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On the acquisition of agricultural land

Case No. 14/03

 

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 

RULING

ON THE COMPLIANCE OF ARTICLE 4 OF THE REPUBLIC OF LITHUANIA’S PROVISIONAL LAW ON THE ACQUISITION OF AGRICULTURAL LAND (WORDING OF 15 JULY 2004) WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA AND ON THE PETITION OF A GROUP OF MEMBERS OF THE SEIMAS, THE PETITIONER, REQUESTING AN INVESTIGATION INTO WHETHER ARTICLE 4 OF THE REPUBLIC OF LITHUANIA’S PROVISIONAL LAW ON THE ACQUISITION OF AGRICULTURAL LAND (WORDING OF 28 JANUARY 2003) IS NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 

30 March 2006

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Toma Birmontienė, Egidijus Kūris, Kęstutis Lapinskas, Zenonas Namavičius, Ramutė Ruškytė, Vytautas Sinkevičius, Stasys Stačiokas, and Romualdas Kęstutis Urbaitis

The court reporter—Daiva Pitrėnaitė

Seimas members Gintaras Steponavičius and Raimondas Šukys, acting as the representatives of a group of members of the Seimas of the Republic of Lithuania, the party concerned

Liucija Schulte-Ebbert, a senior advisor of the Legal Department of the Office of the Seimas, acting as the representative of the Seimas of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, 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 29 March 2006, considered case No. 14/03 subsequent to the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether Article 4 of the Republic of Lithuania’s Provisional Law on the Acquisition of Agricultural Land (wording of 28 January 2003) is not in conflict with the Constitution of the Republic of Lithuania “as a whole” as well as with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

The Constitutional Court

has established:

I

1. A group of members of the Seimas, the petitioner, applied to the Constitutional Court with the petition requesting an investigation into whether Articles 3, 4, 5, 6 and 8 of the Republic of Lithuania’s Provisional Law on the Acquisition of Agricultural Land (wording of 28 January 2003; Official Gazette Valstybės žinios, 2003, No. 15-600; hereinafter also referred to as the Law (wording of 28 January 2003)) were not in conflict with the Constitution of the Republic of Lithuania “as a whole” as well as with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

2. By the Constitutional Court’s decision of 14 March 2006, which was adopted in this constitutional justice case, it was decided to dismiss the instituted legal proceedings in the case subsequent to the petition requesting an investigation into whether Articles 3 and 8 of the Law (wording of 28 January 2003) were not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution; to dismiss the instituted legal proceedings in the part of the case requesting an investigation into whether Articles 5 and 6 of the Law (wording of 28 January 2003) were not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution and to this extent to return the petition to the group of members of the Seimas, the petitioner; to continue the preparation the case for the Constitutional Court’s hearing, subsequent to the petition requesting an investigation into whether Article 4 of the Law (wording of 28 January 2003) is not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

II

The petitioner grounds its doubts as regards the compliance of Article 4 of the Law (wording of 28 January 2003) with the Constitution on the fact that the impugned article establishes, without any objective reasons, different maximum sizes of agricultural land plots which are permitted to be acquired by natural persons, agricultural companies and legal persons. According to the petitioner, such legal regulation discriminates against individual persons, thus, the provision of Article 29 of the Constitution that all persons shall be equal before the law, the court, and other state institutions and officials is violated; different competition conditions are created to different persons, thus, the provisions of Article 46 of the Constitution which consolidate freedom of fair competition and the opportunities of a human being to choose a desirable form of business are violated, thus, Paragraph 1 of Article 48 of the Constitution is violated.

III

In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from the representative of the Seimas, the party concerned, who was Liucija Schulte-Ebbert, wherein it is asserted, inter alia, that Article 4 of the Law (wording of 28 January 2003) is not in conflict with the Constitution. The position of the representative of the party concerned is grounded on the following arguments.

The adoption of the Law (wording of 28 January 2003) was determined by the Law on Amending Article 47 of the Constitution of the Republic of Lithuania and the Republic of Lithuania’s Law on Amending the Constitutional Law on the Subjects, Procedure, Terms and Conditions of, and Limitations on, the Acquisition into Ownership of Land Plots Provided for in Paragraph 2 of Article 47 of the Constitution of the Republic of Lithuania. From the economic, social and ethno-cultural standpoint, agriculture and rural development are state priority areas. The purposes established in Article 1 of the Law (wording of 28 January 2003) reflected the public interest which was sought to be attained by the requirements established in this law. One sought to ensure the use of agricultural land according to its purpose, the source of subsistence of the people who worked in agriculture and solution of rural social problems, to retain equal opportunities of residents of Lithuania and foreigners to acquire land, and to prevent land speculation (so that it is not bought up for the purpose of re-selling). By the establishment of different maximum sizes of agricultural land plots allowed to be acquired by natural persons, agricultural companies and other legal persons it was attempted to form, while taking account of different scale of the activities of legal and natural persons, corresponding agricultural structures.

IV

In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from G. Kniukšta, Chairperson of the Committee on Rural Affairs of the Seimas of the Republic of Lithuania, P. Koverovas, State Secretary of the Ministry of Justice of the Republic of Lithuania, R. Stanikūnas, Chairperson of the Competition Council of the Republic of Lithuania, V. Vadapalas, Director General of the European Law Department under the Government of the Republic of Lithuania, K. Maksvytis, Director General of the National Land Service under the Ministry of Agriculture of the Republic of Lithuania, P. Aleknavičius, advisor to the Minister of Agriculture of the Republic of Lithuania, D. Stanikūnas, Director of the Lithuanian Institute for Agrarian Economics, E. Grakauskas, a lecturer of the Department of Constitutional and Administrative Law of the Faculty of Law of Vilnius University, Assoc. Prof. E. Monkevičius who works at the Labour Law and Social Security Department of the Law University of Lithuania, J. Vilkevičiūtė, a teacher of the Department of Administration and Rural Development of the Faculty of Economics and Management of the Lithuanian University of Agriculture, and U. Trumpa, President of the Free Market Institute.

In the course of the preparation of the case for the Constitutional Court’s hearing, also some information was received from J. Kraujelis, Minister of Agriculture of the Republic of Lithuania and Acting Prof. A. Maziliauskas who works at the Faculty of Water and Land Management of the Lithuanian University of Agriculture.

V

1. At the Constitutional Court’s hearing, the representatives of the Seimas, the party concerned, who were G. Steponavičius and R. Šukys, virtually reiterated the arguments set forth in the petition of the petitioner.

The representative of the petitioner R. Šukys, a member of the Seimas, also presented additional arguments on the compliance of Article 4 of the Law (wording of 28 January 2003) with the Constitution, while interpreting it in the context of the entire regulation of the Law, as well as arguments on the conflict of Article 4 of the Republic of Lithuania’s Provisional Law on Acquisition of Agricultural Land (wording of 15 July 2004) with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

3. At the Constitutional Court’s hearing, L. Schulte-Ebbert virtually reiterated the arguments set forth in her written explanations.

4. At the Constitutional Court’s hearing, a specialist—Assoc. Prof. P. Aleknavičius, who works at Land Management Department of the Faculty of Water and Land Management of the Lithuanian University of Agriculture—took floor.

The Constitutional Court

holds that:

I

1. On 28 January 2003, the Seimas adopted the Provisional Law on the Acquisition of Agricultural Land which (save certain exceptions) came into force on 24 February 2003, i.e. on the day of the entry into force of the 23 January 2003 Law on Amending Article 47 of the Constitution.

On 20 May 2003, the Seimas adopted the Republic of Lithuania’s Law on Amending and Supplementing Article 1 of the Provisional Law on the Acquisition of Agricultural Land.

2. The petitioner requests an investigation into whether Article 4 of the Law (wording of 28 January 2003) is not in conflict with the Constitution “as a whole” as well as with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

3. By the Constitutional Court’s decision of 14 March 2006, which was adopted in this constitutional justice case, it was held that the petition requesting an investigation into the compliance of a legal act (part thereof) with the Constitution “as a whole” is not clear and concrete enough, that the petition of the petitioner requesting an investigation into the compliance of, inter alia, Article 4 of the Law (wording of 28 January 2003) with the Constitution “as a whole” does not meet the requirements of Items 8 and 9 of Paragraph 1 of Article 66 of the Law on the Constitutional Court and does not have its independent content that could be dissociated from the petition requesting an investigation into whether Article 4 of the Law (wording of 28 January 2003) is not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

4. It is clear from the arguments of the petitioner that it faced doubts as to the compliance of not entire Article 4 of the Law (wording of 28 January 2003) with all the specified articles of the Constitution, but only as to whether Paragraph 1 of Article 4 of the Law (wording of 28 January 2003) to the extent that it established different maximum sizes of agricultural land plots which are permitted to be acquired by natural persons, agricultural companies and legal persons was not in conflict with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

5. Under Paragraph 1 of Article 4 of the Law (wording of 28 January 2003), natural and legal persons might, under this law, acquire land inasmuch as the total area of agricultural land owned by one person should not exceed: 300 ha for a natural person who has registered a farmer’s farm and has a qualification certificate testifying to his preparedness to engage in farming, except for the cases when the agricultural holding owned by two spouses exceeded the said area as a result of registration of their marriage or when the land was acquired before the entry into force of this Law (Item 1); 2000 ha for an agricultural company (Item 2); 1000 ha for a co-operative (co-operative society) or any other legal person who engages in agricultural activities (Item 3).

6. On 15 July 2004, the Seimas adopted the Republic of Lithuania’s Law on Amending the Provisional Law on the Acquisition of Agricultural Land (Official Gazette Valstybės žinios, No. 124-4490) by Article 1 whereof it amended the Provisional Law on the Acquisition of Agricultural Land (wording of 28 January 2003 with subsequent amendment and supplement) and set it forth in its new wording. The law came into force in this wording (hereinafter also referred to as the Law (wording of 15 July 2004)) on 7 August 2004.

7. Under Paragraph 1 of Article 4 of the Law (wording of 15 July 2004), persons may acquire, under the right of ownership, land inasmuch as the total area of agricultural land owned by one person, acquired from the state or other persons, should not exceed: 300 ha for a natural person (Item 1); 2000 ha for a legal person (Item 2). Item 1 of this paragraph also provides that a person, who has acquired an agricultural land plot bigger than 300 ha, cannot, under this law, acquire agricultural land.

Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) has not been either amended or supplemented.

8. If one compares the legal regulation established in Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) with that established in Paragraph 1 of Article 4 of the Law (wording of 28 January 2003), it is clear that the legal regulation was amended, inter alia, in the aspect that the maximum size of the agricultural land area allowed to be acquired for legal persons of all forms was made equal—now it is established as 2000 ha.

Alongside, it needs to be noted that by the Constitutional Court’s decision of 14 March 2006, which was adopted in this constitutional justice case, it was held that the general provision that different maximum areas of agricultural land are allowed to be acquired by different subjects, on the compliance of which with the Constitution the petitioner had doubts, remained consolidated in the Law (wording of 15 July 2004).

9. Under Paragraph 4 (wording of 11 July 1996) of Article 69 of the Law on the Constitutional Court, the annulment of the impugned legal act shall be grounds to adopt a decision to dismiss the instituted legal proceedings. In its acts the Constitutional Court has held more than once that in cases where the Constitutional Court is applied by courts, which in the course of administration of justice has doubts as to the compliance of a legal acts of lower legal force with legal acts of higher legal force, inter alia (and, first of all), with the Constitution, the Constitutional Court, under the Law on the Constitutional Court, does not enjoy the powers to dismiss the instituted legal proceedings but it has a duty to consider the petition of the court regardless of whether or not the impugned legal act (part thereof) is in force; the Constitutional Court may, by taking account of the circumstances of the constitutional justice case at issue, by invoking the ground provided for in Paragraph 4 (wording of 11 July 1996) of Article 69 of the Law on the Constitutional Court, dismiss the instituted legal proceedings in cases when it was applied not by a court, but another subject specified in Article 106 of the Constitution. The same can be said about the situations where the impugned legal act (part thereof) was not annulled, but the legal regulation established therein was changed.

10. Taking account of the arguments set forth, the part of the case concerning the compliance of Paragraph 1 of Article 4 of the Law (wording of 28 January 2003) to the extent that it established different maximum sizes of agricultural land plots which are permitted to be acquired by natural persons, agricultural companies and legal persons with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution must be dismissed.

In the constitutional justice case at issue, the Constitutional Court will investigate whether Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) is not in conflict with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

II

On the compliance of Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

1. Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) establishes the maximum sizes of agricultural land plots which are permitted to be acquired (to natural persons—300 ha, and legal persons—2000 ha) and also consolidates the provision that the prohibition for a natural person to acquire, by right of ownership, agricultural land from the state or other persons the total area of which is not bigger than 300 ha, is applied to all natural persons (including those who acquire land under this law and those who acquired such land prior to the entry into force of this law—under this law, they already cannot acquire such land).

2. Land is an important part of the ecosystem, it determines the existence and change of other natural resources (inter alia, water bodies, plants and wildlife). Land is a special natural resource in the aspect that it cannot be replaced by something else, nor newly created, nor increased otherwise. Thus, land is a limited resource.

The proper use of land as a limited resource is a condition of the survival of the human being and society as well as the basis of the welfare of the Nation; the ensuring of rational use of land as a natural resource is a public interest to guarantee which is a constitutional obligation of the state (the Constitutional Court’s rulings of 13 May 2005 and 14 March 2006). The duty of the state is to ensure that land should be used rationally and that it be protected arises from, inter alia, the provisions of Article 54 of the Constitution whereby the state shall take care of the protection of the natural environment, wildlife and plants, individual objects of nature and areas of particular value and shall supervise a sustainable use of natural resources, their restoration and increase (Paragraph 1) and that the destruction of land and the underground, the pollution of water and air, radioactive impact on the environment as well as depletion of wildlife and plants shall be prohibited by law (Paragraph 2), as well as from the constitutional imperative of social harmony and other provisions of the Constitution. It needs to be noted that rational use of land is inseparable from its protection, inter alia, from preservation of rich soil and the landscape, protection of land from contamination, improper use and other negative factors, as well as it is inseparable from ensuring freedom of agricultural business.

Land is a special object of ownership (the Constitutional Court’s rulings of 13 May 2005 and 14 March 2006). The possession of land lots by right of ownership may be one of essential conditions for starting and developing a business and one of necessary pre-conditions for engaging in economic activities. When legally regulating the relations linked with use of land for business and economic activities, one must pay heed to the specificity of the nature of land as a natural resource and of land as real property.

An opportunity and necessity arise from the Constitution to legally regulate the relations linked with acquisition, possession and transfer of land as of a special object (and as one of the conditions of a business—one of the preconditions for engaging in business activity) so that no preconditions are created to inflict harm upon land as a special value defended and protected by the Constitution, nor to violate other constitutional values.

3. The aforesaid opportunity and necessity that arise from the Constitution imply, inter alia, that the legal regulation of these relations cannot not have certain peculiarities, if compared with the legal regulation of other property relations. The Constitutional Court has held that the bases of differentiated legal regulation related with, inter alia, the ownership of land (as well as of other objects of natural environment) arise from the Constitution itself (the Constitutional Court’s ruling of 14 March 2006).

One of the bases of legal regulation of these relations is the relation of the corresponding person (a person who seeks to acquire land by right of ownership, or a land owner) with the State of Lithuania, i.e. that fact that he is either a national subject or a foreign subject: Paragraph 3 of Article 47 of the Constitution provides that in the Republic of Lithuania foreign subjects may acquire ownership of land, internal waters and forests according to a constitutional law.

In the context of the constitutional justice case at issue, it needs to be especially noted that land is not the same as regards its character and useful features. The Constitutional Court has held that the Constitution does not prohibit grouping land and other objects of natural environment according to various criteria, inter alia, according to the purpose of their use; this must be done when taking account of characteristics of corresponding natural objects and other factors of natural environment (the Constitutional Court’s ruling of 14 March 2006).

In this context it needs to be noted that in Paragraph 1 (wording of 25 October 1992) of Article 47 of the Constitution established the right of only citizens of the Republic of Lithuania and of the state to hold land by right of ownership, save one exception: plots of land could belong to a foreign state by right of ownership for the establishment of its diplomatic missions and consular posts according to the procedure and conditions established by law (Paragraph 2 (wording of 25 October 1992) of Article 47 of the Constitution). Paragraph 2 (wording of 20 June 1996) of Article 47 of the Constitution specified expressis verbis that municipalities, other national subjects as well as those foreign subjects conducting economic activities in Lithuania which are specified by the constitutional law in accordance with the criteria of European and Transatlantic integration chosen by the Republic of Lithuania may be permitted to acquire the ownership of non-agricultural land plots; also the limits on the sizes of such land lots of non-agricultural land, which were acquired as ownership, were established—such lots had to be required for the construction and operation of buildings and facilities necessary for the direct activities of such subjects. Foreign subjects had been prohibited from acquiring agricultural land in Lithuania prior to the entry into force of the 23 January 2003 Law on Amending Article 47 of the Constitution of the Republic of Lithuania on 24 February 2003, by Article 1 whereof Article 47 (wording of 20 June 1996) of the Constitution was amended and set forth in its new wording.

Although Article 47 (wording of 23 January 2003) of the Constitution no longer contains the provision explicitly mentioning non-agricultural land (or land of any other purpose), it does not mean that it is impossible to differentiate the legal regulation of relations of land (inter alia, of land property and of its use) according to whether corresponding land lots may be categorised as agricultural land or as land of other purpose.

4. It is permitted to make changes in the categorisation of land lots that groups them as agricultural land or as land of other purpose (inter alia, after qualitative changes in corresponding resources of land take place).

In this context, it should be mentioned that agricultural land is a limited natural resource of exceptional value, its quality and areas with rich soil are constantly decreasing due to industrial impact, urban expansion and other factors. In order to preserve the useful characteristic of agricultural land, the legislature has a duty to establish clear criteria of changing agricultural land into land of other purpose, while in the course of changing the purpose of land one must pay heed to the public interest.

5. When regulating, in a differentiated manner, the relations linked with land property and its use, the legislature, when taking account of the type (category) of land, may establish a land legal regime, inter alia, the conditions, limitations and prohibitions regarding the property, its use, economic and other activity. The said limitations and prohibitions must be constitutionally grounded.

Such limitations and prohibitions may be established to all natural and legal persons, regardless of by what right the agricultural land is possessed, i.e. whether by right of ownership, rent, use or other right.

It needs to be especially emphasised that the law must establish such legal regulation whereby land lots, if they are categorised as agricultural land, are used in particular for agricultural purpose by the owners and/or users, that the character of agricultural land is preserved until the purpose of agricultural land is changed according to the criteria established by law.

Under the Constitution, the legislature has a duty to establish the corresponding means of control and sanctions for failure to follow the established requirements. The legislature may also provide, by means of a law, such means of social engineering, which would induce the owners and/or users of agricultural land lots to use these lots precisely according to the established purpose of that land.

6. Taking account of the nature of land as a limited resource, as well as of the necessity to preserve the useful characteristics of agricultural land, it should be held that the legislature may also establish, by means of a law, the maximum sizes of land lots which are permitted to be acquired by right of ownership.

In the context of the constitutional justice case at issue, it needs to be noted that the possibility of the differentiated legal regulation of relations linked with land property and use, inter alia, according to the purpose of land, implies also an opportunity to legislatively establish different maximum sizes of agricultural land lots and of land lots of different purpose, which are allowed to be acquired by right of ownership.

However, it needs to be emphasised that when different maximum sizes of agricultural land lots and of land lots of different purpose, which are allowed to be acquired by right of ownership, are being established, one may not violate the norms and principles of the Constitution, inter alia, the imperative of social harmony, justice, proportionality, the equality of rights of persons and other principles. Under the Constitution, it is not permitted to establish any such legal regulation whereby unequal economic conditions are established to the existing or potential business subjects, whereby the development of a business is hindered, and freedom of economic activity as well as the economic efforts useful to society and initiative are restricted.

It needs to be underlined that the maximum sizes of agricultural land lots permitted to be acquired by right of ownership must be determined by the character of agricultural land and the public interest sought, but not by such criteria, which cannot be grounded constitutionally (as, for instance, a requirement that the acquirers of agricultural land lots should either farm that land by themselves, or live in a corresponding locality, so that they would be forced to choose a certain form of farming, which is possible under laws, etc.).

It needs to be held that in itself the establishment (by means of a law) of maximum sizes of agricultural land lots permitted to be acquired by right of ownership does not mean that the right of ownership of a person, freedom of economic activity and other constitutional rights and freedoms are constitutionally groundlessly restricted. On the contrary, the establishment of such maximum sizes may be one of the means creating preconditions for a rational management of agricultural land, the preservation of tilled agricultural land, the proper development of agricultural business, the promotion of fair competition in agriculture, the non-permission to monopolise the production and the market, etc.

Such aspirations grounding the maximum sizes of agricultural land lots permitted to be acquired by right of ownership should be treated as expressing a public interest protected by the Constitution.

In this context, it should be mentioned that the Constitution does not contain any prohibition against establishing by law the minimum sizes of agricultural land lots permitted to be acquired by right of ownership, for instance, the size which is necessary in order that a natural person might register the farm of a farmer, also in order to help prevent possible abuses, as, for instance, the acquisition of agricultural land lots and registering the farm of a farmer (allegedly meant for agricultural activities) only for the purpose of making use of corresponding exceptions to and concessions in the legal regulation and of making use of the state and other support, while the said agricultural land was used not for agricultural, but other activities.

7. In the context of the constitutional justice case at issue, it needs to be emphasised especially that, under the Constitution, it is not impermissible in general to establish (by means of a law) different maximum sizes of land lots of the same purpose (including agricultural land) which are permitted to be acquired by right of ownership.

However, under the Constitution, it is not permitted to establish any such legal regulation where the maximum sizes of agricultural land lots permitted to be acquired by right of ownership would be established in regard of different subjects by failing to follow the constitutionally grounded criteria, since, otherwise, one would create pre-conditions for violating the constitutional rights of some of these subjects, inter alia, the right to freely choose a business, the constitutional principle of the equality of rights of persons and other provisions of the Constitution, and one would permit the distortion of fair competition in the agricultural market.

8. As mentioned before, Item 2 of Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) established the maximum size of agricultural land lots permitted to be acquired by legal persons by right of ownership as 2000 ha.

It needs to be held that in the constitutional justice case at issue there are no legal arguments permitting one to assert that the established maximum size is groundless, disproportionate or unjust in any other regard, that by such legal regulation a certain right or freedom of the person would be restricted more than necessary when the constitutionally grounded public interest is being sought. Therefore, there are not any legal arguments, either, to assert that the establishment of the said maximum size violates Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

9. The maximum size—300 ha—of agricultural land lots permitted to be acquired by natural persons by right of ownership, which is established in Item 1 of Paragraph 1 of Article 4 of the Law (wording of 15 July 2004), should be assessed differently.

It has been held in this ruling of the Constitutional Court that that the maximum sizes of agricultural land lots permitted to be acquired by right of ownership must be determined by the character of agricultural land and the public interest sought, but not by such criteria, which cannot be grounded constitutionally, as, for instance, a requirement that the acquirers of agricultural land lots should either farm that land by themselves, or live in a corresponding locality, so that they would be forced to choose a certain form of farming, which is possible under laws, etc. It was also held that although under the Constitution, in general, it is permissible to establish (by means of a law) different maximum sizes of agricultural land lots which are permitted to be acquired by right of ownership, however, under the Constitution, it is not permitted to establish any such legal regulation where the maximum sizes of agricultural land lots permitted to be acquired by right of ownership would be established in regard of different subjects by failing to follow the constitutionally grounded criteria, since, otherwise, one would create pre-conditions for violating the constitutional rights of some of these subjects, inter alia, the right to freely choose a business, the constitutional principle of the equality of rights of persons and other provisions of the Constitution, and one would permit the distortion of fair competition in the agricultural market.

It needs to be held that there are not any differences of the character and extent between legal and natural persons, who seek, subsequent to the Law (wording of 15 July 2004), to acquire agricultural land which would be used for agricultural activities, which would justify the maximum size—300 ha—of agricultural land lots permitted to be acquired by natural persons by right of ownership, when in regard of legal persons such size is much bigger, i.e. 2000 ha. By such legal regulation, natural persons are discriminated in regard of legal persons, the opportunities of the former to compete in the agricultural market are limited, and freedom of their business is disproportionately restricted.

10. Taking account of the arguments set forth, the conclusion should be drawn that Item 1 of Paragraph 1 of Article 4 of the Law (wording of 15 July 2004), to the extent that it provides that the maximum size of agricultural land lots permitted to be acquired by natural persons by right of ownership is 300 ha, but not 2000 ha, is in conflict with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

11. Having held this, on the grounds of the same arguments, it should also be held that the provision “a person who acquired an agricultural land plot bigger than 300 ha prior to the entry into force of this Law cannot, under this Law, acquire agricultural land” of Paragraph 1 of Article 4 of the Law (wording of 15 July 2004) to the extent that it consolidates that the persons who acquired an agricultural land plot bigger than 300 ha prior to the entry into force of this law cannot, under this law, acquire agricultural land inasmuch as the total area of agricultural land belonging to him by right of ownership is not bigger than 2000 ha, is in conflict with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution.

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania, and Articles 1, 53, 54, 55, 56 and Paragraph 4 of Article 69 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Item 1 of Paragraph 1 of Article 4 of the Republic of Lithuania’s Provisional Law on the Acquisition of Agricultural Land (wording of 15 July 2004; Official Gazette Valstybės žinios, 2004, No. 124-4490), to the extent that it provides that the maximum size of agricultural land lots permitted to be acquired by natural persons by right of ownership is 300 ha, but not 2000 ha, is in conflict with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution of the Republic of Lithuania.

2. To recognise that the provision “a person who acquired an agricultural land plot bigger than 300 ha prior to the entry into force of this Law cannot, under this Law, acquire agricultural land” of Item 1 of Paragraph 1 of Article 4 of the Republic of Lithuania’s Provisional Law on the Acquisition of Agricultural Land (wording of 15 July 2004; Official Gazette Valstybės žinios, 2004, No. 124-4490) to the extent that it consolidates that the persons who acquired an agricultural land plot bigger than 300 ha prior to the entry into force of this law cannot, under this law, acquire agricultural land inasmuch as the total area of agricultural land belonging to him by right of ownership is not bigger than 2000 ha, is in conflict with Paragraph 1 of Article 29, the provision “the law shall <…> protect freedom of fair competition” of Paragraph 4 of Article 46 and the provision “each human being may freely choose a <…> business” of Paragraph 1 of Article 48 of the Constitution of the Republic of Lithuania.

3. To recognise that Item 2 of Paragraph 1 of Article 4 of the Republic of Lithuania’s Provisional Law on the Acquisition of Agricultural Land (wording of 15 July 2004; Official Gazette Valstybės žinios, 2004, No. 124-4490) is not in conflict with the Constitution of the Republic of Lithuania.

4. To dismiss the part of the case concerning the compliance of Paragraph 1 of Article 4 of the Republic of Lithuania’s Provisional Law on the Acquisition of Agricultural Land (wording of 28 January 2003; Official Gazette Valstybės žinios, 2003, No. 15-600) to the extent that it established different maximum sizes of agricultural land plots which are permitted to be acquired by natural persons, agricultural companies and legal persons with the Constitution of the Republic of Lithuania.

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

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:                Armanas Abramavičius

                                                                                     Toma Birmontienė

                                                                                     Egidijus Kūris

                                                                                     Kęstutis Lapinskas

                                                                                     Zenonas Namavičius

                                                                                     Ramutė Ruškytė

                                                                                     Vytautas Sinkevičius

                                                                                     Stasys Stačiokas

                                                                                     Romualdas Kęstutis Urbaitis