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On accepting a petition of the petitioner

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 DECISION

ON THE PETITION OF A GROUP OF MEMBERS OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA, THE PETITIONER, REQUESTING TO INVESTIGATE THE COMPLIANCE OF THE PROVISIONS OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA RESOLUTION (NO. 665) “ON APPROVING THE DESCRIPTION OF THE PROCEDURE FOR IMPLEMENTATION OF THE PROPERTY AND NON-PROPERTY RIGHTS OF THE STATE IN STATE-MANAGED ENTERPRISES” WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA AND LAWS

 11 December 2012

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court Egidijus Bieliūnas, Toma Birmontienė, Pranas Kuconis, Gediminas Mesonis, Ramutė Ruškytė, Egidijus Šileikis, Algirdas Taminskas, Romualdas Kęstutis Urbaitis, and Dainius Žalimas,

with the secretary—Daiva Pitrėnaitė,

in a procedural sitting of the Constitutional Court considered the petition (No. 1B-34/2012) of a group of Members of the Seimas of the Republic of Lithuania, the petitioner, requesting to investigate whether “Item 4 of the Government Resolution (No. 665) “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 and Items 5, 15.1, 15.2, 24, 42.1, 54, 58, 69.8 and Section XII of the Description approved by the aforesaid item, according to the extent of regulation and content of the norms, are not in conflict with the Constitution—the principles of a state under the rule of law, hierarchy of legal acts, constitutional proportionality and coordination of interests of the person and society that are consolidated in the Constitution, with Paragraph 3 of Article 5 of the Constitution, Paragraphs 1, 2 and 3 of Article 46 of the Constitution, Item 2 of Paragraph 1 of Article 94 of the Constitution, Paragraph 2 of Article 128 of the Constitution and the laws—Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the Civil Code, Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies.”

The Constitutional Court

has established:

  1. The petition of the group of Members of the Seimas requesting to investigate the compliance of the provisions of the Resolution (No. 665) of the Government of the Republic of Lithuania “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 with the Constitution of the Republic of Lithuania and the laws was received at the Constitutional Court.

The group of Members of the Seimas, the petitioner, requests to investigate whether Item 4 of the Government resolution (No. 665) “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 (hereinafter also referred to as the Government resolution (No. 665) of 6 June 2012) and Items 5, 15.1, 15.2, 24, 42.1, 54, 58 and 69.8 and Section XII of the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises (hereinafter also referred to as the Description) approved by it are not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the Civil Code of the Republic of Lithuania (hereinafter also referred to as the CC), with Item 5 of Paragraph 1 of Article 22 of the Law on the Government of the Republic of Lithuania, Paragraph 2 of Article 19 and Article 191 of the Republic of Lithuania Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Republic of Lithuania Law on Joint-stock Companies.

  1. The group of Members of the Seimas, the petitioner, had already applied to the Constitutional Court with an analogous petition requesting to investigate the compliance of the Government resolution (No. 665) of 6 June 2012 with the Constitution and the laws. This petition was received at the Constitutional Court on 19 July 2012. By the ordinance (No. 2B-47) of the President of the Constitutional Court of 3 September 2012 it was returned to the petitioner, inter alia due to the fact that the petition did not clearly set forth the position of the petitioner regarding the extent of the impugned legal regulation, i.e. it was not clear whether the petitioner doubted regarding the compliance of the whole Government resolution (No. 665) of 6 June 2012, or only of some provisions of this resolution with the Constitution and the laws, as well as due to the fact that one did not provide any clear legal reasoning substantiating the doubts of the petitioner regarding the compliance of the impugned legal regulation with the Constitution and the laws.

The Constitutional Court

holds that:

I

  1. The group of Members of the Seimas, the petitioner, requests to investigate whether inter alia Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies.

1.1. Item 4 of the Government resolution (No. 665) of 6 June 2012 prescribes:

“4. To establish that the monetary funds falling to the share of the State:

4.1. shall be, in case of liquidation of the state-managed enterprises whose shares belonging to the state are managed by the State Social Insurance Fund Board by the right of trust, transferred to the budget of the State Social Insurance Fund;

4.2. shall be transferred by the state-managed enterprises which are not specified in Item 4.1 of this resolution—to the state budget of the Republic of Lithuania;

4.3. the assets not specified in Items 4.1 and 4.2 of this resolution shall be transferred to the state enterprise the State Property Fund, unless otherwise established by laws of the Republic of Lithuania or resolutions of the Government of the Republic of Lithuania.”

It needs to be noted that Item 4 of the Government resolution (No. 665) of 6 June 2012 inter alia provides that in case of liquidation of the state-managed enterprises which was managed by the State Social Insurance Fund Board by the right of trust, transferred to the budget of the State Social Insurance Fund, the monetary funds falling to the share of the State are transferred to the budget of the State Social Insurance Fund.

1.2. The petition of the petitioner requesting to investigate the compliance of Item 4 of the Government resolution (No. 665) of 6 June 2012 with the Constitution and the laws is substantiated by the following arguments.

Item 4 of the Government resolution (No. 665) of 6 June 2012 provides when and how the monetary funds and other state assets from the state-managed enterprises fall to the share of the state institutions and that means that by this legal regulation one establishes the procedure and conditions for disposal of the state-owned property. Under Paragraph 2 of Article 128 of the Constitution, the procedure for the possession, use and disposal of state property shall be established by law. Thus, the Government regulated the sphere which is to be regulated by the legislator. According to the petitioner, such a procedure for management, use and disposal of the state-owned property which is established in Item 4 of the Government resolution (No. 665) of 6 June 2012 may only be established by a law. Thus, the petitioner doubts whether Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with paragraph 2 of Article 128 of the Constitution and with the constitutional principle of a state under the rule of law and hierarchy of legal acts.

1.3. In this context it needs to be noted that the Constitutional Court has held in its acts more than once that the principle of a state under the rule of law consolidated in the Constitution implies the hierarchy of legal acts as well, inter alia the fact that sub-statutory legal acts must be adopted on the basis of laws, that a sub-statutory legal act is an act of application of norms of the law, irrespective of whether the act is of one-time (ad hoc) application, or permanent validity. Thus, the petition of the petitioner requesting to investigate whether Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with the principle of hierarchy of legal acts is to be considered as a petition requesting to investigate whether Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with the constitutional principle of a state under the rule of law.

1.4. It needs to be held that the petition of the petitioner requesting to investigate whether Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 2 of Article 128 of the Constitution and the constitutional principle of a state under the rule of law is substantiated by the legal reasoning and meets other requirements established in the Law on the Constitutional Court of the Republic of Lithuania, therefore, it is to be accepted for consideration at the Constitutional Court.

1.5. Alongside, it needs to be noted that in the operative part of its petition the petitioner specifies that it requests to investigate inter alia the compliance of Item 4 of the Government resolution (No. 665) of 6 June 2012 with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 of the Constitution, with the constitutional principles of proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, however, in its petition the petitioner does not provide any arguments whereby it would substantiate its position regarding the compliance of Item 4 of the Government resolution (No. 665) of 6 June 2012 with these provisions of the Constitution and the laws.

1.6. Under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing the said provisions of the Law on the Constitutional Court, the Constitutional Court has held more than once that “the position of the petitioner concerning the compliance of a legal act (part thereof) with the Constitution according to the content of norms and/or the extent of regulation must be indicated clearly and unambiguously, the petition must contain the arguments and reasoning grounding the doubt of the petitioner that the legal act (part thereof) is in conflict with the Constitution. Thus, the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution in view of the content of norms and/or the extent of regulation must clearly indicate concrete articles (parts thereof), items of the legal act the compliance of which with the Constitution is doubtful from the petitioner’s viewpoint, also concrete provisions—norms and/or principles—of the Constitution, with which, in the opinion of the petitioner, the concretely indicated articles or items of the impugned legal act are in conflict. The petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution according to the content of norms and/or the extent of regulation must also clearly set forth the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner. Otherwise, the request to investigate the compliance of a legal act (part thereof) with the Constitution in view of the content of norms and/or the extent of regulation must be considered to be not in line with the requirements of Article 66 of the Law on the Constitutional Court” (the Constitutional Court’s decision of 16 April 2004, ruling of 12 December 2005, decision of 14 March 2006 and decisions of 29 March 2006, 19 March 2010 and 5 March 2012).

It also needs to be noted that if, in the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution according to the content of norms and/or the extent of regulation, one does not indicate concrete articles (parts thereof), items of the legal act, the compliance of which with the Constitution is doubtful to the petitioner, nor concrete provisions—norms and/or principles—of the Constitution with which, in the opinion of the petitioner, the concretely indicated articles (parts thereof) or items of the impugned legal act are in conflict according to the content of norms and/or the extent of regulation, nor the legal reasoning grounding the doubt of the petitioner concerning each concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution according to the content of norms and/or the extent of regulation is doubtful to the petitioner, and in case such a petition was accepted at the Constitutional Court and a case was commenced subsequent to it, one would also restrict the rights of the party concerned, the state institution that has passed the impugned legal act, since it would be more difficult for the party concerned to present explanations concerning the arguments of the petitioner and to prepare for the judicial consideration (the Constitutional Court’s decisions of 16 April 2004 and 19 March 2010).

1.7. It needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46 and Item 2 of Paragraph 1 of Article 94 of the Constitution, with the constitutional principles of proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does not meet the requirements set forth in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court.

If a petition (part thereof) fails to comply with the requirements set forth in Article 66 of the Law on the Constitutional Court, under Article 70 of the Law on the Constitutional Court, such a petition is returned to the petitioner. The return of a petition shall not take away the right to apply to the Constitutional Court according to the common procedure after removal of the deficiencies thereof.

1.8. While taking account of that, one needs to draw a conclusion that there is a ground to return to the group of Members of the Seimas, the petitioner, the petition requesting to investigate whether Item 4 of the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46 and Item 2 of Paragraph 1 of Article 94 of the Constitution, with the constitutional principles of proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies.

  1. The petitioner also requests to investigate whether inter alia Item 54 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies.

2.1. Item 54 of the Description prescribes:

“54. The manager of the shares himself shall have the right to adopt the decisions regarding granting proxy to vote on the questions of the agenda of the General Meeting of Shareholders provided that at least 2 indexes of the managed enterprise do not reach the following meanings:

54.1. the authorised capital—500 thousand Litas;

54.2. net income from sale of a year—500 thousand Litas;

54.3. average annual number of employees—50.”

Item 53 of the Description prescribes:

„53. Only pursuant to the resolution adopted by the Government regarding the concrete state-managed enterprise, the manager of the shares may grant proxy to vote:

53.1. for increasing the authorised capital of the state-managed enterprise by additional contributions when the shares carrying more than 1/2 of all votes belong to the state by the right of ownership;

53.2. regarding the following questions of the agenda, provided that the shares carry more than 2/3 of all votes:

53.2.1. to liquidate the state-managed enterprise if a bankruptcy case is not brought against it;

53.2.2. to cancel the liquidation of the state-managed enterprise if the decision to liquidate the state-managed enterprise had been adopted by the General Meeting of the Shareholders;

53.2.3. to reorganise the state-managed enterprise while having specified the method of reorganisation, or to perform the procedures of separation with regard to such a state-managed enterprise;

53.2.4. to reorganise the state-managed enterprise while having specified the legal form of the legal person into which the state-managed enterprise will be reorganised.”

In this context it needs to be noted that the manager of the shares is a state institution, establishment, the state enterprise the State Property Fund or other legal person which implements the property and non-property rights granted by the shares of the state-managed enterprises that belong to the state by the right of ownership to which, in cases and under the procedure established by the legal acts, these shares have been transferred by the right of trust to manage, use and dispose of (Item 3 of the Description).

2.2. It is clear from the arguments of the petitioner that it requests to investigate the compliance of not all Item 54 of the Description with the Constitution and the laws, but whether Item 54 of the Description, insofar as it prescribes that under the conditions specified in this item, the manager of the shares himself has the right to adopt the decisions regarding granting proxy to vote for increasing the authorised capital of the state-managed enterprise by additional contributions when the shares carrying more than 1/2 of all votes belong to the state by the right of ownership, is not in conflict with the Constitution and the laws.

2.3. The petition of the petitioner, requesting to investigate whether Item 54 of the Description, insofar as it prescribes that under the conditions specified in this item, the manager of the shares himself has the right to adopt the decisions regarding granting proxy to vote for increasing the authorised capital of the state-managed enterprise by additional contributions when the shares carrying more than 1/2 of all votes belong to the state by the right of ownership, is not in conflict with the Constitution and the laws, is substantiated by the following arguments.

Under Paragraph 2 of Article 19 of the Law on Management, Use and Disposal of the State-owned and Municipal Property, a decision on the investment of assets belonging to the state by the right of ownership shall be adopted by the Government. The decision regarding proxy to vote for inter alia increasing the authorised capital of the state-managed enterprise by additional contributions is linked to the investment of state assets and it may be adopted, under the conditions specified in Item 54 of the Description, by the manager of the shares himself provided that the conditions specified in this item exist. Thus, in the opinion of the petitioner, the legal regulation consolidated in Item 54 of the Description, insofar as it prescribes that under the conditions specified in this item, the manager of the shares himself has the right to adopt the decisions regarding granting proxy to vote for increasing the authorised capital of the state-managed enterprise by additional contributions when the shares carrying more than 1/2 of all votes belong to the state by the right of ownership, is in conflict with the legal regulation established in Paragraph 2 of Article 19 of the Law on Management, Use and Disposal of the State-owned and Municipal Property.

2.4. It needs to be held that the petition of the petitioner requesting to investigate whether Item 54 of the Description as approved by the Government resolution (No. 665) of 6 June 2012, insofar as it prescribes that under the conditions specified in this item, the manager of the shares himself has the right to adopt the decisions regarding granting proxy to vote for increasing the authorised capital of the state-managed enterprise by additional contributions when the shares carrying more than 1/2 of all votes belong to the state by the right of ownership, is not in conflict with Paragraph 2 of Article 19 of the Law on Management, Use and Disposal of the State-owned and Municipal Property is substantiated by legal reasoning and meets other requirements established in the Law on the Constitutional Court, therefore, it is to be accepted for consideration at the Constitutional Court.

2.5. Alongside, it needs to be noted that in the operative part of its petition the petitioner requests to investigate whether Item 54 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, however, the petitioner does not provide any arguments whereby it would substantiate its position regarding the compliance of Item 54 of the Description with these provisions of the Constitution and the laws.

2.6. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing this provision, the Constitutional Court has held more than once that the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution must clearly indicate the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner.

It has also been mentioned that if a petition (part thereof) fails to comply with the requirements set forth in Article 66 of the Law on the Constitutional Court, under Article 70 of this Law, such a petition is returned to the petitioner. The return of a petition shall not take away the right to apply to the Constitutional Court according to the common procedure after removal of the deficiencies thereof.

2.7. It needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Item 54 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does meet the requirements established in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, therefore, one needs to draw a conclusion that there is a ground to return this petition to the petitioner.

II

  1. The group of Members of the Seimas, the petitioner, requests to investigate whether inter alia Item 5 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with the Constitution and the laws.

1.1. Item 5 of the Description prescribes: “When implementing the rights granted by the shares, the managers of the shares must seek that the provisions of Items 16 and 19 and those of Chapter XIX of the Description would be applied mutatis mutandis for the subsidiaries (joint-stock companies) of the state-managed enterprises and closed joint-stock companied, as well as to all other subsidiaries linked to the state-managed enterprises via subsidiaries of successive sequences.”

Item 16 of the Description prescribes: “The management coordination centre every 3 years calculates the price of the owned capital and the targeted structure of the capital of each state-managed enterprise attributed to groups 1A or 1B, while taking account of the recommendations provided in Annex 3 to the Description, and, having coordinated with the corresponding institution representing the state, presents them to the Government for approval. The capability of the enterprise to generate for the participant of the state-managed enterprise the expected return will be assessed by comparing the price of the capital as approved by the Government with the annual index of return on equity which is understood as the proportion between the annual net profit and average annual equity accounted.”

Item 19 of the Description prescribes:

“19. The institution implementing the rights and duties of the owner of the enterprise ensures, whereas the manager of the shares seeks, and in those cases when the possessed number of votes allows, ensures that:

19.1. The bodies of the state-managed enterprise, according to their competence, should adopt the decisions, whereby they would establish the strategy of the corresponding state-managed enterprise, its long-term and short-term goals, and, in case when additional financing is necessary in order to reach them—the sources of financing for implementation of the specified goals (for example, the income from the activity of the state-managed enterprise, borrowed capital, increasing of the owned capital by means of state and/or private funds, subsidy, subvention, etc.);

19.2. the strategy of the state-owned enterprise should include the analysis of the environment in which the state-managed enterprise operates, mission, vision, long-term (strategic) goals, tasks and resources necessary to achieve them, as well as operating plans;

19.3. the corresponding body of the state-managed enterprise should provide for a draft strategy of the state-managed enterprise to the management coordination centre not later than 15 November of each year. The management coordination centre presents the recommendations regarding the draft strategy of the state-owned enterprise within a month. The corresponding body of the state-managed enterprise reviews and evaluates the recommendations of the management coordination centre.”

Chapter XIX “Remuneration of the Council of Observers, the Board and Leading Employees of the State-managed Enterprise” (Items 70–74) of the Description consolidates the provisions linked to establishment of remuneration for the council of observers, the board and leading employees, inter alia the provisions which have the recommendations regarding the amount of remuneration for the members of the council of observers and the board.

1.2. In the petition of the petitioner it is stated that by such legal regulation, under which certain provisions of the Description are applied not only to state-managed enterprises, but also to their subsidiaries, the rights of other shareholders (not of the state) are restricted, one limits their right to adopt decisions independently and restricts freedom of economic activity which is guaranteed in Article 46 of the Constitution. By this legal regulation, under which the state inter alia will assess the financial indicators of the enterprise, one violates the right of a private legal person to assume any rights or duties at discretion (Paragraph 1 of Article 2.74 of the CC). In addition, under Paragraph 1 of Article 14 of the Law on Joint-stock companies, the rights of the shareholders may be limited only by law. Legal capacity of legal persons may also be limited only by means of laws, as established in Paragraph 1 of Article 2.75 of the CC. In this case it is done by means of a sub-statutory legal act, the Government resolution (No. 665) of 6 June 2012, thus, one violated not only the said provisions of laws, but also the constitutional principles of a state under the rule of law, hierarchy of legal acts and separation of powers.

1.3. However, in its petition the petitioner does not explain which concrete rights of the shareholders of the subsidiaries of state-managed enterprises are restricted by the impugned legal regulation and does not specify what decisions the shareholders are not allowed to adopt and how concretely freedom of the economic entities may be limited by the specified provisions of the Description. It is not clear from the petition of the petitioner how the goal to prepare long-term strategies and other similar documents of the enterprise provided in Item 54 of the Description limits the rights of other shareholders to adopt decisions independently.

In the petition of the petitioner it is not explained why it is not allowed to seek to attain a situation, where the provisions linked to the assessment of the ability of state-managed enterprises to generate the return on capital, to the preparation of a strategy of state-owned enterprises, control of the implementation of the strategy and to remuneration of leading employees, where one would seek by the said provisions to ensure a rational and responsible administration of state-owned property.

1.4. In this context it needs to be noted that the Constitutional Court has held that from the Constitution (inter alia the provision of Paragraph 2 of Article 128 thereof that the procedure for the possession, use and disposal of state property shall be established by law), follows the requirement to treasure state-owned property, not to waste it and manage it rationally (the Constitutional Court’s rulings of 30 September 2003 and 5 July 2007); under the Constitution, the legislator is obligated to establish by laws such legal regulation for the possession, use and disposal of the state-owned property so that this property would be used for the needs of the society, would serve the public interest, and the welfare of the nation (the Constitutional Court’s ruling of 30 September 2003); under the Constitution, it is not permitted to establish any such legal regulation according to which the property of the state would be possessed, used and disposed of in such a manner that it would satisfy the interests or needs of only one social group or separate persons, and this property would not serve the public interest, need of society, welfare of the nation (the Constitutional Court’s rulings of 30 September 2003, 8 July 2005, 5 July 2007, 23 November 2007, 20 March 2008 and 2 March 2009).

While specifying in its petition that by the legal regulation which raised doubts one virtually seeks to control the subsidiaries–joint-stock companies of the state-managed enterprises, as well as all other subsidiaries linked to the state-managed enterprises via subsidiaries of successive sequences too strictly, the petitioner neither analyses in any nor evaluates these provisions of the official constitutional doctrine.

1.5. Thus, it needs to be held that the petition of the petitioner does not include clear legal reasoning substantiating the petitioner’s doubts regarding the compliance of Item 5 of the Description with the constitutional principles of a state under the rule of law, hierarchy of legal acts and separation of powers, with Paragraph 1 of Article 2.74 and Paragraph 1 of Article 2.75 of the CC and with Paragraph 1 of Article 14 of the Law on Joint-stock Companies.

1.6. In the operative part of its petition, the petitioner requests to investigate whether Item 5 of the Description is also not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, and Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property, however, it does not provide any arguments in order to substantiate its position regarding the compliance of Item 5 of the Description with these provisions of the Constitution and the laws.

1.7. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing this provision, the Constitutional Court has held more than once that the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution must clearly indicate the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner.

1.8. While taking account of that, it needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Item 5 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property, and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does not meet the requirements established in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court.

  1. The group of Members of the Seimas, the petitioner, inter alia requests to investigate whether Items 15.1, 15.2 and 42.1 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 are not in conflict with the Constitution and the laws.

2.1. Item 15 of the Description prescribes:

“15. The institution implementing the rights and duties of the owner of the enterprise ensures that, whereas the manager of the shares seeks to achieve a situation where (and, in those cases when the possessed number of votes allows, ensures that):

15.1. the state-managed enterprise which is attributed to groups 1A or 1B according to the Description, would seek the growth of the value of business of the enterprise and should ensure the proper return on the invested capital;

15.2. the state-managed enterprise which is attributed to groups 1A or 1B according to the Description, would seek the profitable activity.”

Item 42 of the Description prescribes: “42. The institution implementing the rights and duties of the owner of the enterprise ensures that the state-owned enterprises: 42.1. would transfer the profit contribution and monetary funds, in case of liquidation of the enterprise, to the state budget of the Republic of Lithuania on time; <...>”

2.2. In the opinion of the petitioner, while establishing the legal regulation under which one seeks to ensure that the state-managed enterprises should operate at a profit, that a proper return on the state’s invested capital should be ensured and that in case of liquidation of a state-owned enterprise the profit contribution and monetary funds would be transferred to the state budget on time, the Government exceeded the powers to establish the procedure of management and use of the state-owned property granted to it by Item 5 of Paragraph 1 of Article 22 of the Law on the Government, it improperly established the procedure for implementation of the property and non-property rights of the state and municipalities (Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property).

Under Paragraph 2 of Article 2.34 of the CC, public legal persons shall be legal persons established by the state or municipalities, their institutions or other non-profit-seeking persons whose goal is to meet public interests (state and municipality enterprises, state or municipality institutions, public institutions, religious communities, etc.), therefore, the goal to make profit established in Items 15.1 and 15.2 of the Description and the obligation to pay the profit contribution to the state budget established in Item 42.1 of the Description “deny the purpose of foundation of the state-managed enterprises—to provide services which would be important and useful for society and not to perform a commercial activity.” Such legal regulation, where state-managed enterprises are obliged to make profit, restricts freedom of economic activities and limits their economic activity unlawfully. Thus, in the opinion of the petitioner, the legal regulation established in Items 15.1, 15.2 and 42.1 of the Description restricts freedom of economic activity and is in conflict with Paragraphs 1, 2 and 3 of Article 46 of the Constitution.

2.3. However, the petitioner does not take account of the fact that not all the state-managed enterprises are public legal persons and does not explain how the goal to make profit set for the state-managed enterprise may be in conflict with the goal of the public legal persons to satisfy public interests established in Paragraph 2 of Article 2.34 of the CC, and does not specify why the state-managed enterprises, seeking to operate at a profit, may not provide services which would be important and useful for society, as well as does not explain why profit-making should reduce the quality of the provided services and how the goal to operate at a profit may limit the freedom of economic activity of such enterprises. In the petition of the petitioner it is not specified why by means of the impugned legal regulation whereby the goal to make profit and return on capital are consolidated one exceeds the powers of the Government to establish the procedure for management and use of the state-owned property and implementation of the property and non-property rights of the state.

2.4. Thus, it needs to be held that the petition of the petitioner does not include clear legal reasoning substantiating its doubts regarding the compliance of Items 15.1, 15.2 and 42.1 of the Description with Paragraphs 1, 2 and 3 of Article 46 of the Constitution, Paragraph 2 of Article 2.34 of the CC, Item 5 of Paragraph 1 of Article 22 of the Law on the Government and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property.

2.5. In the operative part of its petition, the petitioner requests to investigate whether Items 15.1, 15.2 and 42.1 of the Description are not in conflict also with Paragraph 3 of Article 5, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Article 2.75 and Paragraph 1 of Article 2.80 and Paragraph 2 of Article 19 of the CC and with Paragraph 1 of Article 14 of the Law on Joint-stock Companies, however, it does not provide any arguments in order to substantiate its position regarding the compliance of Items 15.1, 15.2 and 42.1 of the Description with these provisions of the Constitution and the laws.

2.6. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing this provision, the Constitutional Court has held more than once that the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution must clearly indicate the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner.

2.7. While taking account of that, it needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Items 15.1, 15.2 and 42.1 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 are not in conflict also with Paragraph 3 of Article 5, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Article 2.75 and Paragraph 1 of Article 2.80 and Paragraph 2 of Article 19 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does not meet the requirements established in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court.

  1. The petitioner requests to investigate whether Item 24 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with the Constitution and the laws.

3.1. Item 24 of the Description prescribes: “The institution implementing the rights and duties of the owner of the enterprise ensures, whereas the manager of the shares seeks to achieve a situation where (and, in those cases when the possessed number of votes allows, ensures that) the corresponding bodies of the state-managed enterprise, which (according to their competence) have adopted the decisions regarding the goals, mission, vision, long-term goals of the state-managed enterprise and establishment of financial resources necessary to achieve them, having approved the strategy of the state-managed enterprise and annual operating plans thereof, should regularly supervise how the decisions adopted by them are implemented and should prepare annual reports on the implementation of the strategy.”

3.2. In the opinion of the petitioner, the requirement to prepare the annual report on implementation of the strategy consolidated in Item 24 of the Description burdens the activity of the state-managed enterprise inadequately, as usually in practice the strategies of long-term activity are prepared not for a year, but for three years. In addition to this report, by means of other laws the state-managed enterprises are obliged to prepare also the annual financial statements and annual reports. Preparation of additional annual reports on implementation of the strategy, as an additional bureaucratic burden, limits the freedom of the state-managed enterprise which is guaranteed by the provisions of Articles 1, 2 and 3 of Article 46 of the Constitution, therefore, the preparation of such reports should not be obligatory but only recommended.

3.3. However, in its petition the petitioner does not specify how the requirement to prepare an additional annual report linked to the implementation of the strategy of the enterprise burdens the possibilities of the enterprise to carry out its direct, i.e. provided in that strategy, activity and why preparation of the annual report on implementation of the strategy limits the freedom of economic activity consolidated in Article 46 of the Constitution.

The petitioner does not take account of the provisions of the official constitutional doctrine that the requirement to treasure state-owned property, not to waste it and manage it rationally stems from the Constitution (inter alia Paragraph 2 of Article 128) and does not in any way assess the impugned legal regulation in the context of these provisions.

The requirement to prepare the annual report linked to implementation of the strategy of an enterprise which is consolidated in Item 24 of the Description creates preconditions to control, how the decisions regarding the goals, mission, vision, long-term goals of the state-managed enterprise and establishment of financial resources necessary to achieve them adopted by the competent bodies of the state-managed enterprise are implemented.

3.4. Thus, it needs to be held that in the petition of the petitioner one does not provide any clear legal reasoning substantiating the doubts of the petitioner regarding the compliance of Item 24 of the Description with Paragraphs 1, 2 and 3 of Article 46 of the Constitution.

3.5. In the operative part of the petition, the petitioner requests to investigate whether Item 24 of the Description is not in conflict also with Paragraph 3 of Article 5, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, however, it does not provide any arguments substantiating its position regarding the compliance of Item 24 of the Description with these provisions of the Constitution and the laws.

3.6. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing this provision, the Constitutional Court has held more than once that the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution must clearly indicate the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner.

3.7. While taking account of that, it needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Item 24 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does not meet the requirements set forth in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court.

  1. 4. The petitioner requests to investigate whether inter alia Chapter XII “Committees” of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with the Constitution and the laws.

4.1. In Chapter XII “Committees” (Items 33–34 of the Description) of the Description one provides for a possibility to form the committees of advisory nature in the state-managed enterprise—of internal control, remuneration and, in case of need, other committees. Chapter XII of the Description establishes the duty of the institution implementing the rights and duties of the owner of the enterprise to ensure and the duty of the manager of the shares to seek (in those cases when the possessed number of votes allows—to ensure) the formation of the said committees in the state-managed enterprises specified in Chapter XII of the Description.

4.2. According to the petitioner, by means of the legal regulation consolidating that additional committees (operating in line with the board of the enterprise) must be formed in the state-managed enterprise the functions whereof, according to the petitioner, are not clearly defined, one groundlessly burdens the activity of the state-managed enterprise, interferes with the activity of a private legal person and groundlessly expands the management structure of the state-managed enterprise. Such legal regulation creates an administrative mechanism that does not ensure effective management. Thus, in the opinion of the petitioner, such legal regulation limits the freedom of economic activity of the state-managed enterprise and violates the provisions of Paragraphs 1, 2 and 3 of Article 46 of the Constitution.

4.3. However, while stating that by means of the impugned legal regulation the state-managed enterprise is obliged to create additional committees the functions whereof are not clear, the petitioner does not take account of Items 33.1 and 33.2 of the Description in which it is prescribed for what purpose and for implementation of which functions the said committees must be formed. The petitioner does not specify how exactly the additionally formed committees, having the functions attributed to them, might impede the activities of the state-managed enterprise and how, upon the formation of the said committees, one could limit the freedom of economic activity guaranteed in Article 46 of the Constitution and could violate the provisions of Paragraphs 1, 2 and 3 of Article 46 of the Constitution.

4.4. Thus, it needs to be held that in the petition of the petitioner one does not provide any clear legal reasoning substantiating the doubts of the petitioner regarding the compliance of Chapter XII “Committees” of the Description with Paragraphs 1, 2 and 3 of Article 46 of the Constitution.

4.5. In the operative part of the petition, the petitioner requests to investigate whether Chapter XII “Committees” of the Description is not in conflict also with Paragraph 3 of Article 5, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, however, it does not provide any arguments substantiating its position regarding the compliance of Chapter XII of the Description with these provisions of the Constitution and the laws.

4.6. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing this provision, the Constitutional Court has held more than once that the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution must clearly indicate the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner.

4.7. While taking account of the specified arguments, it needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Chapter XII “Committees” of the Description as approved by the Government resolution (No. 665) of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does not meet the requirements set forth in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court.

  1. The petitioner inter alia requests to investigate whether Items 58 and 69.8 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 are not in conflict with the Constitution and the laws.

5.1. Item 58 of the Description prescribes: “The candidates to members of the board of the state-managed enterprise nominated by the institution representing the state must meet the general and concrete selection criteria provided that the selection committee has prescribed so."

Item 69 of the Description inter alia provides:

“69. The candidates nominated by the manager of shares to members of the elective body of the general meeting of the shareholders of the state-managed enterprise are selected in the following manner:

<...> 69.8. the manager of the shares issues a letter of attorney to nominate the candidates specified in the decision of the selection committee or the Government in the general meeting of shareholders of the state-managed enterprise and to vote for them, whereas when the state manages the shares of the state-managed enterprise that carry all votes—adopts the decision of the only shareholder to appoint the candidates specified in the decision of the selection committee or the Government as members of the corresponding body.”

5.2. In the opinion of the petitioner, the legal regulation established in Items 58 and 69.8 of the Description violates the rights of private shareholders to freely vote and decide on management of the enterprise. The petitioner states that private shareholders must follow the decision of the selection committee to choose a concrete candidate, thus, such legal regulation restricts the rights of the shareholders that may be limited only by law. Thus, in the opinion of the petitioner, Items 58 and 69.8 of the Description are in conflict with Paragraphs 1, 2 and 3 of Article 46 of the Constitution, the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, and with Paragraph 1 of Article 14 of the Law on Joint-stock Companies.

5.3. However, the petitioner does not take account of the fact that Items 58 and 69.8 of the Description do not consolidate any duty of private shareholders to vote for the candidate proposed by the selection committee. The Description establishes the selection criteria that must be met only by the candidates to the members of the board of the state-managed enterprise nominated by the institution representing the state. The Description does not prescribe that such criteria must be met also by the candidates nominated for these members by other shareholders. Under Item 69.8 of the Description, the manager of the shares issues a letter of attorney only regarding nomination of the specified candidates and voting for them in the general meeting of shareholders. The Description does not prescribe any duty of other shareholders to vote for the candidates nominated by the institution representing the state. Under Item 69.8 of the Description, the decision to appoint the candidates specified in the decision of the selection committee or the Government as members of the corresponding body is adopted only in the case when the state manages the shares of the enterprise that carry all votes. In its petition the petitioner does not explain how the Government, having prescribed in Items 58 and 69.8 of the Description how the candidates to the managing bodies of the state-managed enterprise have to be selected and what criteria they must meet, restricted the rights of the shareholders to choose the desirable candidature. Thus, it is not clear how the impugned legal regulation could restrict the freedom of the shareholders to vote freely and to decide on management of the enterprise. Neither does the petitioner specify how concretely in this case one could restrict the freedom of economic activity guaranteed in Article 46 of the Constitution and violate the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society.

5.4. Thus, it needs to be held that the petition of the petitioner does not include any clear legal reasoning substantiating the petitioner’s doubts regarding the compliance of Items 58 and 69.8 of the Description with Paragraphs 1, 2 and 3 of Article 46 of the Constitution, the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, and with Paragraph 1 of Article 14 of the Law on Joint-stock Companies.

5.5. In the operative part of the petition, the petitioner requests to investigate whether Items 58 and 69.8 of the Description are not in conflict also with Paragraph 3 of Article 5, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, Item 5 of Paragraph 1 of Article 22 of the Law on the Government, and Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property, however, it does not provide any arguments in order to substantiate its position regarding the compliance of Items 58 and 69.8 of the Description with these provisions of the Constitution and the laws.

5.6. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court, a petition for the investigation of the compliance of a legal act with the Constitution, whereby one applies to the Constitutional Court, must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing reference to laws.

While construing this provision, the Constitutional Court has held more than once that the petition requesting to investigate the compliance of a legal act (part thereof) with the Constitution must clearly indicate the legal reasoning grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution is doubtful to the petitioner.

5.7. While taking account of that, it needs to be held that the petition of the group of Members of the Seimas, the petitioner, requesting to investigate whether Items 58 and 69.8 of the Description as approved by the Government resolution (No. 665) of 6 June 2012 are not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, does not meet the requirements set forth in Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court.

  1. It has been mentioned that if a petition (part thereof) fails to comply with the requirements set forth in Article 66 of the Law on the Constitutional Court, under Article 70 of the Law on the Constitutional Court, such a petition is returned to the petitioner. The return of a petition shall not take away the right to apply to the Constitutional Court according to the common procedure after removal of the deficiencies thereof.
  2. While taking account of what has been set forth, one needs to draw a conclusion that there is a ground to return the petition, requesting to investigate whether Items 5, 15.1, 15.2, 24, 42.1, 58, 69.8 and Section XII of the Description as approved by the Government resolution (No. 665) of 6 June 2012 are not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the CC, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government, Paragraph 2 of Article 19 and Article 191 of the Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Law on Joint-stock Companies, to the petitioner.

Conforming to Paragraphs 3 and 4 of Article 22, Paragraph 2 of Article 25, and Articles 28, 66 and 70 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania has passed the following

decision:

  1. To accept the petition of the group of Members of the Seimas of the Republic of Lithuania, the petitioner, requesting to investigate whether:

– Item 4 of the Resolution (No. 665) of the Government of the Republic of Lithuania “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 is not in conflict with Paragraph 2 of Article 128 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law;

– Item 54 of the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises as approved by the Resolution (No. 665) of the Government of the Republic of Lithuania “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012, insofar as it prescribes that under the conditions specified in this item, the manager of the shares himself has the right to adopt the decisions regarding granting proxy to vote for increasing the authorised capital of the state-managed enterprise by additional contributions when the shares carrying more than 1/2 of all votes belong to the state by the right of ownership, is not in conflict with Paragraph 2 of Article 19 of the Republic of Lithuania Law on Management, Use and Disposal of the State-owned and Municipal Property.

  1. To return the petition of the group of Members of the Seimas of the Republic of Lithuania, the petitioner, requesting to investigate whether:

– Item 4 of the Resolution (No. 665) of the Government of the Republic of Lithuania “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46 and Item 2 of Paragraph 1 of Article 94 of the Constitution of the Republic of Lithuania, with the constitutional principles of proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the Civil Code of the Republic of Lithuania, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government of the Republic of Lithuania, Paragraph 2 of Article 19 and Article 191 of the Republic of Lithuania Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Republic of Lithuania Law on Joint-stock Companies;

– Item 54 of the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises as approved by the Resolution (No. 665) of the Government of the Republic of Lithuania “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 is not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution of the Republic of Lithuania, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the Civil Code of the Republic of Lithuania, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government of the Republic of Lithuania, Article 191 of the Republic of Lithuania Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Republic of Lithuania Law on Joint-stock Companies;

– Items 5, 15.1, 15.2, 24, 42.1, 58, 69.8 and Section XII of the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises as approved by the Resolution (No. 665) of the Government of the Republic of Lithuania “On Approving the Description of the Procedure for Implementation of the Property and Non-property Rights of the State in State-managed Enterprises” of 6 June 2012 are not in conflict with Paragraph 3 of Article 5, Paragraphs 1, 2 and 3 of Article 46, Item 2 of Paragraph 1 of Article 94 and Paragraph 2 of Article 128 of the Constitution of the Republic of Lithuania, with the constitutional principles of a state under the rule of law, hierarchy of legal acts, proportionality and coordination of interests of the person and society, with Article 1.2, Paragraph 3 of Article 1.3, Paragraph 2 of Article 2.34, Paragraph 1 of Article 2.74, Article 2.75 and Paragraph 1 of Article 2.80 of the Civil Code of the Republic of Lithuania, with Item 5 of Paragraph 1 of Article 22 of the Law on the Government of the Republic of Lithuania, Paragraph 2 of Article 19 and Article 191 of the Republic of Lithuania Law on Management, Use and Disposal of the State-owned and Municipal Property and Paragraph 1 of Article 14 of the Republic of Lithuania Law on Joint-stock Companies.

This decision of the Constitutional Court is final and not subject to appeal.

The decision is promulgated in the name of the Republic of Lithuania.

Justices of the Constitutional Court:                         Egidijus Bieliūnas

                                                                                             Toma Birmontienė

                                                                                             Pranas Kuconis

                                                                                             Gediminas Mesonis

                                                                                             Ramutė Ruškytė

                                                                                             Egidijus Šileikis

                                                                                             Algirdas Taminskas

                                                                                             Romualdas Kęstutis Urbaitis

                                                                                             Dainius Žalimas