Case No. 38/06
THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA
RULING
ON THE COMPLIANCE OF PARAGRAPH 2 (WORDING OF 18 DECEMBER
2003) OF ARTICLE 9 OF THE REPUBLIC OF LITHUANIA LAW ON
STATE DEBT WITH THE CONSTITUTION OF THE REPUBLIC OF
LITHUANIA
30 June 2008
Vilnius
The Constitutional Court of the Republic of Lithuania,
composed of the Justices of the Constitutional Court Armanas
Abramavičius, Toma Birmontienė, Pranas Kuconis, Kęstutis
Lapinskas, Zenonas Namavičius, Ramutė Ruškytė, Egidijus Šileikis,
Algirdas Taminskas, and Romualdas Kęstutis Urbaitis,
with the secretary of the hearingDaiva Pitrėnaitė,
in the presence of the representatives of the Seimas of the
Republic of Lithuania, the party concerned, who were Raimundas
Palaitis, a Member of the Seimas, and Sigita Krutkevičienė, a
senior advisor of the Legal Department of the Office of the
Seimas,
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, in its public
hearing on 10 June 2008 heard constitutional justice case No.
38/06 subsequent to the petition of the Vilnius Regional
Administrative Court, the petitioner, requesting to investigate
whether the provision "decisions of the Ministry of Finance
regarding the recovery of a debt from the debtor <...> shall be
passed to court bailiffs in accordance with the procedure laid
down by the Code of Civil Procedure" of Paragraph 2 (wording of
18 December 2003) of Article 9 of the Republic of Lithuania Law
on State Debt is not in conflict with Paragraph 1 of Article 29,
Paragraph 1 of Article 30 and Paragraphs 1 and 3 of Article 46 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 said court
suspended the consideration of the case and applied to the
Constitutional Court with the petition requesting to investigate
whether the provision "decisions of the Ministry of Finance
regarding the recovery of a debt from the debtor <...> shall be
passed to court bailiffs in accordance with the procedure laid
down by the Code of Civil Procedure" of Paragraph 2 (wording of
18 December 2003) of Article 9 of the Law on State Debt
(hereinafter also referred to as the Law) is not in conflict with
Paragraph 1 of Article 29, Paragraph 1 of Article 30 and
Paragraphs 1 and 3 of Article 46 of the Constitution.
II
The petition of the petitioner is grounded on the following
arguments.
1. Paragraph 2 (wording of 18 December 2003) of Article 9 of
the Law on State Debt enshrines the provision that the decisions
of the Ministry of Finance regarding the recovery of the debt
from the debtor, or from the debtor the fulfilment of obligations
whereof is guaranteed by the state, shall be passed to court
bailiffs in accordance with the procedure laid down by the Code
of Civil Procedure of the Republic of Lithuania (hereinafter also
referred to as the CCP). In the opinion of the petitioner, when
the Ministry of Finance adopts a decision to recover a debt
"under non-dispute procedure", the right of a person to apply to
court is violated. Such provision, according to which the
decision of the Ministry of Finance regarding the recovery of a
debt from the debtor is executed under the execution procedure
established in the CCP, is in conflict with Paragraph 1 of
Article 30 of the Constitution.
2. While grounding his doubts regarding the compliance of
the provision enshrined in Paragraph 2 (wording of 18 December
2003) of Article 9 of the Law on State Debt with the principle of
equality of all persons before the law, the court, and other
state institutions or officials, and with Paragraph 3 of Article
46 of the Constitution, the petitioner refers to the official
constitutional doctrine formulated in the Constitutional Court
ruling of 28 February 1996: "The principle that all people shall
be equal before the law, the court, and other state institutions
and officers is one of the primary principles which in its own
turn is closely linked with the remaining constitutional
principles and provisions. When interpreting the contents of the
provision of Part 1, Article 29 of the Constitution, it is
impossible not to consider the provision of Part 3, Article 46 of
the Constitution which stipulates that the state shall regulate
economic activity so that it serves the general welfare of the
people. The aforementioned provisions by determining each other
form constitutional pre-conditions to pass laws which respond to
the conditions of national economy, the diversity and change of
economical and social life. Assessing whether an established
different legal regulation is a grounded one, particular legal
circumstances must be taken into account. First of all
differences of legal situation of subjects and objects to which
different legal regulation is applied must be considered;
secondly, one has to take into account the conformity of legal
acts to their hierarchy, scope of regulation, etc.; thirdly, one
must assess if legal norms which establish special conditions
answer the purpose and aim of the legal act. Validity of
individual legal norms may be convincing only in the case that
all aforementioned circumstances were taken into account. Should
only one condition be ignored, doubts might arise concerning the
compliance of a special legal norm with constitutional
provisions".
3. The petitioner did not submit any arguments regarding the
incompliance of the provision enshrined in Paragraph 2 (wording
of 18 December 2003) of Article 9 of the Law on State Debt with
Paragraph 1 of Article 46 of the Constitution.
III
In the course of preparation of the case for the
Constitutional Court hearing, written explanations were received
from the representatives of the Seimas, the party concerned, who
was the Member of the Seimas R. Palaitis, S. Krutkevičienė, chief
specialist and V. Račkauskienė, a senior advisor of the Legal
Department of the Office of the Seimas, in which it is stated
that the disputed provision of the Law is not in conflict with
the Constitution. The position of the representatives of the
Seimas, the party concerned, is based on the following arguments.
1. The legislator, seeking to implement the purposes of
borrowing on behalf of the state and provision of state
guarantees, also provided for the sanctions for the belated
repayment of loan or debt and the corresponding legal means of
control and returning of the lent funds. One of such means of
control and financial supervision is the disputed provision of
the Law on State Debt, permitting to pass the decisions of the
Ministry of Finance regarding the recovery of the debt from the
debtor, or from the debtor the fulfilment of obligations whereof
is guaranteed by the state, to court bailiffs for execution in
accordance with the procedure laid down by the CCP. In this case,
the state, as one of the participants of financial legal
relations, is provided with bigger powers and rights than other
participants of these financial legal relations. This happens
because of the fact that the state, which, in these relations, is
represented by the competent institutions, must ensure not only
the interests of single persons, but also the interests of the
entire society. Therefore, "the legislator enshrined the
application of non-dispute procedure while recovering the sums of
debts which are unpaid or paid not on time". While enshrining the
disputed legal regulation, the legislator implemented the
provisions of Article 46 of the Constitution which grant to the
state the right to regulate the economic activity so that it
serves the general welfare of the Nation and that the interests
of the members of the society (including the consumers) are
defended.
If the debtors do not return the loans to the state which
were granted to them from the funds borrowed on behalf of the
state, or if the debtors, the fulfilment of obligations whereof
is guaranteed by the state, do not return the debt, the state
must cover its obligations to the creditors from its own
financial resources by correspondingly reducing the financing
from the state budget to other spheres. Therefore, if the debtors
do not fulfil their obligations to the state, the interests of
the entire society are violated.
2. The debtor has the right to apply to court and to lodge a
complaint against each decision on the recovery of debt adopted
by the Ministry of Finance, if he thinks that such decision is
groundless and unlawful.
IV
In the course of the preparation of the case for the
Constitutional Court hearing, written explanations were received
from R. Šadžius, Vice-Minister of the Ministry of Finance of the
Republic of Lithuania, and P. Koverovas, State Secretary of the
Ministry of Justice of the Republic of Lithuania.
V
At the Constitutional Court hearing, the representatives of
the Seimas, the party concerned, who were the Member of the
Seimas R. Palaitis and S. Krutkevičienė, virtually reiterated the
arguments set forth in their written explanations, as well as
presented additional explanations.
The Constitutional Court
holds that:
1. The Vilnius Regional Court, the petitioner, requests to
investigate whether the provision "decisions of the Ministry of
Finance regarding the recovery of a debt from the debtor <...>
shall be passed to court bailiffs in accordance with the
procedure laid down by the Code of Civil Procedure" of Paragraph
2 (wording of 18 December 2003) of Article 9 of the Law on State
Debt is not in conflict with Paragraph 1 of Article 29, Paragraph
1 of Article 30 and Paragraphs 1 and 3 of Article 46 of the
Constitution.
The Vilnius Regional Court, the petitioner, did not present
the arguments which would ground the position that the provision
"decisions of the Ministry of Finance regarding the recovery of a
debt from the debtor <...> shall be passed to court bailiffs in
accordance with the procedure laid down by the Code of Civil
Procedure" of Paragraph 2 (wording of 18 December 2003) of
Article 9 of the Law may be in conflict with Paragraph 1 of
Article 46 of the Constitution, therefore, it needs to be held
that the petitioner does not dispute the compliance of this
provision of the Law with Paragraph 1 of Article 46 of the
Constitution.
2. On 22 August 1996, the Seimas adopted the Law on State
Debt which came into force on 13 September 1996.
On 7 July 1999, the Seimas adopted the Republic of Lithuania
Law on Amending the Law on State Debt, by Article 1 of which the
Law on State Debt (wording of 22 August 1996 with subsequent
amendments and supplements) was set forth in a new wording. The
Law on State Debt of the new wording came into force on 30 July
1999.
When the Seimas adopted the Republic of Lithuania Law on
Amending and Supplementing the Law on State Debt on 17 April
2001, which came into force on 9 May 2001, Paragraph 2 (wording
of 17 April 2001) of Article 10 of the Law on State Debt inter
alia enshrined such provision: "The decisions of the Ministry of
Finance regarding the recovery of the debt from the debtor, or
from the debtor the fulfilment of obligations whereof is
guaranteed by the State, shall be passed to court bailiffs in
accordance with the procedure laid down by the Code of Civil
Procedure of the Republic of Lithuania."
2.1. By Article 1 of the Republic of Lithuania Law on
Amending the Law on State Debt which was adopted by the Seimas on
18 December 2003, the Law on State Debt (wording of 7 July 1999
with subsequent amendments and supplements) was set forth in a
new wording. The Law on State Debt of the new wording came into
force on 7 January 2004.
2.2. Paragraph 2 (wording of 18 December 2003) of Article 9
of the Law, in which inter alia the provision disputed by the
petitioner is enshrined, established the following: "The Ministry
of Finance shall have the right to recover a loan or debt or part
thereof, which has not been returned on time, unpaid interest,
late payment interest or other payments provided for in
agreements as well as the expenses incurred by the State, from
the debtor or the debtor the fulfilment of obligations whereof is
guaranteed by the State, because of non-fulfilment of property
obligations by the debtor. Where the debtor, the fulfilment of
obligations whereof is guaranteed by the State, defaults on
contractual obligations, as a result whereof the State, as the
guarantor, has to fulfil them, the Ministry of Finance shall
acquire the right of recourse against the debtor the fulfilment
of obligations whereof is guaranteed by the State to recover all
the direct and indirect expenses linked to the fulfilment of the
said obligations. Decisions of the Ministry of Finance regarding
the recovery of the debt from the debtor, or from the debtor the
fulfilment of obligations whereof is guaranteed by the State,
shall be passed to court bailiffs in accordance with the
procedure laid down by the Code of Civil Procedure."
2.3. By Article 1 of the Republic of Lithuania Law on
Amending the Law on State Debt which was adopted by the Seimas on
16 June 2005, the Law on State Debt (wording of 18 December 2003)
was set forth in a new wording. The Law on State Debt of the new
wording came into force on 1 September 2005 (Article 2 of the Law
on Amending the Law on State Debt). Paragraph 2 (wording of 16
June 2005) of Article 10 of the Law inter alia enshrines the
provision: "Decisions of the Ministry of Finance regarding the
recovery of the debt from the debtor, or from the debtor the
fulfilment of obligations whereof is guaranteed by the State,
shall be passed to bailiffs in accordance with the procedure laid
down by the Code of Civil Procedure".
2.4. It needs to be held that after the Law on State Debt
was set forth in a new wording, Paragraph 2 (wording of 16 June
2005) of Article 10 thereof enshrined the provision which was
virtually analogous to the provision (of Paragraph 2 (wording of
18 December 2003) of Article 9 of the Law) which is disputed by
the petitioner. Paragraph 2 (wording of 16 June 2005) of Article
10 of the Law has not been amended or supplemented.
3. In this constitutional justice case, the petitioner
disputes the compliance of the provision "decisions of the
Ministry of Finance regarding the recovery of a debt from the
debtor <...> shall be passed to court bailiffs in accordance with
the procedure laid down by the Code of Civil Procedure" of
Paragraph 2 (wording of 18 December 2003) of Article 9 of the Law
with Paragraph 1 of Article 29, Paragraph 1 of Article 30 and
Paragraph 3 of Article 46 of the Constitution.
3.1. The provisions of all paragraphs of Article 46 of the
Constitution, which enshrines the constitutional basis of the
economic activity, are interrelated and supplement one another.
The principles established therein are coordinated, there is a
balance among them, and each of these constitutional principles
must be construed without denying another constitutional
principle (Constitutional Court rulings of 6 October 1999, 17
March 2003 and 13 May 2005).
The provision of Paragraph 3 of Article 46 of the
Constitution that the state shall regulate economic activity so
that it serves the general welfare of the Nation implies the duty
of the state as well as state institutions which implement the
state power and other state institutions, while heeding the norms
and principles of the Constitution and taking account of the
situation of the national economy, the variety and changes in the
economy and social life, to establish such legal regulation of
the economic activity which would serve the general welfare of
the Nation. The Constitutional Court has held in its acts more
than once that Paragraph 3 of Article 46 of the Constitution
enshrines the constitutional principle which outlines the
directions, ways and boundaries of the regulation of economic
activity. While regulating economic activity, the state has to
follow the principle of coordination of interests of the person
and society and has to guarantee the interests of both the
private person (a subject of economic activity) and the society.
The Constitution enshrines the obligation of the state to
seek the general welfare of the Nation (Constitutional Court
ruling of 13 May 2005). The general welfare of the Nation is a
rather general and broad criterion and in its application one may
base oneself inter alia on the arguments of purposiveness; the
content of the notion "general welfare of the Nation" is revealed
in each concrete case by taking account of economic, social and
other important factors; by means of regulation of economic
activity the state must seek the welfare of not individual
persons but precisely the general welfare of the Nation; it is
not permitted that the regulation by which the rights and
legitimate interests of a certain economic entity are limited
more than necessary to ensure the public interest and to protect
constitutional values be grounded upon or justified by the
general welfare of the Nation indicated in Paragraph 3 of Article
46 of the Constitution (Constitutional Court rulings of 13
February 1997, 6 October 1999, 18 October 2000, 9 April 2002, 26
January 2004, 13 May 2005 and 30 March 2006).
In the jurisprudence of the Constitutional Court it has been
held that the implementation of the interest of society which is
recognised by the state and is protected by law is one of the
most important conditions of existence and evolution of society
itself (Constitutional Court rulings of 6 May 1997, 13 May 2005
and 21 September 2007). The public interest is dynamic and
subject to change (Constitutional Court rulings of 8 July 2005,
21 September 2006 and 15 May 2007), therefore, the state may, and
in certain cases, must change (expand, abridge or correct
otherwise) the regulation of the economic activity.
It needs to be emphasised that, under the Constitution, the
Seimas as the institution of legislative power and the Government
as an institution of executive power enjoy very broad discretion
to form and execute the economic policy of the state (each within
its competence) and to correspondingly regulate economic
activities by means of legal acts, of course, by not violating
the Constitution and laws, inter alia by not exceeding the powers
established in them to the said institutions of state power and
by following the principles of a state under the rule of law,
separation of powers, responsible governance, protection of
legitimate expectations and the principles of legal clarity,
certainty and security as entrenched in the Constitution, and the
requirements of the proper legal process which stem from the
Constitution.
Regulation of economic activity is linked with establishment
of conditions for economic activity, regulation of certain
procedures, control of economic activity, as well as with certain
limitations and prohibitions of this activity (Constitutional
Court rulings of 13 May 2005 and 5 March 2008). Legal regulation
of economic activity is not an end in itself, it is a means of
social engineering and a way to seek welfare of the Nation
through lawit is a guideline of the legal of economic activity
(Constitutional Court ruling of 13 May 2005).
3.2. While construing the legal regulation entrenched in
Paragraph 2 of Article 46 of the Constitution, the Constitutional
Court has held that the provision "the State shall support
economic efforts and initiatives that are useful to the society"
of this paragraph means that the Constitution provides for an
opportunity of state institutions to assess areas of economic
activity according to their use to society, that it is permitted
to support certain areas of economic activity or certain economic
efforts only upon such assessment, also that that such assessment
of economic activity creates necessary preconditions for the
state to regulate economic activity so that is serves the general
welfare of the Nation (Constitutional Court rulings of 13
February 1997 and 13 May 2005).
It needs to be noted that under the Constitution, while
satisfying the public interest, the state may choose various
forms of supporting economic efforts and initiatives. One of them
may be the support provided by the state for economic entities,
inter alia the state loan. The purpose of providing such support
for economic entities is to satisfy the public interest.
The state support for the economic entities is determined by
various factors, inter alia the economic situation of the state,
the priorities of the development of state's economy, the
necessity to support certain social projects which are useful for
the society while seeking for the general welfare of the Nation.
Under the Constitution, the state support provided to the
economic entities, inter alia a state loan, must be grounded on
the law. The laws must inter alia establish the state
institutions which have the right to adopt decisions regarding
granting the loan, as well as the grounds of such provision of
support. While regulating the support of economic efforts and
initiative useful for society, as well as provision of the state
loan, the legislator is bound by the requirements which stem from
the Constitution, inter alia the principles of responsible
governance, transparency, lawfulness, equality of rights and fair
competition.
While regulating the provision of the state support, inter
alia the state loan, to economic entities, one may not establish
any such legal regulation, whereby the economic entities would be
granted privileges or their initiative would be restricted.
In this context one is to take account of the fact that, as
the Constitutional Court held in its rulings of 30 September
2003, 8 July 2005, 5 July 2007 and 20 March 2008, it is not
permitted to establish any such legal regulation, according to
which, the property that belongs to the state by right of
ownership would be possessed, used or disposed of in such a
manner so that the interests or needs of only one social group or
individual persons are satisfied and that this property does not
serve the public interest, the need of society, and the welfare
of the Nation.
The relations regarding the loan which emerge between the
state and a person (economic entity) must be based inter alia on
the principle of freedom to make agreements, which is to be
assessed as the guarantee of the constitutional level. The
freedom to make an agreement is, first of all, free expression of
will of its parties in attempt to make the agreement
(Constitutional Court ruling of 30 November 1996). It is the
right of the parties to independently decide the questions of the
content of an agreement by not violating the requirements which
stem from the Constitution, the corresponding provisions of the
laws which are not in conflict with the Constitution and by not
restricting the rights and freedoms of other persons.
It also needs to be noted that a person (economic entity),
while making use of the support of the state, inter alia the
state loan, must follow the assumed obligations by not abusing
law; one must ensure the control of proper use of such support
and its returning in time.
In the context of the constitutional justice case at issue,
it needs to be noted that in those cases, when a person (an
economic entity), after having received the state loan, does not
fulfil the obligations which stem from the agreement and laws,
one must establish the means for ensuring the fulfilment of such
obligations, inter alia the returning of the loan (and the
expenses of the state linked to that loan). One of them may be
execution of the decision of the state institution established by
the legislator regarding the recovery of the state loan (and the
expenses of the state linked to that loan). Peculiarities of the
execution of the decision regarding the recovery of the state
loan (and the expenses of the state linked to that loan) must be
established by means of a law. It needs to be noted that in
general, no prohibition stems from the Constitution to establish
such legal regulation that the execution procedure would be
instituted not only on the grounds of court decisions, but also
on the grounds of decisions of other state institutions
(officials) provided for in laws. By regulating the execution
procedure by means of a law, one must seek its expedition,
efficiency, and no preconditions are to be created for
procrastination of execution of decisions and abuse of law. In
all cases when the legislator establishes the peculiarities of
execution of the decision regarding the recovery of the state
loan (and the expenses of the state linked to that loan), one
must not deny the right of a person to apply to court regarding
the defence of, in his opinion, violated rights, and one must not
deny the constitutional purpose of the court to administer
justice. In order to ensure the lawfulness of the execution
procedure, one must enshrine an effective judicial control of the
execution procedure (there may be various forms of such control),
by exercising which the court could decide all the questions
(disputes) arising during the execution procedure. The main
purpose of such control is to ensure the lawfulness, efficiency
of the execution procedure and the defence of violated rights of
a person.
When regulating the execution of the decision regarding the
recovery of the state loan (and the expenses of the state linked
to that loan), the legislator must heed the imperatives which
stem from the Constitution, inter alia the provisions of Articles
29 and 30 of the Constitution.
3.3. Paragraph 1 of Article 30 of the Constitution provides:
"The person whose constitutional rights or freedoms are violated
shall have the right to apply to court". In its rulings, the
Constitutional Court has held more than once that the right to
apply to court is absolute and it is not permitted to restrict or
to deny it; under the Constitution, the legislator has the duty
to establish such legal regulation, whereby all disputes
regarding violation of rights or freedoms of a person could be
decided in court; the rights of the person must be protected not
formally, but in reality and in an effective manner against
unlawful actions of private persons as well as against those of
state institutions or officials. The right to apply to court
inter alia also implies the requirements of proper legal
procedure which is one of the essential elements of the
constitutional principle of a state under the rule of law.
In the context of the constitutional justice case at issue,
it needs to be noted that the right of a person, who thinks that
his rights are violated, to apply to court also includes the
right of a person (economic entity) who received the state loan,
to appeal to court against a decision of the state institution
established by the legislator regarding the recovery of the state
loan (and the expenses of the state linked to that loan) and the
execution of such decision.
3.4. Paragraph 1 of Article 29 of the Constitution provides:
"All persons shall be equal before the law, the court, and other
State institutions and officials". The principle of equality of
persons before the law which is enshrined in the Constitution,
inter alia in Paragraph 1 of its Article 29, is one of the main
constitutional principles which, as it has been held by the
Constitutional Court in its rulings, must also be followed while
passing laws and applying them, and while administering justice;
it also needs to be noted that the principle of equality of all
persons before the law does not deny the fact that the law may
establish a different legal regulation with regard to categories
of certain persons which are in different situations. The
constitutional principle of equality of all persons before the
law inter alia would not be violated, if by means of a different
(differentiated) legal regulation, whereby special requirements
or certain conditions linked to the peculiarities of the
regulated relations are established, one would seek for positive
and socially significant objectives. The problem of equality of
persons in the laws cannot be adequately decided without
assessment of the fact in each case whether peculiarities of
legal regulation are reasonably established in respect to these
persons (Constitutional Court rulings of 13 November 1997 and 23
October 2002).
Under the Constitution, while regulating the economic
activity, inter alia the provision of state support to economic
entities, the state must heed the constitutional principle of
equal rights of economic entities which is directly related to
the principle of equality of persons before the law which is
enshrined in the Constitution, inter alia in Paragraph 1 of
Article 29 thereof; otherwise, the legal regulation of the
economic activity would not be considered as serving the general
welfare of the Nation.
4. The provision "decisions of the Ministry of Finance
regarding the recovery of a debt from the debtor <...> shall be
passed to court bailiffs in accordance with the procedure laid
down by the Code of Civil Procedure" of Paragraph 2 (wording of
18 December 2003) of Article 9 of the Law which is disputed in
this constitutional justice case, is to be construed in the
context of the provisions of the Law, the CCP and the Republic of
Lithuania Law on the Proceedings of Administrative Cases.
4.1. Under Article 1 (wording of 18 December 2003) of the
Law, this law shall regulate: borrowing by the Government on
behalf of the state; the relations linked to the state's right of
claim in respect of debtors; and the relations linked to the
state's right of claim in respect of debtors the fulfilment of
obligations whereof is guaranteed by the state.
In this context it needs to be noted that a debtor means a
legal or a natural person of the Republic of Lithuania, who has
received a loan from the funds borrowed on behalf of the state
under a loan agreement concluded with the state or under other
debt instruments and who assumes the obligation to the state
regarding the use and returning thereof (Paragraph 12 (wording of
18 December 2003) of Article 2 of the Law). A debtor, the
fulfilment of obligations whereof is guaranteed by the state,
means a legal or a natural person of the Republic of Lithuania,
who has received a loan under an agreement concluded with a
domestic or foreign creditor or under other debt instruments the
meeting of terms and conditions whereof is guaranteed by the
state (Paragraph 13 (wording of 18 December 2003) of Article 2 of
the Law).
4.2. The powers of the Ministry of Finance, as the
institution empowered by the state, in the relations of provision
of the state loan were enshrined in the Law (wording of 18
December 2003), inter alia in Paragraphs 3 and 4 of Article 3,
Paragraph 7 of Article 5, Paragraphs 2, 4 and 5 of Article 9,
etc. Article 9 (wording of 18 December 2003) of the Law provides
for the measures (actions) which are applied (taken) by the
Ministry of Finance, if the corresponding obligations are not
fulfilled or they are fulfilled improperly.
Under Paragraph 2 (wording of 18 December 2003) of Article 9
of the Law, which includes the provision disputed by the
petitioner, the Ministry of Finance had the powers to recover
from the debtor a loan or debt or part thereof which has not been
returned on time, unpaid interest, late payment interest or other
payments provided for under agreements as well as the expenses
incurred by the state because of non-fulfilment of an obligation
by the debtor. Where the debtor, the fulfilment of obligations
whereof is guaranteed by the state, defaulted on contractual
obligations, as a result whereof the state, as the guarantor, had
to fulfil them, the Ministry of Finance acquired the right of
recourse against the debtor, the fulfilment of obligations
whereof is guaranteed by the state, to recover all the direct and
indirect expenses linked to the fulfilment of the said
obligations. In these cases, the Ministry of Finance had the
powers to adopt decisions regarding the recovery of the debt from
the debtor, or from the debtor the fulfilment of obligations
whereof is guaranteed by the state, which had to be passed to
court bailiffs in accordance with the procedure laid down by the
CCP.
Therefore, under the provisions of the Law, the state loan
could be provided only on the grounds of the agreement concluded
by the person (economic entity) and the institution empowered by
the state (inter alia the Ministry of Finance). By concluding the
agreement regarding the loan, the economic entity (debtor)
assumed the obligations and agreed with certain conditions of
provision of the loan, inter alia those provided for in the Law,
as, for instance, with the fact that if he does not return the
loan in time, the decision of the Ministry of Finance regarding
the recovery of a debt will be implemented under the procedure
established by the CCP.
4.3. In this constitutional justice case, the Vilnius
Regional Court, the petitioner, doubts whether after the
legislator enshrines the provision that the decisions of the
Ministry of Finance regarding the recovery of a debt from the
debtor shall be passed to court bailiffs in accordance with the
procedure laid down by the CCP, the constitutional right of a
person to apply to court is not restricted. In this context, it
needs to be noted that the decisions of the Ministry of Finance
are administrative acts adopted by a subject of public
administration which may be appealed against under the procedure
established in the Law on the Proceedings of Administrative
Cases. Item 1 (wording of 19 September 2000) of Paragraph 1 of
Article 15 of the Law on the Proceedings of Administrative Cases
provides that administrative courts shall decide cases regarding
the lawfulness and reasonableness of the legal acts and actions
adopted by subjects of public administration, as well as
regarding the lawfulness and reasonableness of refusals of these
subjects to perform the actions which are attributed to their
competence or procrastination to performs such actions; under
Paragraph 1 (wording of 19 September 2000) of Article 22 of this
law, the persons may lodge a complaint (request) regarding an
administrative act adopted by an administrative subject of public
or internal administration or his action (inaction) when they
think that their rights or interests which are protected by the
laws are violated. It also needs to be noted that Paragraph 1
(wording of 19 September 2000) of Article 71 of the Law on the
Proceedings of Administrative Cases inter alia provides that the
court or judge may take up measures to ensure the requirement on
the grounds of the reasoned request of the participants of the
procedure or on his own initiative. Under Paragraph 2 (wording of
19 September 2000) of Article 71 of this law, the measures for
ensuring the requirement may be inter alia the suspension of
recovery according to the writ of execution (Item 2) and
temporary suspension of the validity of the disputed act (Item
3).
The decisions of the Ministry of Finance regarding the
recovery of a debt from the debtor under Item 2 of Paragraph 2 of
Article 584 and Item 4 of Article 587 of the CCP are to be
considered as decisions of institutions which at the same time
are both as the writs to be enforced and as writs of execution on
the grounds of which the coercive execution actions provided in
the CCP are performed. According to the provisions of the CCP,
the rights of a person which were violated during the execution
procedure may be defended, inter alia by lodging a complaint to
court against the actions of bailiffs under procedure established
in the CCP (Article 510). Even though lodging a complaint does
not in itself suspend the execution of the actions, the court,
after it has recognised it to be necessary, has the right to
suspend the execution actions under the procedure established in
the CCP (Item 10 of Paragraph 1 of Article 145, and Article 510
of the CCP).
4.4. In the context of the constitutional justice case at
issue, it needs to be noted that, under the CCP, the execution
procedure may be started not only after the court has adopted a
decision, but alsoin the cases provided for by laws and in the
absence of such a decisionon the grounds of decisions of the
state institutions (officials) specified in laws. The execution
procedure of such writs of execution is linked to expeditious
enforcement of the said writs in order to prevent procrastination
of execution procedure. The execution procedure instituted both
on the grounds of a court decision and on the grounds of writs of
executiondecisions of the state institutions (officials)
implemented according to the same rules established in the CCP
and the same principles.
While regulating the relations linked to execution
procedure, the subjects of law-making must heed the
constitutional requirement of proper legal procedure, inter alia
one must ensure the judicial control of execution procedure, as
well as the imperative of the constitutional right of a person to
judicial defence.
Institution of the execution procedure on the ground of
decisions of the state institutions (officials) established in
laws is not a novel of the Lithuanian legal systemit is also
typical of the law of certain Member States of the European Union
(as for instance, Austria, the Netherlands, Italy, France, etc.).
5. Summing up, it needs to be held that the provision which
is disputed by the petitioner, whereby the decisions of the
Ministry of Finance regarding the recovery of a debt from the
debtor shall be passed to the court bailiffs for execution under
the procedure established in the CCP, does not prevent a person,
who thinks that by the decision of the Ministry of Finance, his
rights are violated, from applying to court. The person can lodge
a complaint against such a decision of the Ministry of Finance
with a court. If necessary, the court may (by a reasoned
decision) temporarily suspend the validity of such decision of
the Ministry of Finance. The person may also lodge a complaint
against the execution procedure (recovery) instituted on the
grounds of the decision of the Ministry of Finance to court,
while the court, in such case, may, if necessary, suspend the
actions (recovery) of such execution. By the provision "decisions
of the Ministry of Finance regarding the recovery of a debt from
the debtor <...> shall be passed to court bailiffs in accordance
with the procedure laid down by the Code of Civil Procedure" of
Paragraph 2 (wording of 18 December 2003) of Article 9 of the
Law, which is disputed in this constitutional justice case, one
does not restrict the right of a person (economic entity) who has
received the state loan to apply to court, inter alia to dispute
the decision of the Ministry of Finance regarding the recovery of
the debt and the execution procedure instituted on such ground,
therefore, by such legal regulation one does not deviate from the
constitutional right of a person to apply to court which is
enshrined in Paragraph 1 of Article 30 of the Constitution.
It also needs to be noted that the provision "decisions of
the Ministry of Finance regarding the recovery of a debt from the
debtor <...> shall be passed to court bailiffs in accordance with
the procedure laid down by the Code of Civil Procedure" of
Paragraph 2 (wording of 18 December 2003) of Article 9 of the Law
is to be applied to all debtors who have not returned the loan on
time or who have not fulfilled other property obligations
established in the loan agreements. Therefore, by the disputed
legal regulation one does not create any preconditions to
discriminate or to privilege the persons of the same legal
status, therefore, one also does not deviate from the principle
of equality of all persons which is enshrined in the
Constitution, inter alia Paragraph 1 of Article 29 thereof.
Also there are not enough legal arguments which would ground
the position of the petitioner that, purportedly, by the disputed
legal regulation, one denies the principle enshrined in Paragraph
3 of Article 46 of the Constitution that the state shall regulate
economic activity so that it serves the general welfare of the
Nation.
6. Taking account of the arguments set forth, a conclusion
is to be drawn that the provision "decisions of the Ministry of
Finance regarding the recovery of a debt from the debtor <...>
shall be passed to court bailiffs in accordance with the
procedure laid down by the Code of Civil Procedure" of Paragraph
2 (wording of 18 December 2003) of Article 9 of the Law was not
in conflict with Paragraph 1 of Article 29, Paragraph 1 of
Article 30 and Paragraph 3 of Article 46 of the Constitution.
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:
To recognise that the provision "decisions of the Ministry
of Finance regarding the recovery of a debt from the debtor <...>
shall be passed to court bailiffs in accordance with the
procedure laid down by the Code of Civil Procedure" of Paragraph
2 (wording of 18 December 2003, Official Gazette Valstybės
žinios, 2004, No. 4-31) of Article 9 of the Republic of Lithuania
Law on State Debt was 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
Toma Birmontienė
Kęstutis Lapinskas
Zenonas Namavičius
Egidijus Šileikis
Algirdas Taminskas
Romualdas Kęstutis Urbaitis