of the Republic of Lithuania "On Reregistration of Inter-economic Enterprises and Use of Share Contributions in Agricultural Enterprises" (Official Gazette "Valstybës Þinios" No. 32-883, 1991), as well as Resolution No. 422 "On Rights and Obligations of Heads of Agricultural Enterprises During Privatization Period" ("Valstybës Þinios" No. 32-884, 1991), both adopted on 12 October 1991, are in compliance with Articles 23, 29, 46, 48 and 95 of the Constitution of the Republic of Lithuania according to contents of norms, as well as to the procedure of adoption and signing thereof. In the process of preparation of the case for the hearing the Government have been asked for their opinion concerning the compliance of said resolutions of the Government with Articles 23, 29, 46, 48 and 95 of the Constitution of the Republic of Lithuania according to contents of norms, as well as to the procedure of adoption and signing thereof. On the commission of the Government answers have been presented by the Minister of Agriculture, the Minister of Justice and the Government Secretary of the Republic of Lithuania. It is affirmed in the official letter of the Minister of Agriculture that "said resolutions of the Government contradicted the provisions of Article 44 of the Provisional Basic Law of the Republic of Lithuania, being in force during their adoption, which guaranteed all ownership entities the possibility to independently manage the objects which belonged to them by the right of ownership, to use them and dispose of them in accordance with the laws of Lithuania, stating that equal remedies were established for all ownership entities. Upon loss of validity of the Provisional Basic Law of the Republic of Lithuania (2 November 1992), said contradictions have remained in Article 23 of the Constitution of the Republic of Lithuania which establishes that property is inviolable, and the rights of ownership are protected by law". In the official letter of the Minister of Justice addressed to the Government, which has been submitted to the Constitutional Court, besides, it is stated that Resolution No. 422 of the Government of 12 October 1991 "contradicted the norms of the Civil Code of the Republic of Lithuania, being valid at that time, as well as Article 44 of the Provisional Basic Law of the Republic of Lithuania". It is also emphasized in this official letter that "taking into consideration the set forth circumstances, it would be possible to declare said resolutions of the Republic of Lithuania null and void, though such declaration would have no influence on the validity of purchase-sale agreements, concluded in the process of privatization, as well as of other legal relations". It is confirmed in the Government Secretary's official letter concerning the procedure of adoption of these resolutions that "said questions have not been included into the agenda and minutes of the sitting of the Government, these documents therefore are not available." The Constitutional Court holds that: Pursuant to Article 105 of the Constitution and Article 1 of the Law on the Constitutional Court, the Constitutional Court shall consider and decide the conformity of laws and other acts, adopted by the Seimas, with the Constitution, as well as the conformity of acts, adopted by the President of the Republic and the Government, with the Constitution and the laws. The Constitutional Court thus shall consider cases concerning the conformity of valid legal acts with the Constitution and the laws. After restoration of the independent state of Lithuania the economic reform, the essence of which was the transition from administrative-command economy to market economy by returning the institution of the right of private ownership into the law system of Lithuania, was started to carry out. A legislator chose the way of privatization of the state and social property, as well as of restoration of ownership rights violated in the occupation years. Not only the property legal regime but also the system of economic relations' entities and legal status thereof had undergone changes. Already on 8 May 1990 the Law of the Republic of Lithuania on Enterprises ("Valstybës Þinios" No. 14-395, 1990) was adopted, in which new kinds of these economic entities, their status and forms of activity, as well as the grounds and procedure of liquidation and reorganization of former economic entities were established. It was established in Resolution No.-197 of the Supreme Council "On the Procedure for Enforcement of the Law of the Republic of Lithuania on Enterprises" ("Valstybës Þinios", No. 14-396) that all enterprises which had functioned till the adoption of the Law on Enterprises had to reregistered themselves according to that law. Economic activity of non-reregistered enterprises was banned. Reorganization of agricultural enterprises and privatization thereof were also regulated by other laws. On 16 April 1991 the Law on Agricultural Companies ("Valstybës Þinios" No. 13-328) and Resolution No. 1-1223 of the Supreme Council "On the Enforcement of the Law of the Republic of Lithuania on Agricultural Companies" ("Valstybës Þinios" No. 13-329, 1991) were adopted. It was established in this resolution that "kolkhozes and soviet farms may be reorganized into agricultural companies upon privatization of their property in accordance with the laws of the Republic of Lithuania". The status of agricultural enterprises subject to privatization was established in the Law on the Privatization of Property of Agricultural Enterprises, adopted on 30 July 1991 ("Valstybës Þinios" No. 24-637, 1991). In Resolution No. 1-1629 of the Supreme Council "On the Procedure for Enforcement of the Law on the Privatization of Property of Agricultural Enterprises" ("Valstybës Þinios" No. 24-638, 1991), adopted on 30 July 1991 together with said above law, the Government was commissioned to establish the privatization procedure for agricultural enterprises. The 12 October 1991 Government Resolutions No. 421 and 422 in dispute while implementing the economic reform were adopted as executive acts of temporary (ad hoc) validity. Resolutions of the Government are the acts of application of law norms irrespectively of the fact whether that act is of temporary (ad hoc) or permanent validity (Ruling of the Constitutional Court, 15 July 1994, in Case No. 1/94. - "Valstybës Þinios" No. 56-1103, 1994). The main difference in their validity time is that the acts of permanent validity are applied till they are not repealed by the established procedure. While acts of temporary validity are applied only for one legal relation (individual acts) or for a group of clearly defined legal relations by essentially changing their contents. For instance, such are acts of foundation, liquidation or reorganization, changing factual state of an entity in accordance with its legal status established in law. Acts of temporary validity are invalidated after their application, since legal relations, which appear on their basis, are already regulated by other legal acts. Acts of permanent validity are laws which consolidate new contents of legal relations. It should be noted that the system of economic relations, created during the economic reform, and legal status as well as activity of their entities, established already prior to the enforcement of the Constitution and after its adoption, are being further developed and regulated by laws. After the adoption of the Government resolutions in dispute, the legislator, neither prior to the enforcement of the Constitution nor after its coming into force, changed the factually formed system of economic entities and the general status thereof, i.e. factually recognized their legality. While carrying out privatization, while executing said laws, other legal acts, as well as the Government resolutions in dispute during the transitional period of essential reorganizations of economic relations, agricultural enterprises acquired quite different status, i.e. Resolutions No. 421 and 422 were executed. The changed status of agricultural enterprises was consolidated by said laws as well as their amendments made in 1991 - 1995 (Amendments to the Law on Enterprises - Official Gazette "Valstybës Þinios" No. 5-128, 32-867, 1991; No. 20-590, 33-1009, 1992; No. 4-75, 20-492, 25-581, 32-729, 1993; No. 8-119, 14-232, 30-533, 55-1047, 59-1163, 94-1836, 1994; No. 3-38, 10-206, 10-207, 39-964, 44-1074, 1995; amendments to the Law on Agricultural Companies -"Valstybës Þinios" No. 14-386, 1992; No. 7-140, 52-997, 62-1169, 1993; No. 1-1, 100-1998, 1994; amendments to the Law on the Privatization of Property of Agricultural Enterprises - "Valstybës Þinios" No. 14-385, 1992; No. 13-311, 1993 and others). At present their status is also consolidated in the Civil Code (Chapter III, Paragraph 2), the Law on Agricultural Companies, the Law on Land ("Valstybës Þinios" No. 34-620, 1994), as well as in other laws and acts of the Government Resolutions No. 421 and No. 422 of the Government, 12 October 1991, are the executive acts of temporary validity which were adopted, executed and, though they were not formally annulled, in fact they were voided even prior to the enforcement of the Constitution, because: 1) such entities of legal relations, for which the norms of said resolutions were fixed, disappeared on the basis of laws; 2) after new social relations have been formed in agriculture, no regulation subject, for which they were designated, exists. It is established in Article 2 of the Law of the Republic of Lithuania "On the Procedure for the Enforcement of the Constitution of the Republic of Lithuania" that : "Laws, other legal acts, or parts thereof which were in effect on the territory of the Republic of Lithuania prior to the adoption of the Constitution of the Republic of Lithuania, shall be effective provided that they do not contradict the Constitution and this law, and shall remain effective until they are either declared null and void or coordinated with the provisions of the Constitution." So the procedure for coordination of acts, being effective after coming into force of the Constitution, with the Constitution itself, is established in this law. Meanwhile, the Government acts in dispute were already executed and were voided even prior to the enforcement of the Constitution. Neither the legislator nor the Government settled the question of nullification of these resolutions. On the contrary, the legislator and the Government further regulated the activity of the economic entities, which appeared after the execution of said resolutions, by laws and other legal acts adopted both prior to the enforcement of the Constitution and after its coming into force. There are no legal motives to evaluate the conformity of the Government Resolutions in dispute with the Constitution in accordance with their contents, as well as according to the procedure of adoption and signing thereof, since upon the execution of said acts, they were voided even prior to the adoption of the Constitution. Taking into consideration that the validity of the Government Resolutions in dispute is expired, the Constitutional Court shall state that this is the basis for termination of the legal proceedings commenced in the case. Conforming to Article 69 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania shall take the following decision: To terminate the legal proceedings commenced in this case. Justices of the Constitutional Court: Algirdas Gailiûnas Kæstutis Lapinskas Zigmas Levickis Vladas Pavilonis Pranas Vytautas Rasimavièius Stasys Staèiokas Teodora Staugaitienë Stasys Ðedbaras Juozas Þilys