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On dismissing legal proceedings in a case

Case No. 51/06

 

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

DECISION

ON THE DISMISSAL OF THE LEGAL PROCEEDINGS IN THE CASE SUBSEQUENT TO THE PETITION OF A GROUP OF MEMBERS OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA, THE PETITIONER, REQUESTING AN INVESTIGATION INTO WHETHER PARAGRAPH 1 (WORDING OF 22 JUNE 2006) OF ARTICLE 19 OF THE REPUBLIC OF LITHUANIA’S LAW ON PUBLIC TRADING IN SECURITIES IS NOT IN CONFLICT WITH ARTICLES 23, 46 AND 48 OF THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

25 February 2008
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, and Vytautas Sinkevičius

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, at its procedural sitting, considered the petition of a group of members of the Seimas of the Republic of Lithuania, the petitioner, composed of Julius Veselka, Vytautas Bogušis, Saulius Lapėnas, Liudvikas Sabutis, Egidijus Klumbys, Marija Aušrinė Povilionienė, Ona Valiukevičiūtė, Vytautas Galvonas, Rimantas Smetona, Algimantas Matulevičius, Algirdas Ivanauskas, Skirmantas Pabedinskas, Vladimiras Volčiok, Etela Karpickienė, Audronė Pitrėnienė, Gintaras Šileikis, Vytautas Sigitas Draugelis, Jonas Pinskus, Saulius Girdauskas, Andrius Baranauskas, Gintautas Mikolaitis, Juozas Palionis, Bronius Bradauskas, Birutė Vėsaitė, Albertas Sereika, Viktoras Rinkevičius, Rima Baškienė, Irina Rozova, Jonas Juozapaitis, Romas Venclovas, Viačeslav Škil, Virginijus Domarkas, Valentinas Mazuronis, Remigijus Ačas, Dailis Alfonsas Barakauskas, Vilija Vertelienė, Ramunė Visockytė, Zita Žvikienė, Zenonas Mikutis, Romualda Kšanienė, Vaclovas Stankevičius, Vaclovas Karbauskis, Audrius Enzinas, Eligijus Masiulis, Algirdas Monkevičius, Alvydas Sadeckas, Algirdas Sysas, Milda Petrauskienė, Artūras Paulauskas, Virginija Baltraitienė, Vytautas Kamblevičius, Edvardas Žakaris, Algimantas Salamakinas, Algis Rimas, Algirdas Paleckis, Irena Šiaulienė, Vytautas Saulis, Jadvyga Zinkevičiūtė, Dangutė Mikutienė, Petras Gražulis, Alfredas Pekeliūnas, Laima Mogenienė, Arimantas Dumčius, Rimantas Jonas Dagys, Jonas Čekuolis, Julius Dautartas, Rytis Kupčinskas, Vida Marija Čigrejienė, Povilas Jakučionis, Antanas Napoleonas Stasiškis, Kazys Starkevičius, Henrikas Žukauskas, Bronius Pauža, Vladimir Orechov, and Leokadija Počikovska, the petitioner, requesting an investigation into whether Paragraph 1 of Article 19 of the Republic of Lithuania’s Law on Amending and Supplementing Articles 2, 6, 7, 13, 14, 17, 18, 19, 191, 40, 45, 52 and 61 of the Law on Public Trading in Securities, Supplementing the Law with the Third1 Section and Supplementing the Annex to the Law is not in conflict with Articles 23, 46 and 48 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

1. A group of members of the Seimas, the petitioner, applied to the Constitutional Court with the petition requesting an investigation into whether the provision “an issuer’s shareholder, who acts independently or concurrently with other persons, after he has acquired shares amounting to not less than 95 per cent of the capital which grants the right to vote and not less than 95 per cent of all the shares of this issuer which grant the right to vote in the general shareholder’s meeting, shall have the right to require that all other shareholders of this issuer sell the shares which grant the right to vote and which belong to them, and they must sell them under the procedure established in this Law” of Paragraph 1 of Article 19 of the Law on Amending and Supplementing Articles 2, 6, 7, 13, 14, 17, 18, 19, 191, 40, 45, 52 and 61 of the Law on Public Trading in Securities, Supplementing the Law with the Third1 Section and Supplementing the Annex to the Law, which was adopted on 22 June 2006, is not in conflict with Articles 23, 46 and 48 of the Constitution.

This petition was received at the Constitutional Court on 20 October 2006.

2. By the 2 November 2006 ordinance (No. 2B-160) of the President of the Constitutional Court, subsequent to the petition of a group of members of the Seimas, the petitioner, the preparation of case No. 51/06 for the Constitutional Court’s hearing was begun.

The Constitutional Court

holds that:

1. On 22 June 2006, the Seimas adopted the Law on Amending and Supplementing Articles 2, 6, 7, 13, 14, 17, 18, 19, 191, 40, 45, 52 and 61 of the Law on Public Trading in Securities, Supplementing the Law with the Third1 Section and Supplementing the Annex to the Law which came into force on 14 July 2006. Article 6 of this law amended, inter alia, Paragraph 1 (wording of 23 June 2005) of Article 19 of the Republic of Lithuania’s Law on Public Trading in Securities and set it forth in its new wording.

2. The Law on Amending and Supplementing Articles 2, 6, 7, 13, 14, 17, 18, 19, 191, 40, 45, 52 and 61 of the Law on Public Trading in Securities, Supplementing the Law with the Third1 Section and Supplementing the Annex to the Law was composed of 12 articles; it did not include Article 19.

It needs to be held that the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether, according to the petitioner, Paragraph 1 of Article 19 of the Law on Amending and Supplementing Articles 2, 6, 7, 13, 14, 17, 18, 19, 191, 40, 45, 52 and 61 of the Law on Public Trading in Securities, Supplementing the Law with the Third1 Section and Supplementing the Annex to the Law is not in conflict with Articles 23, 46 and 48 of the Constitution, should be regarded as a petition requesting an investigation into whether Paragraph 1 (wording of 22 June 2006) of Article 19 of the Republic of Lithuania’s Law on Public Trading in Securities is not in conflict with Articles 23, 46 and 48 of the Constitution.

3. Paragraph 1 (wording of 22 June 2006) of Article 19 of the Law on Public Trading in Securities prescribed: “An issuer’s shareholder, who acts independently or concurrently with other persons, after he has acquired shares amounting to not less than 95 per cent of the capital which grants the right to vote and not less than 95 per cent of all the shares of this issuer which grant the right to vote in the general shareholder’s meeting, shall have the right to require that all other shareholders of this issuer sell the shares which grant the right to vote and which belong to them, and they must sell them under the procedure established in this Law”.

4. On 18 January 2007, the Seimas adopted the Republic of Lithuania’s Law on Securities which came into force on 8 February 2007. Paragraph 1 of Article 48 of this law prescribed: “Upon the entry into force of this Law, <...> Section Two, save Article 141, Sections Three and Three1 and Items 1, 2, 5 and 9 of Paragraph 1 of Article 61 of the Republic of Lithuania’s Law on Public Trading in Securities shall become no longer effective.”

Article 19 (wording of 22 June 2006) of the Law on Public Trading in Securities, the legal regulation enshrined in Paragraph 1 whereof is impugned by a group of members of the Seimas, the petitioner, was set forth in Section Three1 of this law. Thus, Paragraph 1 (wording of 22 June 2006) of Article 19 of the Public Trading in Securities which is impugned by a group of members of the Seimas, the petitioner, became no longer effective on 8 February 2007.

5. In this context, it also needs to be mentioned that, on 18 January 2007, the Seimas adopted the Republic of Lithuania’s Law on Markets in Financial Instruments which (as well as the Law on Securities) came into force on 8 February 2007. Paragraph 2 of Article 99 of the Law on Markets in Financial Instruments prescribed, inter alia, that “upon the entry into force of this law, the following shall become no longer valid: <...> (15) the Republic of Lithuania’s Law on Amending and Supplementing Articles 2, 6, 7, 13, 14, 17, 18, 19, 191, 40, 45, 52 and 61 of the Law on Public Trading in Securities, Supplementing the Law with the Third1 Section and Supplementing the Annex to the Law”, i.e. the law which becomes no longer valid is the law which is specified by a group of members of the Seimas, the petitioner, in its petition, and by Article 6 of which, as it has been mentioned, Paragraph 1 (wording of 23 June 2005) of Article 19 of the Law in Securities was amended and set forth in its new wording.

6. Paragraph 1 of Article 37 of the Law on Securities prescribed: “An issuer’s shareholder, who acts independently or with other persons who act concurrently, after he has acquired shares amounting to not less than 95 per cent of the capital which grants the right to vote and not less than 95 per cent of all the votes in the general shareholder’s meeting, shall have the right to require that all other shareholders of this issuer sell the shares which grant the right to vote and which belong to them, and they must sell them under the procedure established in this Law”.

Thus, the legal regulation established in Paragraph 1 of Article 37 of the Law on Securities is virtually analogous to the legal regulation which is enshrined in Paragraph 1 (wording of 22 June 2006) of Article 19 of the Law on Public Trading in Securities, whose compliance with the Constitution is impugned by a group of members of the Seimas, the petitioner.

Alongside, it needs to be noted that the legal regulation established in Paragraph 1 of Article 37 of the Law on Securities should be construed and assessed (inter alia, in the aspect of its compliance with the Constitution) in the context of the legal regulation which is established in this law and which is far from being analogous to the legal regulation which was enshrined in the Law on Public Trading in Securities which was no longer effective.

7. It needs also to be noted that 75 members of the Seimas have applied to the Constitutional Court with the petition requesting an investigation into the compliance of Paragraph 1 (wording of 22 June 2006) of Article 19 of the Law on Public Trading in Securities with the Constitution. It is obvious from the shorthand records of the sitting of the Seimas of 18 January 2007, in which the Law on Securities was adopted, that 51 members of the Seimas from the group of members of the Seimas which had requested the Constitutional Court to investigate the compliance of Paragraph 1 (wording of 22 June 2006) of Article 19 of the Law on Public Trading in Securities voted for the adoption of the Law on Securities, the legal regulation enshrined in Article 37 whereof, as it has been held in this decision of the Constitutional Court, is essentially analogous to the legal regulation enshrined in Paragraph 1 (wording of 22 June 2006) of Article 19 of the Law on Public Trading in Securities. The fact that 51 members of the Seimas, who doubted the compliance of the corresponding provision of the law with the Constitution, later voted for an essentially analogous provision enshrined in another law, creates the ground to think that the doubt which had arisen earlier to these members of the Seimas regarding the compliance of the provision impugned by a group of members of the Seimas, the petitioner, with the Constitution, disappeared; otherwise, they would hardly have voted for the adoption of the provision, the compliance of which with the Constitution they doubted and which they had impugned .

8. In Paragraph 4 of Article 68 of the Law on the Constitutional Court it is established that the annulment of the impugned legal act shall be grounds to adopt a decision to dismiss the instituted legal proceedings and that if it becomes clear before the beginning of the Court hearing, the Constitutional Court shall decide this question in the deliberation room.

The Constitutional Court has held in its acts more than once that the formula “shall be the grounds <...> to dismiss the instituted legal proceedings” of Paragraph 4 of Article 69 of the Law on the Constitutional Court should be construed as establishing the powers of the Constitutional Court, in cases, when not courts, but other subjects specified in Article 106 of the Constitution apply to the Constitutional Court, to dismiss the instituted legal proceedings upon taking account of the circumstances of the case at issue.

Conforming to Article 28 and Paragraph 4 of Article 69 of the Republic of Lithuania’s Law on the Constitutional Court, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

To dismiss the instituted legal proceedings in case No. 51/06 subsequent to the petition of a group of members of the Seimas of the Republic of Lithuania, the petitioner, requesting an investigation into whether Paragraph 1 (wording of 22 June 2006, Official Gazette Valstybės žinios, 2006, No. 77-2963) of Article 19 of the Republic of Lithuania’s Law on Public Trading in Securities is not in conflict with Articles 23, 46 and 48 of the Constitution of the Republic of Lithuania.

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

The decision 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