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On dismissing legal proceedings

Case No. 14/03

 

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 ARTICLES 3, 5, 6, 8 (WORDING OF 28 JANUARY 2003) OF THE REPUBLIC OF LITHUANIA’S PROVISIONAL LAW ON THE ACQUISITION OF AGRICULTURAL LAND ARE NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

14 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

The Constitutional Court of the Republic of Lithuania, at its procedural sitting, has considered the petition of a group of members of the Seimas of the Republic of Lithuania, the petitioner, 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) are not in conflict with the Constitution of the Republic of Lithuania “as a whole” and with Articles 18, 23, 29, 32, 46 and 48 of the Constitution of the Republic of Lithuania.

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 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) are not in conflict with the Constitution “as a whole” and with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

2. By the 18 March 2003 ordinance (No. 2B-27) of the President of the Constitutional Court, subsequent to this petition, the preparation of case No. 14/03 for the Constitutional Court’s hearing was begun.

II

The petition of the petitioner is based on the following arguments.

1. The law establishes the restrictions on the acquisition of agricultural land. By most of these restrictions, the number of persons who can acquire the agricultural land has been significantly decreased, the competition in agricultural market has been restricted and the possibilities for a person to choose a desirable business have been limited.

2. Taken separately, the constitutional ownership rights of a person are restricted by: the possibility of the annulment of the land transactions if the Law is violated while executing them; a permission to purchase agricultural land only to the person who has registered a farmer’s farm or has the qualification certificate, testifying to his preparedness to engage into farming (it deprives most persons of the opportunity to acquire land, and those who possess land—of selling it at its real value); the establishment of the different maximum area of agricultural land acquired by natural persons, agricultural companies and legal persons; the right of priority to acquire state-owned agricultural land (violating fair competition and the principle of equality of persons) to certain categories of persons. Moreover, conditions have been created to ensure the security of obligations by way of mortgaging only to the banks and other credit institutions; in this way the rights of the owner to dispose of his property are violated, moreover, economic subjects are treated differently without objective grounds.

The Constitutional Court

holds that:

1. The petitioner requests an investigation into whether Articles 3, 4, 5, 6 and 8 (wording of 28 January 2003) of the Law are not in conflict with, inter alia, the Constitution “as a whole”.

2. It should be 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.

3. Under Item 8 of Paragraph 1 of Article 66 of the Republic of Lithuania’s Law on the Constitutional Court, a petition requesting an investigation into the compliance of a legal act with the Constitution must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing references to laws.

While construing this item of the Law on the Constitutional Court, in its decision of 16 April 2004, the Constitutional Court held that “the position of the petitioner concerning the compliance of a legal act (part thereof) with the Constitution according to the content of the norms and/or the scope of regulation must be indicated clearly, 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 an investigation into the compliance of a legal act (part thereof) with the Constitution according to the content of norms and/or the scope 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, to which, in the opinion of the petitioner, contradict the concretely indicated articles or items of the impugned legal act. The petition requesting an investigation into the compliance of a legal act (part thereof) with the Constitution according to the content of norms and/or the scope of regulation must also clearly indicate the legal arguments grounding the doubt of the petitioner as regards every concretely indicated article (part thereof) or item of the impugned legal act, the compliance of which with the concretely indicated provision of the Constitution is doubtful to the petitioner. Otherwise, the petition requesting an investigation into the compliance of a legal act (part thereof) with the Constitution according to the content of norms and/or the scope of regulation must be considered to be not in line with the requirements of Article 66 of the Law on the Constitutional Court”.

According to Article 70 of the Law on the Constitutional Court, in the case that a petition or attachments thereto fail to comply with, inter alia, the requirements set forth in Articles 66 of this law, the petition must be 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.

4. The petition of the petitioner requesting an investigation into whether Articles 3, 4, 5, 6 and 8 (wording of 28 January 2003) of the Law are not in conflict with, inter alia, 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 may not be investigated by the Constitutional Court.

5. It should also be emphasised that the petitioner requests an investigation into whether Articles 3, 4, 5, 6 and 8 (wording of 28 January 2003) of the Law are not in conflict not only with the Constitution “as a whole” but also with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

It should be held that the petition requesting an investigation into the compliance of a legal act (part thereof) with the Constitution “as a whole” does not have its independent content that could be dissociated from the petition requesting an investigation into whether Articles 3, 4, 5, 6 and 8 (wording of 28 January 2003) of the Law are not in conflict with, inter alia, Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

Thus, the individual decision on returning of the petition requesting an investigation into whether Articles 3, 4, 5, 6 and 8 (wording of 28 January 2003) of the Law are not in conflict with the Constitution “as a whole” to the petitioner (after the reasoning has been specified that the petition does not meet the requirements of Items 8 and 9 of Paragraph 1 of Article 66 of the Law on the Constitutional Court) need not be formulated in the operative part of this decision of the Constitutional Court.

II

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

2. In Article 3 (wording of 28 January 2003) of the Law it was established:

1. A natural person may acquire agricultural land by the right of ownership provided he has registered a farmer’s farm under the procedure prescribed by the Law on Farmer’s Farm or has a qualification certificate issued by an institution authorised by the Government, testifying to his preparedness to engage in farming.

2. A qualification certificate testifying to a person’s preparedness to engage in farming shall be issued to persons who have been engaged in agricultural activities for over 2 years and have a diploma or certificate of agricultural education acquired in Lithuania or a European Union member state, or to persons who have been engaged in agricultural activities for over 5 years and have passed a qualification examination in accordance with the procedure established by the Government.

3. The provisions of Paragraph 1 of this Article shall not apply in cases when, after the acquisition of the land, the area of a plot of land held by the right of ownership would not exceed 3 ha of farming land.

4. A natural person who has acquired a plot of agricultural land exceeding 10 ha by the right of ownership in accordance with this Law must, within 1 year, resettle in the county where the land used for farming is located and acquire or get a permit to build farm buildings needed for agricultural activities, and, within 2 years from the acquisition of the land, register a farmer’s farm. The term for resettlement in the county may be extended by the municipal board for a period not exceeding 1 year, provided that the construction of farm buildings or a dwelling house has started.

5. A legal person may acquire agricultural land by the right of ownership provided that it has earned at least 50 per cent of its income from agricultural activities for the 2 preceding years. This requirement shall not apply to the State, municipalities, gardeners’ associations acquiring public land leased to these associations, as well as banks and other credit institutions that take into their ownership the land which is mortgaged, but not sold in the manner prescribed by law.

6. Banks and other credit institutions must sell agricultural land acquired by the right of ownership within 2 years from the date of its acquisition, and lease the land for agricultural activities prior to the sale thereof.”

Although the petitioner requests an investigation into the compliance of Article 3 (wording of 28 January 2003) of the Law with, inter alia, Articles 18, 23, 29, 32, 46 and 48 of the Constitution, it is obvious from the arguments of the petition that it had doubts not as to the compliance of the whole Article 3 (wording of 28 January 2003) of the Law with all the specified articles of the Constitution, but as to the compliance of the following paragraphs of Article 3 (wording of 28 January 2003) of the Law with:

Paragraph 1 with Articles 18 and 23, Paragraph 1 of Article 29, Paragraphs 1, 3 and 4 of Article 46 and with the provision “each human being may freely choose a job or business” of Paragraph 1 of Article 48 of the Constitution;

Paragraph 4 with Articles 18 and 23, Paragraphs 1 and 2 of Article 32, Paragraphs 1 and 4 of Article 46 and with the provision “each human being may freely choose a job or business” of Paragraph 1 of Article 48 of the Constitution;

Paragraph 5 with Articles 18, 23 and 29, and with the provision “The law <…> shall protect freedom of fair competition” of Paragraph 4 of Article 46 of the Constitution.

3. In Article 8 (wording of 28 January 2003) of the Law it was established:

1. Land transactions shall be found invalid by courts, if they are concluded not in compliance with the conditions of this Law or if the persons who acquired the land violate the conditions of this Law.

2. Natural and legal persons shall pay taxes set by law for the transfer of the land, acquired under this Law, into ownership of other persons within a 5-year period after its acquisition. Such taxes shall be calculated on the basis of the average price of land plots sold in that locality (land market price).”

Although the petitioner requests an investigation into the compliance of Article 8 (wording of 28 January 2003) of the Law with, inter alia, Articles 18, 23, 29, 32, 46 and 48 of the Constitution, it is obvious from the arguments of the petitioner that it had doubts not as to the compliance of whole Article 8 (wording of 28 January 2003) of the Law with all the specified articles of the Constitution, but on the compliance of Paragraph 1 (wording of 28 January 2003) of Article 8 of the Law with Articles 18 and 23 of the Constitution.

4. On 15 July 2004, the Seimas adopted the Republic of Lithuania’s Law on Amending the Provisional Law on the Acquisition of Agricultural Land, whose Article 1 amended the Provisional Law on the Acquisition of Agricultural Land (wording of 28 January 2003) and set it forth in a new wording. The Provisional Law on the Acquisition of Agricultural Land of the new wording came into force on 7 August 2004. It does not include the former provisions of Articles 3 and 8 (wording of 28 January 2003) of the Law, on the compliance of which with the Constitution the petitioner doubted.

5. According to Paragraph 4 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.

The Constitutional Court has more than once held in its legal acts that the formula „shall be 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 right of the Constitutional Court to dismiss the instituted legal proceedings taking account of the circumstances of the case at issue in the cases, when the Constitutional Court is not applied by the courts, but by the subjects, specified in Article 106 of the Constitution. In its ruling of 4 March 2003, the Constitutional Court held that this can also be said regarding the cases when the impugned legal act (part thereof) is not abolished, however, the legal regulation established therein is changed.

6. Taking account of the arguments set forth, the instituted legal proceedings in the case subsequent to the petition of the petitioner requesting an investigation into whether Articles 3 and 8 (wording of 28 January 2003) of the Law are not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution, must be dismissed.

III

1. In Article 5 (wording of 28 January 2003) of the Law it was established:

1. State-owned agricultural land may be sold or otherwise transferred into the ownership of natural or legal persons in only those cadastre locations where restitution of land ownership rights has been completed according to the land reform land survey plans prepared under the procedure established by the Law on Land Reform, except for the transfer of land to municipalities for the performance of the functions set by law and the sale of the land plots, formed in the land reform land survey plans, to individual farm land users, farmers and agricultural companies which have been using the land for more than 5 successive years, upon expressing their wish to purchase the said land plots.

2. Natural and legal persons acquiring land for the purpose of expanding their farm holding to a rational size shall be entitled to soft credits granted under the procedure established by law.”

2. In Article 6 (wording of 28 January 2003) of the Law it was established:

1. The right of first priority to purchase state-owned agricultural land offered for sale shall be enjoyed by:

1) the individual farm land-users who have expressed their wish to purchase it—with regard to the land plots, formed in the land reform land survey plans;

2) farmers; and

3) agricultural companies which have been using the land for more than 5 successive years.

2. Persons who do not enjoy the right of first priority to purchase a state-owned plot of agricultural land, or in the cases where several persons enjoy equal rights of first priority to purchase the same plot of land, shall be sold the plot of land concerned at auction under the procedure established by the Government.

3. Persons who enjoy the right of first priority to purchase a state-owned plot of agricultural land, shall be sold a plot concerned at a price not exceeding the average price of the plots of land sold in that location (land market price).

4. The right of first priority to purchase private agricultural land at the price it is offered for sale and under other same conditions, except for the cases when the sale happens at public auction, shall be enjoyed by:

1) the state, when, according to a prepared detailed plan or other territorial planning document, the land concerned is intended for use for: national defence or protection of the state border; national airports, ports and their facilities; the construction of national railways, national roads and main pipelines, high-voltage electricity lines; constructions of national importance; the development of the infrastructure of cities, towns, and villages; common population needs and municipal needs; public construction and recreation; exploitation of mineral resources explored on public funds; implementation of economic projects of national importance the significance whereof is recognised by means of a decision taken by the Seimas or the Government;

2) the co-owner of a plot of land when the sale concerns a segment of the plot of land which is held by the right of common ownership;

3) the owner of a neighbouring plot of land provided this person is engaged in agricultural activities;

4) a farmer if the plot of land offered for sale lies within the prospective boundaries of the rational agricultural holding, formed in the land survey plan, of a farm owned by this person;

5) the user of the plot of land offered for sale who has used the land for agricultural activities for at least 2 successive years; and

6) the institution authorised under law or by the Government to take decisions concerning rearrangement of plots of land in accordance with land survey plans provided the plots of land being acquired are necessary for consolidation of the plots of land and for compensation to land owners with the equivalent area of state-owned land in the event of the appropriation of land for public needs.

5. The procedure for exercising the right of first priority set forth in Paragraphs 1 and 4 of this Article shall be established by the Government.”

3. The petition of the petitioner requesting an investigation into whether Articles 5 and 6 (wording of 28 January 2003) of the Law are not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution, is grounded on the argument that, in the opinion of the petitioner, the right of first priority for certain categories of persons to purchase state-owned agricultural land entrenched in these articles violates fair competition and the principle of equality of persons.

However, from the arguments of the petition of the petitioner it is not clear whether the petitioner doubts about the institute of the right of first priority to purchase state-owned agricultural land in general (i.e. whether, in its opinion, any right of first priority in this field may not in general be established) or on the way this institute is entrenched in Articles 5 and 6 (wording of 28 January 2003) of the Law (i.e. on the fact that this right is established not for the person or not only for the persons, for whom it should be established).

Thus, it is not clear to what extent and in which aspect the compliance of Articles 5 and 6 (wording of 28 January 2003) of the Law with Articles 18, 23, 29, 32, 46 and 48 of the Constitution is impugned.

4. It has been mentioned that, under Item 8 of Paragraph 1 of Article 66 of the Republic of Lithuania’s Law on the Constitutional Court, a petition requesting an investigation into on the compliance of a legal act with the Constitution must contain the position of the petitioner concerning the compliance of an appropriate act with the Constitution and legal support of such position containing references to laws, that a petition requesting an investigation into on the compliance of a legal act (part thereof) with the Constitution according to the contents of the norms and/or extent of the regulation must also clearly specify the legal reasons that ground the doubt of the petitioner on every item or article (part thereof) of the concretely specified impugned legal act (part thereof), regarding the compliance of which with the concretely specified provisions of the Constitution the petitioner has doubts, otherwise, the petition requesting an investigation into the compliance of the legal act (part thereof) with the Constitution according to the contents of the norms and/or extent of the regulation should be regarded as not meeting the requirements of Article 66 of the Law on the Constitutional Court. It has also been mentioned that under Article 70 of the Law on the Constitutional Court, in the case that a petition or attachments thereto fail to comply with, inter alia, the requirements set forth in Article 66 of this law, the petition must be 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.

5. It should be held that the petition of the petitioner requesting an investigation into whether Articles 5 and 6 (wording of 28 January 2003) of the Law are not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution does not meet the requirements of Item 8 of Paragraph 1 of Article 66 of the Law on the Constitutional Court and under Article 70 of this law must be returned to the petitioner and the instituted legal proceedings to the corresponding extent in the case must be dismissed.

IV

1. In Article 4 (wording of 28 January 2003) of the Law it was established:

1. Natural and legal persons may, under this Law, acquire so much land that the total area of agricultural land owned by one person should not exceed:

1) 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;

2) 2000 ha for an agricultural company;

3) 1000 ha for a co-operative (co-operative society) or any other legal person who engages in agricultural activities.

2. The provisions of Paragraph 1 of this Article shall not apply to banks and other credit institutions that, in the manner prescribed by law, acquire under the forced sale procedure the land mortgaged to them.”

2. In the opinion of the petitioner, the fact that, under Article 4 (wording of 28 January 2003) of the Law, different maximum area of agricultural land being acquired into ownership are established for natural persons, agricultural companies and any other legal persons, was in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution.

3. It has been mentioned that, on 15 July 2004, the Seimas adopted the Republic of Lithuania’s Law on Amending the Provisional Law on the Acquisition of Agricultural Land, whose Article 1 amended the Provisional Law on the Acquisition of Agricultural Land (wording of 28 January 2003) and set it forth in a new wording.

In Article 4 of the Law (wording of 15 July 2004) it was established:

1. Persons may acquire so much land that the total area of agricultural land, acquired from the State or other persons, owned by one person should not exceed:

1) 300 ha for a natural person. A person, who had acquired more agricultural land than 300 ha, under this law may not acquire any agricultural land;

2) 2000 ha for legal person.

2. The provisions of Paragraph 1 of this Article shall not apply when the land is acquired by inheritance or restoration of ownership right.”

3. While comparing the legal regulation established in Article 4 of the Law (wording of 15 July 2004) with the one, established in Article 4 (wording of 28 January 2003) of the Law, it is obvious that the general provision that different maximum areas of agricultural land are allowed to be acquired by different subjects, regarding the compliance of which with the Constitution the petitioner had doubts, remained consolidated in the Law.

The preparation of the constitutional justice case for the Constitutional Court’s hearing, subsequent to the petition of the petitioner requesting an investigation into whether Article 4 of the Law is not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution will be continued.

Conforming to Paragraphs 3 and 4 of Article 22, Article 28, Article 66, Paragraph 4 of Article 69 and Article 70 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

1. To dismiss the instituted legal proceedings in the part of the case subsequent to the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether Articles 5 and 6 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) are not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution of the Republic of Lithuania and to this extent to return the petition to the petitioner.

2. To dismiss the instituted legal proceedings in the case subsequent to the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether Articles 3 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) are not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution of the Republic of Lithuania.

3. To continue the preparation of the case for the Constitutional Court’s hearing, 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; Official Gazette Valstybės žinios, 2003, No. 15-600) is not in conflict with Articles 18, 23, 29, 32, 46 and 48 of the Constitution 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