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On the removal of privatisation objects from the list of privatisation objects

Case No. 13/05

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

RULING

ON THE COMPLIANCE OF PARAGRAPH 12 (WORDING OF 5 MARCH 2002) OF ARTICLE 10 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE PRIVATISATION OF STATE-OWNED AND MUNICIPAL PROPERTY, AND THAT OF THE PROCEDURE FOR THE PREPARATION OF PRIVATISATION OBJECTS FOR PRIVATISATION (WORDING OF 10 AUGUST 2002) AS APPROVED BY THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 1427) “ON THE APPROVAL OF THE PROCEDURE FOR THE PREPARATION OF PRIVATISATION OBJECTS FOR PRIVATISATION” OF 18 DECEMBER 1997 (WORDING OF 10 AUGUST 2002) WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 

23 November 2007

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 member Petras Gražulis and the advocate Laurynas Biekša, acting as the representatives of a group of members the Seimas of the Republic of Lithuania, the petitioner

Saulius Švedas, senior advisor of the Law Department of the Office of the Seimas, acting as the representative of the Seimas of the Republic of Lithuania, the party concerned

Neringa Pažūsienė, Director of the Law and Public Procurement Department of the Ministry of Economy of the Republic of Lithuania, and Vydmantas Grigoravičius, Deputy Head of the Law Department of the state enterprise State Property Fund, acting as the representatives of the Government 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, at its public hearing, on 22 November 2007, considered Case No. 13/05 subsequent to the petition (No. 1B-18) of a group of members of the Seimas, composed of Petras Gražulis, Julius Veselka, Egidijus Klumbys, Ona Valiukevičiūtė, Marija Pavilionienė, Vytautas Galvonas, Aldona Balsienė, Valentinas Mazuronis, Henrikas Žukauskas, Bronius Pauža, Vytautas Kamblevičius, Rimvydas Turčinskas, Virginijus Domarkas, Gintautas Mikolaitis, Kęstutis Daukšys, Laima Mogenienė, Rima Baškienė, Jonas Ramonas, Kazys Bobelis, Valdemaras Tomaševskis, Leokadija Počikovska, Vilma Martinkaitienė, Romualda Kšanienė, Algirdas Vrubliauskas, Liudvikas Sabutis, Povilas Jakučionis, Kazys Starkevičius, Edmundas Pupinis, Rytas Kupčinskas, Audronė Pitrėnienė, Romas Venclovas, Vida Čigriejienė, Irena Degutienė, Remigijus Ačas, Rimantas Dagys, Arimantas Dumčius, Vilija Aleknaitė Abramikienė, Julius Dautartas, and Andrius Baranauskas, the petitioner, requesting an investigation into whether Paragraph 2 of Article 1 of the Republic of Lithuania’s Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property, and Item 2 of the Resolution of the Government of the Republic of Lithuania (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 10 August 2002, both to the extent that it is prescribed that a privatisation object may be removed from the list of privatisation objects if it is required for satisfying the necessities of society, is not in conflict with Articles 5, 46, and 124 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

I

A group of members of the Seimas, the petitioner, applied to the Constitutional Court with a petition requesting an investigation into whether Paragraph 2 of Article 1 of the Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property, and Item 2 of the Resolution of the Government of the Republic of Lithuania (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 10 August 2002, both to the extent that it is prescribed that a privatisation object may be removed from the list of privatisation objects if it is required for satisfying the necessities of society, are not in conflict with Articles 5, 46, and 124 of the Constitution.

II

The petition of a group of members of the Seimas, the petitioner, is grounded on the fact that, under Article 5 of the Constitution, the state institutions serve the people, while under Article 46 of the Constitution, the state shall regulate economic activity so that it serves the general welfare of the Nation; therefore, state and municipal institutions are bound by the constitutional imperative of the interest of society and the welfare of the Nation; however, under Paragraph 12 (wording of 5 March 2002, set forth in Paragraph 2 of Article 1 of the Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property) of Article 10 of the Republic of Lithuania’s Law on the Privatisation of State-owned and Municipal Property and Item 35 (wording of 10 August 2002, set forth in Item 2 of the Resolution of the Government of the Republic of Lithuania (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997 of 10 August 2002) of the Procedure for the Preparation of Privatisation Objects for Privatisation as approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997, in privatisation of state (municipal) property the consideration to the interest of society and the welfare of the Nation only “may” be given and not “has” to be given, therefore, the constitutional obligation of the state to serve people and the general welfare of the Nation may be ignored. Furthermore, in the opinion of the petitioner, since the impugned legal regulation allows ignoring the necessities of society, also, since the cases arising from privatisation relations are assigned to the consideration by courts of general jurisdiction but not by administrative courts (which, in the opinion of the petitioner, cannot defend interests of society from state and municipal institutions), it becomes impossible to apply to court regarding respective decisions on privatisation; therefore, the impugned legal regulation is in conflict with Article 124 of the Constitution whereby acts or actions of municipal councils as well as of their executive bodies and officials, which violate the rights of citizens and organisations, may be appealed in court.

III

In the course of the preparation for the Constitutional Court’s hearing, written explanations of the representatives of the Seimas, the party concerned, who were Seimas member B. Vėsaitė and S. Švedas, as well as of the representatives of the Government, the party concerned, who were N. Pažūsienė, and V. Grigoravičius, were received wherein it is stated that the impugned legal regulation is not in conflict with Articles 5, 46, and 124 of the Constitution.

1. The position of the representatives of the Seimas, the party concerned, is grounded on the fact that, according to them, the legislature, by means of the impugned legal regulation implemented the provisions of Articles 5, 46 of the Constitution; after all, the legislature, while heeding the Constitution and taking into account various factors, may establish the legal regime (conditions and procedure of usage) of the property transferred to the ownership of other subjects, so that the interests of society and the welfare of the Nation were further secured, and the values consolidated in the Constitution were implemented. If the law prescribed that the privatisation object required for the necessities of society “has” to be removed and not “may” be removed from the list of privatisation objects, it would unreasonably restrict the possibilities of state (municipal) institutions, while disposing of state (municipal) property, to make decisions resulting in the greatest benefit for the society. Furthermore, the impugned legal regulation does not prevent persons from appealing to court and lodging complaints against the actions of municipal institutions, which violate the rights of citizens and organisations, since under Paragraph 3 of Article 10 of the Law on the Privatisation of State-owned and Municipal Property, the municipal council makes a decision regarding the inclusion into the list of privatisation objects of shares or other municipal property under the ownership of the municipality, while under Paragraph 3 of Article 41 of the Republic of Lithuania’s Law on Local Self-Government, acts or actions of municipalities and state servants which violate the rights of residents, institutions, establishments and organisations may be appealed against in the manner prescribed by the Republic of Lithuania’s Law on the Proceedings of Administrative Cases.

2. The position of the representative of the Government, the party concerned, who was N. Pažūsienė, is grounded on the fact that if the Law on the Privatisation of State-owned and Municipal Property consolidated the obligation rather than the right to remove a privatisation object required for the satisfaction of necessities of society from the list of privatisation objects, it would restrict the right of the state and municipalities to dispose of the property under their ownership thereof and would interfere with the execution of their functions. After all, the necessities of society and the general welfare of the Nation are not to be regarded as absolute; while considering the issue of removal of an object from the list of privatisation objects, one must make a comprehensive assessment of the necessities of society (in economic, social, legal and other aspects), as well as that one must take into account whether a specific necessity is really significant and reasonable and whether it may be satisfied in another way. Furthermore, the need of society may also be satisfied by way of privatisation of state or municipal property; sometimes it is more expedient to transfer such property to private subjects and stipulate that it should be used for the satisfaction of necessities of society. It has also been held that the impugned legal regulation does not prevent lodging complaints against respective actions of state and municipal institutions, since each person concerned is entitled to apply to court under the procedure stipulated by law so that the violated or disputed right or legitimate interest would be defended.

3. The position of the representative of the Government, the party concerned, who was V. Grigoravičius, is grounded on the fact that the privatisation of property under the ownership of the state (a municipality) is one of the ways established in the legal acts to implement the public interest (needs of society), and this interest should be heeded in making a decision both regarding privatisation of the property under the ownership of the state (a municipality) and regarding the removal of a privatisation object from the list of privatisation objects. The content of the general welfare of the Nation in each specific case is disclosed by taking into account economic, social and other important criteria, therefore, an assessment is unavoidable and necessary for the purpose of a fair and legitimate establishment, in which manner the public interest will be optimally implemented while the public property will serve for the welfare of the Nation in the best way. In the opinion of the representative of the Government, the party concerned, laws ensure the defence of violated and disputed rights and of the public interest in court.

IV

In the course of the preparation of the case for the hearing of the Constitutional Court written explanations were received from Z. Balčytis, the Minister of Finance of the Republic of Lithuania, P. Koverovas, State Secretary of the Ministry of Justice of the Republic of Lithuania, V. Kvietkauskas, Director of the Lithuanian Association of Municipalities, R. Šimašius, Vice-president of the Lithuanian Free Market Institute, P. Milašauskas, Director General of the state enterprise State Property Fund.

V

1. At the hearing of the Constitutional Court, the representative of a group of members of the Seimas, the party concerned, who was P. Gražulis, virtually repeated the arguments set forth in his written explanations and also presented additional explanations. The Advocate L. Biekša also presented the arguments which, in his opinion, substantiated the petition of a group of members of the Seimas.

2. At the hearing of the Constitutional Court, the representative of the Seimas, the party concerned, who was S. Švedas, virtually repeated the arguments set forth in his written explanations.

3. At the hearing of the Constitutional Court, the representatives of the Government, the party concerned, who were N. Pažūsienė and V. Grigoravičius, virtually repeated the arguments set forth in their written explanations and also presented additional explanations.

The Constitutional Court

holds that:

I

On the compliance of Paragraph 2 of Article 1 of the Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property with Articles 5, 46, and 124 of the Constitution.

1. On 5 March 2002, the Seimas adopted the Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property, which took effect on 27 March 2002. Paragraph 2 of Article 1 of this law amended Paragraph 12 (wording of 4 November 1997) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property and set it forth in its new wording. Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property established the following:

A privatisation object may be removed from the list of privatisation objects approved by the Government, and the implementation of its privatisation programme may be suspended and/or declared completed if bankruptcy proceedings are instituted against the enterprise in the manner laid down in the Enterprise Bankruptcy Law, or the enterprise is put into liquidation according to the procedure prescribed by the Company Law, or the privatisation object has not survived a natural disaster or similar disaster, or its physical properties have changed by more than 1/3, when this object is used to compensate to the citizens for the existing real property redeemed by the state in accordance with the Law on the Amount of Compensations for Real Property Redeemed by the State, their Sources, Term of Payment and Procedure and Guarantees and Concessions provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, and also if the object privatisation programme has already been announced at least once in the manner established by this Law but the object has not been sold within the time period set in the object privatisation programme. A privatisation object may also be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society.”

2. Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was amended and set forth in its new wording by Paragraph 4 of Article 4 of the Republic of Lithuania’s Law on the Amendment and Supplement of Articles 4, 7, 9, 10, 11, 13, 16, 17, 19, 20, 21, and 22 of the Law on the Privatisation of State-owned and Municipal Property adopted by the Seimas on 5 December 2006 that took effect on 1 March 2007.

3. A group of members of the Seimas, the petitioner, requests an investigation into whether Paragraph 2 of Article 1 of the Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property to the extent that it is prescribed that a privatisation object may be removed from the list of privatisation objects if it is required for satisfying the necessities of society, is not in conflict with Articles 5, 46, and 124 of the Constitution.

4. It is obvious from the petition of a group of members of the Seimas, the petitioner, that it has doubted whether the said legal regulation is not in conflict with not entire Article 5 of the Constitution, but only with Paragraph 3 thereof, which prescribes that state institutions shall serve the people, and with not with entire Article 46 of the Constitution, but only with Paragraph 3 thereof, which prescribes that the state shall regulate economic activities so that it serves the general welfare of the Nation.

5. Therefore, the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether Paragraph 2 of Article 1 of the Law on the Amendment and Supplement of Articles 10, 11, 17, and 19 of the Law on the Privatisation of State-owned and Municipal Property to the extent that it is prescribed that a privatisation object may be removed from the list of privatisation objects if it is required for satisfying the necessities of society, was not in conflict with Articles 5, 46, and 124 of the Constitution, should be treated as a petition requesting an investigation into whether the provision “A privatisation object may <…> be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society” of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was not in conflict with Paragraph 3 of Article 5, Paragraph 3 of Article 46, Article 124 of the Constitution.

It should be noted that this provision is also available in Paragraph 12 (wording of 5 December 2006) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property.

6. The impugned provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property has a formulation “required for satisfying the necessities of the state, a municipality or the society”. The notion “needs of society” (meaning the same as the notion “necessities of society”) were more than once construed in the jurisprudence of the Constitutional Court predominantly in the context of the institutes of expropriation (eminent domain) and restitution, by relating it with Paragraph 3 of Article 23 of the Constitution (where this notion is used). Some provisions of the official constitutional doctrine of the needs of society should also be applicable mutatis mutandis to privatisation relations. Needs of society are interests of the entire society or a part thereof, which the state, while discharging its functions, is constitutionally obligated to secure and satisfy (the Constitutional Court’s rulings of 2 April 2001, 10 May 2002, 19 September 2002, and 4 March 2003), therefore, they are state necessities at the same time (the Constitutional Court’s ruling of 4 March 2003). In addition, the notion “state necessities”, depending on the context, may be construed not only in its broad sense, which is the ensuring of the proper discharging of all functions of the state as the organisation of the entire society, but also in its narrow sense, which is necessities to ensure the activities of state institutions (state apparatus), however, the construction of the content of this notion must be based on the provision that the state (its institutions) must act in the interests of society, therefore, the ensuring of the conditions of activities of state institutions in discharging their functions in the interests of society is also a need of society, therefore, it is impossible to construe the notion “state necessities”, even while understanding it in its narrow meaning, as being inconsistent, in itself, with the notion “needs of society” (the Constitutional Court’s ruling of 4 March 2003). The notions “needs (necessities) of the state” and “needs (necessities) of society” may not be opposed, since they supplement rather than negate each other. Equally, these notions may not be opposed with the notion “municipal needs (necessities)”, since the needs of a municipality are the needs of local residents.

By the way, acts of the Constitutional Court have used the formulations “necessities of society and the state” more than once (the Constitutional Court’s rulings of 9 October 1998 and 14 January 2002, its decision of 13 November 2007), “needs of society and the state” (the Constitutional Court’s rulings of 14 January 2002, 11 July 2002, and 7 June 2007), “public needs of society and of the state” (the Constitutional Court’s rulings of 10 July 1997 and 17 November 2003), “interest of society and of the state” (the Constitutional Court’s ruling of 14 January 2002), whereby the words “society” and “state” are not opposed, but supplement each other. The notions “the need of society” and “the public interest” also supplement each other (the Constitutional Court’s ruling of 30 September 2003); “the interest of society” should be related with “socially important objectives” (the Constitutional Court’s ruling of 4 March 2003). The notions “dealings (needs) of society” and “needs of local residents” (i.e. needs of a municipality) are also used in the acts of the Constitutional Court as supplementing, but not negating, each other (the Constitutional Court’s rulings of 22 October 1996, 18 February 1998, 13 June 2000, and 7 May 2005). All these notions, “needs (necessities) of society”, “needs (necessities) of the state”, “needs (necessities) of a municipality”, denote the public interest and should be related with the constitutional concept of the welfare of the Nation.

7. It should be noted that, as held by the Constitutional Court in the construction of the notion “needs of society” in the context of the expropriation institute, the seizure of property for the needs of society is linked in the Constitution not with who will receive the seized property but with the objectives of the seizure of property: to use the item in the interests of society, for the socially important objectives which can only be achieved by making use of the individual features of a particular item seized; it is impossible to construe the needs of society as in all cases prohibiting the seizure of property and transfer it into private ownership; the question of whether property is seized for the needs of society is not determined by what subject (the state, municipality, legal or natural person) will subsequently become the owner of this property but by the fact whether the property seized from the owner was really seized because it was necessary to satisfy the needs of society, i.e. socially important objectives, which can only be achieved by making use of the particular property seized (the Constitutional Court’s ruling of 4 March 2003).

8. The impugned provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property should be construed by taking into account not only the provisions of Articles 5, 46, and 124 of the Constitution indicated by a group of members of the Seimas, the petitioner, but also Paragraph 2 of Article 128 of the Constitution, whereby the procedure for the possession, use and disposal of state property shall be established by law.

In the construction of this paragraph, the Constitutional Court has held that the laws should establish as to which state institutions shall take decisions on the transfer of the property under the ownership of the state to the ownership of other subjects, the empowerments of these institutions to transfer the property, the conditions and procedure of transfer of the property, as well as that the transfer of the property, which belongs by right of ownership to the state, as ownership to other subjects must be based on the law (the Constitutional Court’s rulings of 30 September, 8 July 2005, 23 August 2005, and 23 May 2007). It should be noted that the provision of the official constitutional doctrine “the transfer of the property, which belongs by right of ownership to the state, as ownership to other subjects must be based on the law” may not be construed as meaning that, purportedly, all relations of transfer of the property under the ownership of the state should be regulated only by means of a law. The Government as well as other subjects of the law-making according to their competence may also regulate these relations by substatutory legal acts which are grounded on the law and which do not compete with it. It should also be noted that the constitutional provision “the procedure for the possession, use and disposal of state property shall be established by law” should be construed by taking account of Paragraph 2 of the Republic of Lithuania’s Constitutional Act “On Membership of the Republic of Lithuania in the European Union” (a constituent part of the Constitution), whereby the norms of the European Union law shall be a constituent part of the legal system of the Republic of Lithuania; where it concerns the founding Treaties of the European Union, the norms of the European Union law shall be applied directly, while in the event of collision of legal norms, they shall have supremacy over the laws and other legal acts of the Republic of Lithuania.

In the construction of Article 128 of the Constitution, the Constitutional Court has also held that the state property is not an end in itself, but that it should provide benefits to society and should be treasured, subjected to no waste, and managed rationally; laws should protect the rights of ownership of all owners, including the state as the organisation of the entire society; no such legal regulation is permissible whereby the property under the ownership of the state is possessed, used, and disposed of in such a way that the interest or needs of only one social group or individual persons were satisfied and this property did not serve the public interest, the needs of society or the welfare of the Nation; however, the requirement arising from the Constitution to treasure state property subjecting it to no waste does not mean that state property cannot be transferred to the ownership of other persons (save the exceptions arising from the Constitution itself); therefore, no such legal regulation is permissible whereby the property under the ownership of the state is transferred to the ownership of other subjects for the purpose of satisfaction of interests or needs of only one social group or individual persons if it contravenes the public interest, the needs of society and does not serve the welfare of the Nation (the Constitutional Court’s rulings of 30 September 2003, 8 July 2005, and 5 July 2007). The transfer of the property under the ownership of the state to the ownership of other subjects (including privatisation) may be constitutionally justifiable only when it may provide larger benefits to society, when the purpose of such transfer is the satisfaction of important, constitutionally grounded needs and interests of society; such transfer (both repayable and non-repayable) would be unjustifiable constitutionally if it inflicted obvious damage on society and violated the rights of other persons (the Constitutional Court’s rulings of 30 September 2003 and 8 July 2005). In addition, the legislature, while heeding the Constitution and taking into account various factors, may establish a legal regime (conditions and procedure of usage) of the property transferable to the ownership of other subjects, in order that the interests of society and the welfare of the Nation were further ensured and the values consolidated in the Constitution were implemented (the Constitutional Court’s rulings of 30 September 2003 and 8 July 2005). These official doctrinal provisions should also be applied mutatis mutandis to the transfer of the property under the ownership of the state to the ownership of other subjects (including privatisation).

9. An object of privatisation required for the satisfaction of the public interest may be entered on the list of objects of privatisation approved by the Government only if reasons are provided that the respective public interest may be better satisfied by way of privatisation of this object. This process should be public and transparent. Nevertheless, it may also happen that the fact the respective public interest is suffered due to privatisation of a certain object may only emerge already upon the entry of this object on the list objects for privatisation approved by the Government. The provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property impugned by a group of members of the Seimas, the petitioner, is designed precisely for such situations.

10. According to the petition of a group of members of the Seimas, the petitioner, while deciding whether the impugned provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was not in conflict with Paragraph 3 of Article 5 and Paragraph 3 of Article 46 of the Constitution, it should be noted that the said provision also means that a privatisation object required for the satisfaction of public interest not only may, but also has to be removed from the list of objects for privatisation approved by the Government if it transpires that the respective public interest would suffer. Such object may be left not removed from the list of objects for privatisation approved by the Government, only in the event if the Government, which, pursuant to Item 1 of Article 94 of the Constitution, shall administer the affairs of the country, may substantiate that the respective public interest may be better satisfied through privatisation of this object. Respective resolutions of the Government may be adopted only upon the assessment of all circumstances of importance (economic, social circumstances, also those related with ensuring the security of society, etc.). Therefore, the impugned provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property neither directly nor indirectly presupposes any empowerments to the Government or any other state institution, as well as to municipal institutions, to keep such objects on the list of objects for privatisation, the privatisation whereof could cause damage to the public interest and to the welfare of the Nation.

Therefore, there are no legal grounds for the statement that, purportedly, the impugned provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property creates preconditions for some state institutions not to serve people and take such decisions which would not serve the general welfare of the Nation.

11. Taking account of the arguments set forth, the conclusion should be drawn that the provision “A privatisation object may <…> be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society” of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was not in conflict with Paragraph 3 of Article 5 and Paragraph 3 of Article 46 of the Constitution.

12. While deciding subsequent to the petition of a group of members of the Seimas, the petitioner, whether the impugned provision of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was not in conflict with Article 124 of the Constitution, it should be noted that, pursuant to Paragraph 1 (wording of 4 November 1997) of Article 10, and, according to other provisions, inter alia, Paragraph 12 (wording of 5 March 2002) of Article 10 of this law, the legal regulation established wherein is impugned by a group of members of the Seimas, the petitioner, the list of objects for privatisation is a document approved by the Government according to the procedure stipulated by law.

Meanwhile, Article 124 of the Constitution provides that acts or actions of municipal councils as well as of their executive bodies and officials, which violate the rights of citizens and organisations, may be appealed in court.

13. It should be noted that the Constitution also guarantees a possibility of disputing in court (including the defence of the public interest) the decisions of the Government made in administering the affairs of the country (however, by not negating the constitutional empowerments of the Government to adopt respective decisions which are within its competence).

Such a possibility is also consolidated in laws.

However, it is not allowed to substantiate such impugnment of the decisions by the Government by Article 124 of the Constitution, which is devoted to the regulation of relations of a different character, namely the relations related to appealing against acts or actions of municipal councils as well as of their executive bodies and officials in court.

In this context, it should be mentioned that, under Paragraph 2 of Article 110 of the Constitution, in cases when there are grounds to believe that the law or other legal act which should be applied in a concrete case is in conflict with the Constitution, the judge shall suspend the consideration of the case and shall apply to the Constitutional Court requesting it to decide whether the law or other legal act in question is in compliance with the Constitution. Under the Constitution (inter alia, Paragraph 1 of Article 102 thereof), an investigation into the compliance of resolutions of the Government with the Constitution and laws is assigned to the jurisdiction of the Constitutional Court.

14. Taking account of the arguments set forth, the conclusion should be drawn that the provision “A privatisation object may <…> be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society” of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was not in conflict with Article 124 of the Constitution.

II

On the compliance of Item 2 of the Government Resolution (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 10 August 2002 with Paragraph 3 of Article 5, Paragraph 3 of Article 46, and Article 124 of the Constitution.

1. On 10 August 2002, the Government adopted the Resolution (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997”, which took effect on 15 August 2002. Item 2 of this government resolution replaced Item 35 (wording of 9 October 2000) of the Procedure for the Preparation of Privatisation Objects for Privatisation as approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 9 October 2000).

The Procedure for the Preparation of Privatisation Objects for Privatisation (wording of 10 August 2002) as approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 10 August 2002), inter alia, prescribed:

A privatisation object may be removed <...> from the list of objects for privatisation approved by the Government <...> if: <...>

35.5. this object is required for satisfying the necessities of the state, a municipality or the society.”

2. By the Government Resolution (No. 274) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 14 March 2005 which took effect on 18 March 2005, amendments were made to the Procedure for the Preparation of Privatisation Objects for Privatisation and to the name of the government resolution that approved it. Since then they have been referred to (respectively) as the Rules for Preparation of Privatisation Objects for Privatisation and the Government Resolution (No. 1427) “On the Approval of the Rules for Preparation of Privatisation Objects for Privatisation”.

By amending Item 35 (wording of 10 August 2005) of the Rules for the Preparation of Privatisation Objects for Privatisation as approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation“ of 18 December 1997 (wording of 10 August 2005) by the Government Resolution (No. 932) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Rules for Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 29 August 2007 that took effect on 14 September 2007, one did not amend the quoted provision.

3. A group of members of the Seimas, the petitioner, requests an investigation into whether Item 2 of the Government Resolution (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On The Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 10 August 2002 to the extent that it is prescribed that a privatisation object may be removed from the list of privatisation objects if it is required for satisfying the necessities of society, is not in conflict with Articles 5, 46, and 124 of the Constitution.

4. It is obvious from the petition of a group of members of the Seimas, the petitioner, that it has doubted whether the said legal regulation is not in conflict with not entire Article 5 of the Constitution, but only with Paragraph 3 thereof, and with not entire Article 46 of the Constitution, but only with Paragraph 3 thereof.

5. Therefore, the petition of a group of members of the Seimas, the petitioner, requesting an investigation into whether Item 2 of the Government Resolution (No. 1235) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 1427) ‘On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation’ of 18 December 1997” of 10 August 2002 to the extent that it is prescribed that a privatisation object may be removed from the list of privatisation objects if it is required for satisfying the necessities of society, is not in conflict with Articles 5, 46, and 124 of the Constitution should be treated as a petition requesting an investigation into whether the provision “A privatisation object may be removed from <…> the list of privatisation objects <…> approved by the Government if: <…> 35.5.5 this object is required for satisfying the necessities of the state, a municipality or the society” of the Procedure for the Preparation of Privatisation Objects for Privatisation (wording of 10 August 2002) as approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 10 August 2002) was not in conflict with Paragraph 3 of Article 5, Paragraph 3 of Article 46, and Article 124 of the Constitution.

It should be noted that such provision is also available in the Rules for Preparation of Privatisation Objects for Privatisation (wording of 29 August 2007) as approved by the Government Resolution (No. 1427) “On the Approval of the Rules for Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 29 August 2007).

6. It should be held that the provision “A privatisation object may be removed from <…> the list of privatisation objects <…> approved by the Government if: <…> 35.5.5 this object is required for satisfying the necessities of the state, a municipality or the society” of the Procedure for the Preparation of Privatisation Objects for Privatisation (wording of 10 August 2002) as approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 10 August 2002) is identical to the provision “A privatisation object may <…> be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society” of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property, therefore, the impugned legal regulation established by the Government does not compete with that established in the law.

7. Having held that the provision “A privatisation object may <…> be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society” of Paragraph 12 (wording of 5 March 2002) of Article 10 of the Law on the Privatisation of State-owned and Municipal Property was not in conflict with Paragraph 3 of Article 5, Paragraph 3 of Article 46, and Article 124 of the Constitution, it should also be held that the provision “A privatisation object may be removed from <…> the list of privatisation objects <…> approved by the Government if: <…> 35.5.5 this object is required for the satisfaction of the needs of the state, a municipality or the society” of the Procedure for the Preparation of Privatisation Objects for Privatisation (wording of 10 August 2002) approved by the Government Resolution (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 10 August 2002) was not in conflict with Paragraph 3 of Article 5, Paragraph 3 of Article 46, and Article 124 of the Constitution, either.

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

ruling:

1. To recognise that the provision “A privatisation object may <…> be removed from the list of privatisation objects if it is required for satisfying the necessities of the state, a municipality or the society” of Paragraph 12 (wording of 5 March 2002) (Official gazette Valstybės žinios, 2002, No. 31-1108) of Article 10 of the Republic of Lithuania’s Law on the Privatisation of State-owned and Municipal Property was not in conflict with the Constitution of the Republic of Lithuania.

2. To recognise that the provision “A privatisation object may be removed from <…> the list of privatisation objects <…> approved by the Government if: <…> 35.5.5 this object is required for satisfying the necessities of the state, a municipality or the society” of the Procedure for the Preparation of Privatisation Objects for Privatisation (wording of 10 August 2002) (Official gazette Valstybės žinios, 2002, No. 80-3420) adopted by the Resolution of the Government of the Republic of Lithuania (No. 1427) “On the Approval of the Procedure for the Preparation of Privatisation Objects for Privatisation” of 18 December 1997 (wording of 10 August 2002) was not in conflict with the Constitution of the Republic of Lithuania.

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

The ruling is 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