Lietuviškai
						Case No. 11/02

           THE CONSTITUTIONAL COURT OF THE REPUBLIC OF           
                            LITHUANIA                            

                             RULING                              
            ON THE COMPLIANCE OF ARTICLE 2 AS WELL AS            
       PARAGRAPHS 2 AND 4 OF ARTICLE 3 OF THE REPUBLIC OF        
         LITHUANIA LAW ON REORGANISATION OF THE SPECIAL          
       PURPOSE COMPANY "LIETUVOS ENERGIJA" (WORDING OF 28        
        JUNE 2001) WITH THE CONSTITUTION OF THE REPUBLIC         
                          OF LITHUANIA                           

                          16 March 2005                          
                             Vilnius                             

     The  Constitutional  Court  of  the  Republic  of Lithuania,
composed  of  the  Justices  of  the Constitutional Court Armanas
Abramavičius,   Egidijus  Jarašiūnas,  Egidijus  Kūris,  Kęstutis
Lapinskas,   Zenonas   Namavičius,  Augustinas  Normantas,  Jonas
Prapiestis, Vytautas Sinkevičius, and Stasys Stačiokas,
     with the secretary of the hearing-Daiva Pitrėnaitė,
     pursuant  to  Articles  102  and  105 of the Constitution of
the  Republic  of  Lithuania  and  Article  1  of  the Law on the
Constitutional   Court  of  the  Republic  of  Lithuania,  on  17
February  2005  in  its public hearing heard Case No. 11/02 which
originated  in  a  petition  of  the  Vilnius Regional Court, the
petitioner,  requesting  to  investigate as to whether Article 2,
as  well  as  Paragraphs  2 and 4 of Article 3 of the Republic of
Lithuania  Law  on  Reorganisation of the Special Purpose Company
"Lietuvos  energija"  are  not in conflict with Article 23 of the
Constitution of the Republic of Lithuania.

     The Constitutional Court
                        has established:                         

                                I                                
     The    Vilnius   Regional   Court,   the   petitioner,   was
investigating  a  civil  case.  By its ruling the court suspended
the  investigation  of the case and applied to the Constitutional
Court  with  the petition requesting to investigate as to whether
Article  2,  as  well  as  Paragraphs 2 and 4 of Article 3 of the
Law  on  Reorganisation  of the Special Purpose Company "Lietuvos
energija"   (Official   Gazette   Valstybės   žinios,  2001,  No.
62-2223) are not in conflict with the Constitution.
  
                               II                                
     The  petition  of  the  petitioner is based on the following
arguments.
     The  Law  on  Reorganisation  of the Special Purpose Company
"Lietuvos  energija"  established  the  method  and  procedure of
reorganisation   of   the   special   purpose  company  "Lietuvos
energija"   which   differ  from  the  method  and  procedure  of
reorganisation  of  companies which are provided for in Paragraph
1  of  Article  1  of the Republic of Lithuania Law on Companies:
the  requirements  of  Paragraphs  6,  10  and  14 of Article 54,
Paragraph  2  of  Article 66, Articles 67 and 68, Paragraphs 1, 2
and  3  of  Article  69,  Paragraphs  2  and  3  of  Article  70,
Paragraphs  2  and  4  of  Article  71 and Paragraphs 1 and 10 of
Article   72   of   the   Law   on  Companies  do  not  apply  to
reorganisation   of   the   aforesaid   enterprise,  while  other
articles  of  the Law on Companies and other laws of the Republic
of   Lithuania   apply  only  to  the  extent  that  the  Law  on
Reorganisation   of   the   Special   Purpose  Company  "Lietuvos
energija"  does  not  provide  otherwise  (Paragraph 2 of Article
1).  Under  the  Law  on  Reorganisation  of  the Special Purpose
Company   "Lietuvos   energija"   the   special  purpose  company
"Lietuvos  energija"  is  reorganised  according to the method of
division   of  companies;  upon  reorganisation  of  the  special
purpose   company   "Lietuvos   energija"   the   shares  of  the
shareholders  of  this  company  are distributed in proportion to
the  authorised  capitals  of  the  company  "Lietuvos  energija"
which  continues  its  activity  after the reorganisation and the
companies  established  under  the  reorganisation; shares of the
companies  established  on  the  basis  of property of affiliated
units  and  divisions  of  the  special purpose company "Lietuvos
energija",   which   are  engaged  in  activity  other  than  the
principal  activity,  must  be transferred to the shareholders of
the  companies  established  upon reorganisation in proportion to
the  number  of  shares  of  the  company  owned  by them. In the
opinion   of   the  petitioner,  by  such  legal  regulation  the
property  rights  of  shareholders  of the aforementioned company
were  violated  (restricted), therefore Article 2, and Paragraphs
2  and  4  of  Article  3  of  the  Law  on Reorganisation of the
Special   Purpose  Company  "Lietuvos  energija",  by  which  the
general  procedure  of  reorganisation  of companies was changed,
are in conflict with Article 23 of the Constitution.
  
                               III                               
     1.  In  the  course  of  the preparation of the case for the
Constitutional   Court   hearing,  written  explanations  of  the
representative  of  the  party  concerned, the Seimas, who was K.
D. Prunskienė, a member of the Seimas were received.
     According  to  the  representative  of  the party concerned,
the   Law  on  Reorganisation  of  the  Special  Purpose  Company
"Lietuvos  energija"  is  a  special  one in regard to the Law on
Companies  and  the  Civil Code of the Republic of Lithuania. The
fact  that  certain  particularities  of  reorganisation  of  the
company  "Lietuvos  energija"  are  established  in  the  Law  on
Reorganisation   of   the   Special   Purpose  Company  "Lietuvos
energija"  and  that  one  specified that certain requirements of
the  Law  on  Companies  do not apply in regard to reorganisation
of  the  abovementioned  company does not mean that the principle
of   inviolability   of   property   has   been   violated.   The
representative   of   the  party  concerned  maintains  that  the
shareholders  are  not  owners  of  the  property of the company,
they  only  enjoy  ownership  rights  of the shares which entitle
them  to  certain  property and non-property rights including the
right  to  vote  at  a general meeting of shareholders. Decisions
are  passed  at  a  general meeting of shareholders by a majority
vote.  Thus  the  inviolability  of  property is consolidated. If
the  shareholders  holding  minority  of votes are able to veto a
decision  at  a  general  meeting  of shareholders, the rights of
the   other   shareholders   (majority)   would  be  unreasonably
restricted;  this  would  be  in  conflict with Article 28 of the
Constitution.
     In  the  opinion  of  K. D. Prunskienė, if the shares of the
company  "Lietuvos  energija"  which continues its activity after
reorganisation   and   the   companies  newly  established  after
reorganisation   are  distributed  to  the  shareholders  of  the
special  purpose  company  "Lietuvos  energija"  which functioned
prior  to  reorganisation in proportion to the authorised capital
of  the  companies,  the  property interests of the shareholders,
irrespective  of  the market value of the property of the company
"Lietuvos   energija"   which   continues   its   activity  after
reorganisation   and   companies   newly   established  upon  its
reorganisation  and  the  amount  of  obligations  transferred to
them,  are  not  violated as the proportion of the shares remains
the   same.   Moreover,  the  principle  of  equal  proportionate
distribution  of  shares  of  newly  established  companies could
have  been  applied  according  to  the  Law  on Enterprises, the
constitutionality  of  which is not subject to the dispute by the
petitioner, as well.
     2.  In  the  course  of  preparation  of  the  case  for the
Constitutional  Court  hearing written explanations were received
from  the  representative of the party concerned, the Seimas, who
was  G.  Sagatis, a senior advisor to the Legal Department of the
Office of the Seimas.
     According  to  the  representative  of  the party concerned,
decentralisation  of  the  system  of  energy  administration  is
vitally  important  to  the  economic  stability of this country,
its  integration  into  the European Union, and implementation of
other  strategic  objectives,  moreover,  the  restructuring  and
privatisation  of  the  energy  sector  is  to  be related to the
increase   of   the   role   of   municipalities;   the   Law  on
Reorganisation   of   the   Special   Purpose  Company  "Lietuvos
energija"   is   a   part   of  the  process,  during  which  the
centralised  system  of management of the economy was reorganised
into  constitutionally  legalised  self-governing  systems,  thus
transferring  the  decision  making  related to local energy from
national  to  municipal level. According to the representative of
the  party  concerned,  the  fact that the legislator established
the  method  of  reorganisation  of  the  special purpose company
"Lietuvos  energija"  should not be considered an interference of
the  state  into  the  affairs  of a private legal person, as the
special  purpose  companies  perform functions, which are vitally
important  to  the  state,  special  regime  is  needed for their
functioning,  and  they  are  not  considered to be private legal
persons.  In  the  opinion  of G. Sagatis, having established the
method  and  procedure  of  reorganisation of the special purpose
company   "Lietuvos   energija"   which   is   disputed   by  the
petitioner,   the   legislator  did  not  exceed  the  limits  of
discretion  vested  in  him by the Constitution, as he enjoys the
right   to   establish   by  a  special  law  particularities  of
reorganisation  of  a  strategic  entity; in addition to that, in
the  countries  where the continental law traditions prevail, the
activity  of  companies  is regulated not only by private, but by
public  law  as  well,  and the interests of shareholders must be
coordinated  with  the  interests  of  other groups interested in
the  activity  of  the  company (employees, consumers, creditors,
public at large).
     Under  the  statement  of  the  representative  of the party
concerned,   when  acquiring  shares  of  a  company  the  person
accepts  a  risk  that the scope of his property and non-property
rights  will  depend  not  only  upon himself, but on the will of
other  shareholders  of  the  company  also.  The  rights  of the
shareholder  are  assessed  in  regard  to quantity by expressing
them  in  proportions  instead  of monetary equivalent, therefore
as  far  as the processes of reorganisation of the company do not
change    the    proportions   of   shareholders'   rights,   the
reorganisation  does  not infringe the rights of ownership of the
shareholders.  Having  established  that only the general meeting
of  the  shareholders  of  the  company  by at least 2/3 majority
vote  could  adopt  a  decision to reorganise the special purpose
company   "Lietuvos  energija"  and  approve  a  project  of  its
reorganisation  and  the  prepared articles of association of the
companies  to  be  established during the reorganisation, one has
ensured  the  right  of  all  shareholders,  including  the small
shareholders,   to   express   their   position   concerning  the
principle  of  proportionate  distribution of shares of companies
which  are  newly established during the reorganisation, as well.
The  application  of this principle resulted in the fact that the
constitutional  principle  of  inviolability  of property has not
been violated.
  
                               IV                                
     In  the  course  of  the  preparation  of  the  case for the
Constitutional  Court  hearing  the  explanations  were  received
from  B.  Bradauskas, the Chairman of the Committee on Budget and
Finance  of  the  Seimas,  V.  Karbauskis,  the  Chairman  of the
Committee  on  Economics of the Seimas, K. Virketis, the Director
of  the  Legal  Department  of  the  Office  of  the  Seimas,  T.
Birmontienė,  the  Head of the Legal Department and Legal Advisor
to  the  President  of  the  Republic of Lithuania, J. Dubinienė,
the  Director  of  the  Legal  Department  of  the  Office of the
Seimas,  A.  Slivinskas,  the Head of the Economy Division of the
Office  of  the  Government,  P.  Čėsna,  a  former  Minister  of
Economy,  V.  Uspaskich,  the  Minister of Economy, P. Koverovas,
the  State  Secretary at the Ministry of Justice, P. Milašauskas,
the  Director  General  of  the  State Property Fund, V. Poderis,
the   Chairman   of  the  Lithuanian  Securities  Commission,  A.
Keleras,  the  President  of the Central Securities Depository of
Lithuania,  D.  Jasulaitytė,  the  President of the Vilnius Stock
Exchange,  Assoc.  Prof.  Dr.  V.  Mizaras, the Head of the Civil
Law  and  Civil  Process  Department  at  the  Faculty  of Law of
Vilnius  University,  and  Assoc.  Prof.  Dr. V. Pakalniškis, the
Head  of  the  Civil and Commercial Law Department at the Faculty
of Law of the Law University of Lithuania.
  
     The Constitutional Court
                           holds that:                           

     1.  The  petitioner,  the Vilnius Regional Court, had doubts
as  to  whether  Article  2  as  well  as  Paragraphs  2 and 4 of
Article  3  of  the  Law on Reorganisation of the Special Purpose
Company   "Lietuvos   energija"   (wording   of   28  June  2001,
hereinafter  also  referred  to  as  the Law) are not in conflict
with Article 23 of the Constitution.
     2.  On  28 June 2001, the Seimas adopted the Law on Amending
the   Law  on  Reorganisation  of  the  Special  Purpose  Company
"Lietuvos  energija",  by  Article  1 of which it amended the Law
on  Reorganisation  of  the  Special  Purpose  Company  "Lietuvos
energija" (wording of 18 May 2000) and set it forth as follows:
        "THE REPUBLIC OF LITHUANIA LAW ON REORGANISATION         
            OF THE SPECIAL PURPOSE COMPANY 'LIETUVOS             
                           ENERGIJA'"                            
     Article 1. Purpose of the Law
     1.  This  Law  shall  establish  the method and procedure of
reorganisation   of   the   special   purpose  company  'Lietuvos
energija'.
     2.  The  requirements  of Paragraphs 6, 10 and 14 of Article
54,  Paragraph  2  of  Article 66, Articles 67 and 68, Paragraphs
1,  2  and  3  of  Article  69, Paragraphs 2 and 3 of Article 70,
Paragraphs  2  and  4  of  Article  71,  Paragraphs  1  and 10 of
Article  72  of  the  Law  on  Companies  shall  not apply to the
reorganisation   of   the   special   purpose  company  'Lietuvos
energija'.  Other  articles  of  the  Law  on Companies and other
laws   of  the  Republic  of  Lithuania,  when  reorganising  the
special  purpose  company  'Lietuvos energija', apply only to the
extent that this law does not provide different.
     Article 2. Method of Reorganisation
     1.  The  special  purpose  company 'Lietuvos energija' shall
be   reorganised   according   to   the  method  of  division  of
companies,  i.e.  by  separating from the special purpose company
'Lietuvos  energija',  which  shall  continue  its activity after
reorganisation  as  a  company, the parts of property, rights and
obligations  and  by  establishing  new  companies based on them.
Prior   to   reorganisation   of   the  special  purpose  company
'Lietuvos   energija'   by  the  method  of  division  (prior  to
confirmation  of  the project of reorganisation), a company shall
be  established  on  the  basis  of  the  property  auxiliary and
utility  property  assigned  to  the  'Lietuvos  elektrinė',  the
subsidiary  of  this  company,  the  shares  of  which  shall  be
transferred  to  the ownership of the municipality of Elektrėnai,
thus  reducing  the  authorised  capital  of  the special purpose
company  'Lietuvos  energija'  and  the  number  of shares of the
special  purpose  company 'Lietuvos energija' owned by the state.
Upon  the  Government  resolution,  the  facilities of production
and  engineering  infrastructure,  social  objects  and buildings
(their   parts)   of   the   special  purpose  company  'Lietuvos
energija'    must    be   transferred   to   the   ownership   of
municipalities,  thus  reducing  the  authorised  capital  of the
special  purpose  company  'Lietuvos  energija' and the number of
shares  of  the special purpose company 'Lietuvos energija' owned
by  the  state.  The notice about the reduction of the authorised
capital  of  the  special  purpose  company  'Lietuvos  energija'
shall  be  publicly  announced  twice,  with  at  least  14  days
period.  Amendments  to  the  articles  of association related to
the  reduction  of  the authorised capital of the special purpose
company  'Lietuvos  energija' shall be registered at the registry
of  enterprises  not earlier than 14 days after the second public
announcement  of  the  reduction  of  the  authorised capital was
made  and  additional  guarantees  were  given  to  the creditors
requesting them.
     2.  The  property  assigned  to regional affiliated units of
electricity  network  exploitation,  except  330  kV  and  110 kV
voltage    electricity    networks    as   well   as   buildings,
constructions,  and  equipment  needed  to operate and administer
them,  as  well  as  other  property, shall be separated from the
special  purpose  company  'Lietuvos  energija'.  On the basis of
property  assigned  to  the  individual regional affiliated units
of  electricity  network  exploitation an economically reasonable
company  (companies)  of  electricity  distribution network shall
be established.
     3.  The  property assigned to the affiliated units 'Lietuvos
elektrinė'  and  'Mažeikių  elektrinė' and used by them for their
principal  activity  shall  be separated from the special purpose
company  'Lietuvos  energija'.  On the basis of this property the
companies  'Lietuvos  elektrinė'  and  'Mažeikių elektrinė' shall
be  established.  The  'Energetikos  remontas'  in  Kaunas  shall
remain  a  subsidiary  of  the  company "Lietuvos energija" until
2005.
     4.  In  order to enable it to perform the functions, all the
property  of  the  reorganised  special purpose company 'Lietuvos
energija'  which  remained  and  was  not  transferred  to  newly
established   companies   shall   be   assigned  to  the  company
'Lietuvos  energija'  which  continues  its  activity  after  the
reorganisation.
     Article 3. Procedure of Reorganisation
     1.  After  the Seimas consents to the presented distribution
of  the  authorised  capital and obligations (duties) between the
newly   established  companies  which  is  provided  for  in  the
project  of  reorganisation, and after the Government consents to
the  entire  submitted  project  of  reorganisation,  the general
meeting  of  the  shareholders  of  the  special  purpose company
'Lietuvos  energija'  by  at  least 2/3 majority vote may adopt a
decision  to  reorganise  the  company and to approve the project
of  reorganisation  and  prepared  articles of association of the
companies    which    are    newly    established    during   the
reorganisation.
     2.  The  shares of the companies established on the basis of
property  of  affiliated  units  and  divisions  of  the  special
purpose   company  'Lietuvos  energija'  ('Kruonio  HAE  statybos
valdyba',   'Šiaulių   energetikos   statyba',  'Elektros  tinklų
statyba',  'Gelžbetoninių  atramų gamykla', and hotel 'Elektra'),
which  are  engaged in activity other than the principal activity
of  the  company,  must,  until  31  December 2002 the latest, be
transferred  to  the  shareholders  of  the  companies  which are
newly  established  after the reorganisation in proportion to the
number   of  shares  of  these  companies  owned  by  them,  thus
respectively  reducing  the  authorised  capital  of  the special
purpose  company  'Lietuvos energija' and transferring the shares
owned  by  the  company  to the state-owned enterprise 'Valstybės
turto  fondas'.  A  notice  about the reduction of the authorised
capital  of  the company 'Lietuvos energija' shall be made public
twice,  with  at  least  14  days  period.  The amendments to the
articles   of   association  related  to  the  reduction  of  the
authorised  capital  of  the company 'Lietuvos energija' shall be
registered  at  the  registry  of  enterprises no earlier than 14
days  after  the  second  public announcement of the reduction of
the  authorised  capital  was made and additional guarantees were
given to the creditors requesting them.
     3.  During  the  reorganisation  the property of the special
purpose   company  'Lietuvos  energija'  shall  be  assessed  and
calculated  according  to the residual balance value, pursuant to
the Law on the Principles of Accounting and other legal acts.
     4.  After  the reorganisation of the special purpose company
'Lietuvos  energija',  the  shares  of  the  shareholders  of the
special    purpose   company   'Lietuvos   energija'   shall   be
distributed  in  proportion  to  the  authorised  capitals of the
company  'Lietuvos  energija'  which continues its activity after
the   reorganisation   and   companies   established  by  way  of
reorganisation.
     5.  The  confirmed project of reorganisation and the minutes
of  the  general  meeting  of  the shareholders which approved it
must   be  handed  over  to  administrator  of  the  registry  of
enterprises  not  later than with 5 working days from the date of
the  meeting  during  which  the  project  of  reorganisation was
confirmed.
     6.   The  announcements  about  the  reorganisation  of  the
special   purpose  company  'Lietuvos  energija'  shall  be  made
twice, with at least 14 days period.
     7.  All  rights  and obligations (duties) of the reorganised
special    purpose   company   'Lietuvos   energija'   shall   be
transferred  to  the  companies  which  shall  function after the
reorganisation.   The   reorganised   special   purpose   company
'Lietuvos   energija'   must   give   additional   guarantees  on
fulfilment  of  its  obligations  to  every creditor who requests
them.  The  issue of the right of subrogation against the Belarus
state-owned  energy  concern 'Belenergo' concerning the submitted
electricity  shall  be  decided by the Government of the Republic
of Lithuania.
     8.  The  companies  established during the reorganisation of
the   special  purpose  company  'Lietuvos  energija'  and  their
articles  of  association  shall be registered after the founding
meetings  of  the  shareholders,  pursuant to the Law on Registry
of  Legal  Persons.  Instead  of  the  association  agreement the
companies  which  are established during the reorganisation shall
submit  the  minutes  of  the general meeting of the shareholders
of   the   special  purpose  company  'Lietuvos  energija'  which
approved the project of reorganisation.
     9.   The  guarantees  issued  by  the  state  to  the  banks
regarding   credits   granted  to  the  special  purpose  company
'Lietuvos  energija'  shall  apply  in  regard  of  the companies
functioning  after  the  reorganisation which have taken over the
obligations under the aforementioned credits.
     10.   In  the  project  of  reorganisation  of  the  special
purpose  company  'Lietuvos  energija'  one must establish, after
coordination  with  the  Ministry of Finance, the handover of the
obligations  of  the  special purpose company 'Lietuvos energija'
under  the  credits  received  on  behalf  of the state or with a
guarantee of the state.
     11.  Until  the  Law  on  Electricity  becomes effective and
legal  acts  related to its implementation are drafted, relations
between  the  company  'Lietuvos  energija'  which  continues its
activity   after   the  reorganisation  of  the  special  purpose
company  'Lietuvos  energija'  and  the companies which are newly
established   during   the   reorganisation   in   the   area  of
production,  transfer  and  distribution of electricity and other
areas,  must  be  established in the project of reorganisation of
the special purpose company 'Lietuvos energija'.
     12.  Relations  between  the  reorganised  company 'Lietuvos
energija'    and   the   company   'Mažeikių   elektrinė'   while
administering  the  closed  distribution  unit  of 110 kV voltage
must  be  established  in  a  bilateral  agreement,  which should
provide  for  a  free  and  non-taxable  transfer  of electricity
produced  by  the  generators of the company 'Mažeikių elektrinė'
through  this  distribution unit to a closed distribution of 6 kV
voltage of this power plant.
     13.   When   reorganising   the   special   purpose  company
'Lietuvos  energija',  the losses of taxes which originate in the
special  purpose  company  'Lietuvos energija' after deduction of
funds  allocated  for  investment  from  the  general income made
according  to  the method of calculation established in Item 2 of
Paragraph  1  of  Article  21  of  the Law on Taxes on Profits of
Legal    Persons   shall   be   proportionally   transferred   by
considering  a  part  of  value  of the long-term material assets
remaining  to  the  company  'Lietuvos  energija' which continues
its  activity  after  the  reorganisation  and transferred to the
companies   established  by  the  reorganisation,  to  which  the
method   of   calculation   of  funds  allocated  for  investment
established  in  Item  2  of Paragraph 1 of Article 21 of the Law
on Taxes on Profits of Legal Persons was applied."
     3.  The  doubts  of the petitioner concerning the compliance
of  the  disputed  articles  (parts  thereof)  of  the  Law  with
Article  23  of  the Constitution are based on the statement that
under  the  Law  the  special purpose company "Lietuvos energija"
was  reorganised  without  applying  the requirements of articles
(parts  thereof)  of  the Law on Companies which are specified in
Paragraph  2  of  Article  1  of  the  Law  and by applying other
articles  of  the  Law  on Companies and other laws to the extent
that  the  Law  does  not  provide  otherwise, but according to a
different  method,  which  is consolidated in the Law itself, and
according  to  a different procedure, which is established in the
Law   itself,  and  thus,  in  the  opinion  of  the  petitioner,
property   rights  of  the  shareholders  of  the  aforementioned
company have been violated (restricted).
     It  should  be  noted  that  the petitioner does not dispute
the  compliance  of  Paragraph 2 of Article 1 of the Law with the
Constitution.
     4.  Under  Article 23 of the Constitution, property shall be
inviolable  (Paragraph  1);  the  rights  of  ownership  shall be
protected  by  laws  (Paragraph  2);  property may only be seized
for  the  needs  of  society  in  accordance  with  the procedure
established   by   law   and  shall  be  justly  compensated  for
(Paragraph 3).
     5.  When  regulating economic activity so that it serves the
general  welfare  of  the  Nation,  the  state  (Paragraph  3  of
Article  46  of  the Constitution) may adopt decisions concerning
reorganisation  or  other  restructuring of enterprises belonging
(fully  or  partially)  to  the  state under the ownership right.
Such   decisions   usually   imply  the  establishment  of  equal
requirements  to  economic  entities  (enterprises). On the other
hand,  particularities  of  activity  of  individual enterprises,
especially   when  they  are  of  strategic  importance,  gain  a
dominant  role  in  production  or  the  market etc., may cause a
differentiated   legal  regulation  of  their  reorganisation  or
other  restructuring,  which  in  itself should not be considered
as  being  not  in line with the Constitution. However, it should
be    stressed    that   when   reorganising   or   restructuring
enterprises,  in  which  the  state has shares, in other way, one
may  not  violate  the rights (inter alia property rights) of the
shareholders.
     6.  In  Paragraph  1  of Article 2 of the Law inter alia one
has  consolidated  one  of the possible methods of reorganisation
of  the  special  purpose  company  "Lietuvos  energija":  it  is
reorganised  according  to the method of division of companies; a
rule  is  entrenched  in Paragraph 4 of Article 3 of the Law that
after   the   reorganisation   of  the  special  purpose  company
"Lietuvos  energija"  the  shares  owned  by  the shareholders of
this   company   shall   be  distributed  in  proportion  to  the
authorised  capitals  of  the  company  "Lietuvos energija" which
continues  its  activity  after  the reorganisation and companies
established  by  reorganisation;  in  Paragraph 2 of Article 3 of
the  Law  one  has  inter alia established a rule that the shares
of  the  companies  established  on  the  basis  of  property  of
affiliated  units  and  divisions  of the special purpose company
"Lietuvos  energija",  which  are  engaged in activity other than
the  principal  activity  of  the company, must be transferred to
the  shareholders  of  the  companies which are newly established
after  the  reorganisation  in proportion to the number of shares
of these companies owned by them.
     6.1.  The  fact  that  according  to  the  Law  the  special
purpose  company  "Lietuvos  energija"  is  reorganised under the
method  of  division  of  companies  should  not be considered in
itself as a violation of property rights of the shareholders.
     It  is  worth noticing that such method of reorganisation of
companies  was  defined  in Paragraph 1 of Article 63 (wording of
13  July  2000)  of  the Law on Companies, which was effective at
the time of coming into effect of the Law, as well.
     6.2.   The  fact  that  according  to  the  Law,  after  the
reorganisation   of   the   special   purpose  company  "Lietuvos
energija"  the  shares  owned by the shareholders of this company
are  distributed  in proportion to the authorised capitals of the
company  "Lietuvos  energija"  which continues its activity after
the  reorganisation  and companies established by reorganisation,
as  well  as  that  the shares of specified in this paragraph the
companies  established  on  the  basis  of property of affiliated
units  and  divisions  of  the  special purpose company "Lietuvos
energija",   which   are  engaged  in  activity  other  than  the
principal  activity,  must  be transferred to the shareholders of
the  companies  established  upon reorganisation in proportion to
the  number  of  shares of the company owned by them, should not,
in  itself,  be  considered a violation of property rights of the
shareholders,  as  in  the  aforementioned cases all shareholders
were  treated  equally, their shares have not been forfeited, the
administration  and  use  of  the  shares or disposal thereof has
not  been  restricted,  and  the  shareholders  did  not lose the
rights,   including  the  property  ones,  originating  from  the
possession of shares.
     It  should  be stressed that a possibility to apply the rule
of  proportionate  distribution  of  shares  was  provided for in
Paragraph  2  of  Article 64 (wording of 13 July 2000) of the Law
on  Companies  which  was  effective at the moment of coming into
effect of the Law, as well.
     7.  Having  taken  account  of the aforementioned arguments,
one  should  conclude  that  the  following provisions are not in
conflict with Article 23 of the Constitution:
     1)  the  provision  of  Paragraph  1 of Article 2 of the Law
that   the   special   purpose  company  "Lietuvos  energija"  is
reorganised according to the method of division of companies;
     2)  the  provision  of  Paragraph  2 of Article 3 of the Law
that   the  shares  of  specified  in  this  paragraph  companies
established  on  the  basis  of  property of affiliated units and
divisions  of  the  special  purpose company "Lietuvos energija",
which   are   engaged   in  activity  other  than  the  principal
activity,  must  be  transferred to the shareholders of companies
established  upon  reorganisation  in proportion to the number of
shares of the company owned by them;
     3)  the  provision  of  Paragraph  4 of Article 3 of the Law
that   upon   reorganisation   of  the  special  purpose  company
"Lietuvos  energija"  the  shares  of  the  shareholders  of this
company   are   distributed   in  proportion  to  the  authorised
capitals  of  the company "Lietuvos energija" which continues its
activity  after  reorganisation  and  the  companies  established
under the reorganisation.
  
     Conforming  to  Articles  102 and 105 of the Constitution of
the  Republic  of Lithuania and Articles 1, 53, 54, 55, and 56 of
the   Law   on  the  Constitutional  Court  of  the  Republic  of
Lithuania,   the   Constitutional   Court   of  the  Republic  of
Lithuania has passed the following

                             ruling:                             

     1.  To  recognise  that  the  provision  of  Paragraph  1 of
Article  2  of the Republic of Lithuania Law on Reorganisation of
the  Special  Purpose  Company "Lietuvos energija" (wording of 28
June  2001)  that the special purpose company "Lietuvos energija"
is  reorganised  according to the method of division of companies
is  not  conflict  with  the  Constitution  of  the  Republic  of
Lithuania.
     2.  To  recognise  that that the provision of Paragraph 2 of
Article  3  of the Republic of Lithuania Law on Reorganisation of
the  Special  Purpose  Company "Lietuvos energija" (wording of 28
June  2001)  that  the  shares  of  specified  in  this paragraph
companies  established  on  the  basis  of property of affiliated
units  and  divisions  of  the  special purpose company "Lietuvos
energija",   which   are  engaged  in  activity  other  than  the
principal  activity,  must  be transferred to the shareholders of
companies  established  upon  reorganisation in proportion to the
number  of  shares  of  the  company  owned  by  them  is  not in
conflict with the Constitution of the Republic of Lithuania.
     3.  To  recognise  that that the provision of Paragraph 4 of
Article  3  of the Republic of Lithuania Law on Reorganisation of
the  Special  Purpose  Company "Lietuvos energija" (wording of 28
June  2001)  that  upon  reorganisation  of  the  special purpose
company  "Lietuvos  energija"  the  shares of the shareholders of
this  company  are  distributed  in  proportion to the authorised
capitals  of  the company "Lietuvos energija" which continues its
activity  after  reorganisation  and  the  companies  established
under   the   reorganisation   is   not   in  conflict  with  the
Constitution of the Republic of Lithuania.
  
     This  ruling  of  the  Constitutional Court is final and not
subject to appeal.
     The  ruling  is  promulgated  in the name of the Republic of
Lithuania.
  
Justices of the Constitutional Court:	Armanas Abramavičius
					Egidijus Jarašiūnas
					Egidijus Kūris
					Kęstutis Lapinskas
					Zenonas Namavičius
					Augustinas Normantas
					Jonas Prapiestis
					Vytautas Sinkevičius
					Stasys Stačiokas