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On accepting a petition of the petitioner

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

DECISION

ON THE ACCEPTANCE OF THE PETITION OF THE SEIMAS OF THE REPUBLIC OF LITHUANIA, THE PETITIONER, SET FORTH IN the SEIMAS RESOLUTION (NO. X-1729) “ON APPLYING TO THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA WITH THE PETITION REQUESTING AN INVESTIGATION INTO WHETHER THE REPUBLIC OF LITHUANIA’S LAW ON AMENDING AND SUPPLEMENTING ARTICLES 8, 10, 11, AND 20 OF THE LAW ON THE NUCLEAR POWER PLANT IS NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA” REQUESTING AN INVESTIGATION INTO WHETHER THE PROVISIONS OF ARTICLES 10 AND 11 (WORDING OF 1 FEBRUARY 2008) OF THE REPUBLIC OF LITHUANIA’S LAW ON THE NUCLEAR POWER PLANT ARE NOT IN CONFLICT WITH THE CONSTITUTION

8 October 2008
Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Toma Birmontienė, Pranas Kuconis, Kęstutis Lapinskas, Zenonas Namavičius, Egidijus Šileikis, Algirdas Taminskas, and Romualdas Kęstutis Urbaitis

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, at its procedural sitting, considered the petition of the Seimas of the Republic of Lithuania, the petitioner, set forth in the Seimas Resolution (No. X-1729) “On Applying to the Constitutional Court of the Republic of Lithuania with the Petition Requesting an Investigation into Whether the Republic of Lithuania’s Law on Amending and Supplementing Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant Is Not in Conflict with the Constitution of the Republic of Lithuania” of 22 September 2008 requesting an investigation into:

1) whether Paragraph 1 (Official Gazette Valstybės žinios, 2008, No. 19-674) of Article 2 of the Republic of Lithuania’s Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, which amends Paragraph 1 of Article 10 of the Law on the Nuclear Power Plant and provides that “the national investor shall be an independent private legal subject registered in the Republic of Lithuania, established for an indefinite period of time and operating under the laws of the Republic of Lithuania, the aim of whose activity shall be gaining benefits for itself and all its shareholders in a socially responsible manner” is not in conflict with Paragraph 5 of Article 46 of the Constitution of the Republic of Lithuania;

2) whether Paragraph 1 of Article 2 of the Republic of Lithuania’s Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, which amends Paragraph 1 of Article 10 of the Law on the Nuclear Power Plant and provides that “the national investor shall be the national power company managing through its subsidiaries the main part of the Lithuanian power system—the electricity transmission and distribution networks. Seeking to attain the goal of its activity, the national investor shall participate, on the basis of private initiative, in implementing in Lithuania the project of construction of a new nuclear power plant, as well as constructing, according to the procedure established by the Law on Electricity and other legal acts, the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden” is not in conflict with Paragraphs 3 and 4 of Article 46 of the Constitution of the Republic of Lithuania;

3) whether Item 1 of Paragraph 1 of Article 11 of the Law on the Nuclear Power Plant, which is set forth in Article 3 of the Republic of Lithuania’s Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, and which provides that “the Government of the Republic of Lithuania implementing the provisions of Article 10 of this Law shall have the right to negotiate with the shareholder of the controlling stake in the public limited liability company VST on the establishment of the national investor and on the investment of all the shares owned by that shareholder in the public limited liability company VST, or part thereof amounting to more than 2/3 of the shares of the public limited liability company VST carrying more than 2/3 of votes at the general shareholders’ meeting, as well as on the acquisition of newly issued shares of the national investor”, is not in conflict with Article 29 and Paragraph 4 of Article 46 of the Constitution of the Republic of Lithuania.

The Constitutional Court

has established:

1. On 28 June 2007, a group of the Seimas of the Republic of Lithuania, the petitioner, adopted the Republic of Lithuania’s Law on the Nuclear Power Plant, which came into force on 10 July 2007. This law was amended by the Republic of Lithuania’s Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, which came into force on 14 February 2008.

1.1. By Paragraph 1 of Article 2 of the Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, Paragraph 1 of Article 10 the Law on the Nuclear Power Plant (wording of 28 June 2007) was amended and it was set forth as follows:

The national investor shall be an independent private legal subject registered in the Republic of Lithuania, established for an indefinite period of time and operating under the laws of the Republic of Lithuania, the aim of whose activity shall be gaining benefits for itself and all its shareholders in a socially responsible manner and taking part in implementing the strategic goal of Lithuania provided for in paragraph 3 of Article 8 of this Law. The legal form of the national investor shall be a public limited liability company; the registered office of the national investor shall be located in the Republic of Lithuania. The national investor shall be the national power company managing through its subsidiaries the main part of the Lithuanian power system—the electricity transmission and distribution networks. Seeking to attain the goal of its activity, the national investor shall participate, on the basis of private initiative, in implementing in Lithuania the project of construction of a new nuclear power plant, as well as constructing, according to the procedure established by the Law on Electricity and other legal acts, the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden.”

1.2. By Article 3 of the Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, Article 11 the Law on the Nuclear Power Plant (wording of 28 June 2007) was amended and it was set forth as follows:

The Government of the Republic of Lithuania implementing the provisions of Article 10 of this Law shall have the right to:

1) negotiate with the shareholder of the controlling stake in the public limited liability company VST on the establishment of the national investor and on the investment of all the shares owned by that shareholder in the public limited liability company VST, or part thereof amounting to more than 2/3 of the shares of the public limited liability company VST carrying more than 2/3 of votes at the general shareholders’ meeting, as well as on the acquisition of newly issued shares of the national investor; <…>.”

2. On 22 September 2008, the Seimas, the petitioner, adopted the Resolution (No. X-1729) “On Applying to the Constitutional Court of the Republic of Lithuania with the Petition Requesting an Investigation into Whether the Republic of Lithuania’s Law on Amending and Supplementing Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant Is Not in Conflict with the Constitution of the Republic of Lithuania” whereby it requested that the Constitutional Court investigate:

1) whether Paragraph 1 (Official Gazette Valstybės žinios, 2008, No. 19-674) of Article 2 of the Republic of Lithuania’s Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, which amends Paragraph 1 of Article 10 of the Law on the Nuclear Power Plant and provides for the sole aim of the activity of the national investor and which stipulates that ‘the national investor shall be an independent private legal subject registered in the Republic of Lithuania, established for an indefinite period of time and operating under the laws of the Republic of Lithuania, the aim of whose activity shall be gaining benefits for itself and all its shareholders in a socially responsible manner’, and which does not entrench the protection of the rights of consumers, is not in conflict with Paragraph 5 of Article 46 of the Constitution of the Republic of Lithuania which provides that ‘the State shall defend the interests of the consumer’. It needs to be noted that the subchapter titled “Economic Policy” of Chapter 4 of Part I of the Appendix to the Republic of Lithuania’s Law on the Basics of National Security names the energy sector as a sector which is of strategic importance to national security, therefore, the securing of production, distribution and supply of electricity in a manner which does not violate the rights of the consumers, is of special significance to the Lithuanian economy and residents—consumers of electricity;

2) whether the fact that the Republic of Lithuania’s Law on the Nuclear Power Plant provides for establishment of the national investor which, as an owner, would concentrate in its hands the main portion of production of electricity, its transmission, distribution, export and import, and Paragraph 1 of Article 2 of the Republic of Lithuania’s Law on Amending and Supplementing Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, which amends Paragraph 1 of Article 10 of the said law, and which provides that ‘the national investor shall be the national power company managing through its subsidiaries the main part of the Lithuanian power system—the electricity transmission and distribution networks. Seeking to attain the goal of its activity, the national investor shall participate, on the basis of private initiative, in implementing in Lithuania the project of construction of a new nuclear power plant, as well as constructing, according to the procedure established by the Law on Electricity and other legal acts, the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden’, is not in conflict with Paragraph 3 of Article 46 of the Constitution of the Republic of Lithuania, which provides: ‘The State shall regulate economic activity so that it serves the general welfare of the Nation’, and Paragraph 4 of the same article, which provides: ‘The law shall prohibit monopolisation of production and the market and shall protect freedom of fair competition.’ It needs to be noted that the subchapter titled “Economic Policy” of Chapter 4 of Part I of the Appendix to the Republic of Lithuania’s Law on the Basics of National Security emphasises that a single investor shall be prohibited from dominating in an economic sector of strategic importance to national security;

It also needs to be noted that the Seimas of the Republic of Lithuania has ratified the Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, Item a of Paragraph 1 of Article 176a whereof provides: ‘1. In the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment, Union policy on energy shall aim, in a spirit of solidarity between Member States, to:

(a) ensure the functioning of the energy market;’;

3) whether Item 1 of Paragraph 1 of Article 11 of the Law on the Nuclear Power Plant, which is set forth in Article 3 of the Republic of Lithuania’s Law on Amending Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant, which provides that ‘the Government of the Republic of Lithuania implementing the provisions of Article 10 of this Law shall have the right to negotiate with the shareholder of the controlling stake in the public limited liability company VST on the establishment of the national investor and on the investment of all the shares owned by that shareholder in the public limited liability company VST, or part thereof amounting to more than 2/3 of the shares of the public limited liability company VST carrying more than 2/3 of votes at the general shareholders’ meeting, as well as on the acquisition of newly issued shares of the national investor’, is not in conflict with the provision of Paragraph 4 of Article 46 of the Constitution of the Republic of Lithuania, which stipulates: ‘The law shall prohibit monopolisation of production and the market and shall protect freedom of fair competition’, and with the principle of equality of rights entrenched in Article 29 of the Constitution of the Republic of Lithuania, since in the course of establishment of the national investor the state chose, without competition and application of the legal norms regulating fair competition, the only partner, the public limited liability company VST, i.e. the state chose this partner not on the grounds of the Law, and established exclusive rights of the shareholder of this company, i.e. the Law entrenched different legal regulation of economic subjects. Under the Constitution, the state, while regulating economic activity, must pay heed to the constitutional requirement of equality of rights of economic subjects, which is directly related to the principle of equal rights of all persons, which is entrenched in Article 29 of the Constitution. Otherwise, the legal regulation of economic activity would not be regarded as one serving the general welfare of the Nation (the Constitutional Court’s ruling of 13 May 2005).”

3. This petition of the Seimas, the petitioner, was officially published in the official gazette “Valstybės žinios” on 1 October 2008 (Official Gazette Valstybės žinios, 2008, No. 113-4291); at the Constitutional Court it was registered on 6 October 2008.

The Constitutional Court

holds that:

1. Under Paragraph 1 of Article 102 and Paragraph 1 of Article 105 of the Constitution, the investigation of the compliance of laws and other acts adopted by the Seimas with the Constitution is assigned to the jurisdiction of the Constitutional Court.

2. Under Paragraph 1 of Article 106 of the Constitution, the Government, not less than 1/5 of all the Members of the Seimas, and the courts, shall have the right to apply to the Constitutional Court concerning the acts specified in Paragraph 1 of Article 105, i.e. concerning laws and other acts adopted by the Seimas. Under Paragraph 4 of the same article, the resolution of the Seimas asking for an investigation into the conformity of an act with the Constitution shall suspend the validity of the act.

While construing these provisions in a systemic manner, it should be held that the Seimas in corpore has the constitutional empowerments to apply to the Constitutional Court by means of a resolution and to request that the compliance of a law with the Constitution be investigated.

3. Under Paragraph 1 of Article 26 (wording of 28 October 2003) of the Law on the Constitutional Court of the Republic of Lithuania, in cases when the Constitutional Court receives a resolution of the Seimas wherein it is requested to investigate whether a law is in compliance with the Constitution, the preliminary investigation of that material must be carried out within 3 days, and the issue of whether to accept the petition for consideration in the Constitutional Court must be settled during its organisational sitting.

The corresponding decision of the Constitutional Court neither approves of nor denies the arguments on which the Seimas, the petitioner, grounds its position; when adopting such decisions, the fact of essential significance is whether the petition of the petitioner is grounded on legal reasoning (the Constitutional Court’s decisions of 15 December 2006 and 8 January 2008).

4. It needs to be held that, in general, the petition set forth in the Seimas Resolution (No. X-1729) “On Applying to the Constitutional Court of the Republic of Lithuania with the Petition Requesting an Investigation into Whether the Republic of Lithuania’s Law on Amending and Supplementing Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant Is Not in Conflict with the Constitution of the Republic of Lithuania” of 22 September 2008 is grounded on legal reasoning. Although there are deficient arguments in this petition (for example, reference is made to the Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing the European Community, which has not become effective yet; the doubts regarding the compliance of the impugned law with the Constitution are grounded, inter alia, on provisions of other laws, thus disregarding the doctrinal provisions formulated by the Constitutional Court whereby the Constitutional Court, under the Constitution, does not decide the issues of compatibility or competition between legal acts of the same legal force), the petition can be accepted for consideration at the Constitutional Court.

5. Thus, the Seimas, the petitioner, requests an investigation into whether:

Paragraph 1 (wording of 1 February 2008) of Article 10 of the Law on the Nuclear Power Plant, which provides for only one aim of the activity of the national investor—“the national investor shall be an independent private legal subject registered in the Republic of Lithuania, established for an indefinite period of time and operating under the laws of the Republic of Lithuania, the aim of whose activity shall be gaining benefits for itself and all its shareholders in a socially responsible manner”—and which does not entrench the protection of the rights of consumers, is not in conflict with Paragraph 5 of Article 46 of the Constitution;

the provision “the national investor shall be the national power company managing through its subsidiaries the main part of the Lithuanian power system—the electricity transmission and distribution networks. Seeking to attain the goal of its activity, the national investor shall participate, on the basis of private initiative, in implementing in Lithuania the project of construction of a new nuclear power plant, as well as constructing, according to the procedure established by the Law on Electricity and other legal acts, the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden” of Paragraph 1 (wording of 1 February 2008) of Article 10 of the Law on the Nuclear Power Plant, according to which it is provided to create the national investor which, as an owner, will concentrate in its hands the main portion of production of electricity, its transmission, distribution, export and import, is not in conflict with Paragraphs 3 and 4 of Article 46 of the Constitution;

Item 1 of Paragraph 1 of Article 11 (wording of 1 February 2008) of the Law on the Nuclear Power Plant which provides that “the Government of the Republic of Lithuania implementing the provisions of Article 10 of this Law shall have the right to negotiate with the shareholder of the controlling stake in the public limited liability company VST on the establishment of the national investor and on the investment of all the shares owned by that shareholder in the public limited liability company VST, or part thereof amounting to more than 2/3 of the shares of the public limited liability company VST carrying more than 2/3 of votes at the general shareholders’ meeting, as well as on the acquisition of newly issued shares of the national investor”, is not in conflict with Paragraph 1 of Article 29 and Paragraph 4 of Article 46 of the Constitution.

6. As mentioned before, under Paragraph 4 of Article 106 of the Constitution, the resolution of the Seimas asking for an investigation into the conformity of an act with the Constitution shall suspend the validity of the act. Under Paragraph 1 of Article 107 of the Constitution, a law (or part thereof) of the Republic of Lithuania may not be applied from the day of the official publication of the decision of the Constitutional Court that the act in question (or part thereof) is in conflict with the Constitution. While construing these provisions in a systemic manner, it should be held that a decision of the Constitutional Court to accept the petition set forth in a Seimas resolution requesting an investigation into whether a law (or part thereof) is in conformity with the Constitution, suspends the validity of this law (or part thereof).

Under Paragraph 2 of Article 26 (wording of 28 October 2003) of the Law on the Constitutional Court, if the Constitutional Court adopts a decision to accept a petition for consideration, the President of the Constitutional Court shall immediately give an official announcement about it in the official gazette “Valstybės žinios” (“The News of the State”) as well as on the Internet website of the Constitutional Court; in this announcement, the President of the Constitutional Court must state the exact title of the impugned act, the date of its adoption, and that, in accordance with Article 106 of the Constitution of the Republic of Lithuania, the validity of the aforementioned act (part thereof) is suspended from the day of such official announcement until the ruling of the Constitution Court concerning this case is published.

Under Paragraph 3 of Article 26 (wording of 28 October 2003) of the Law on the Constitutional Court, in cases when the Constitutional Court, having considered a case, adopts a ruling that the impugned act is not in conflict with the Constitution, the President of the Constitutional Court shall immediately make an official announcement about it under procedure established in the Paragraph 2 of this article; in this announcement, the President of the Constitutional Court shall state the exact title of the impugned act, the date of its adoption, the essence of the ruling of the Constitutional Court concerning this issue, the date of its adoption, and that the validity of the suspended act shall be restored from the day that this ruling is published.

7. It needs to be noted that the impugned provisions of Paragraph 1 (wording of 1 February 2008) of Article 10 and Item 1 of Paragraph 1 of Article 11 (wording of 1 February 2008) of the Law on the Nuclear Power Plant have already given rise to legal effects.

The Constitutional Court has held that the fact that the Constitutional Court accepts the petition of the Seimas, the petitioner, and the suspension of the validity of a corresponding legal act, neither quash nor change the said legal effects which have occurred (the Constitutional Court’s decision of 8 January 2008).

Conforming to Paragraph 1 of Article 105 of the Constitution of the Republic of Lithuania and Articles 26, 28, and 63 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

To accept the petition set forth in the Resolution of the Seimas of the Republic of Lithuania (No. X-1729) “On Applying to the Constitutional Court of the Republic of Lithuania with the Petition Requesting an Investigation into Whether the Republic of Lithuania’s Law on Amending and Supplementing Articles 8, 10, 11, and 20 of the Law on the Nuclear Power Plant Is Not in Conflict with the Constitution of the Republic of Lithuania” of 22 September 2008 requesting an investigation into:

whether Paragraph 1 (wording of 1 February 2008) of Article 10 of the Republic of Lithuania’s Law on the Nuclear Power Plant, which provides for only one aim of the activity of the national investor—“the national investor shall be an independent private legal subject registered in the Republic of Lithuania, established for an indefinite period of time and operating under the laws of the Republic of Lithuania, the aim of whose activity shall be gaining benefits for itself and all its shareholders in a socially responsible manner”—and which does not entrench the protection of the rights of consumers, is not in conflict with Paragraph 5 of Article 46 of the Constitution of the Republic of Lithuania;

whether the provision “the national investor shall be the national power company managing through its subsidiaries the main part of the Lithuanian power system—the electricity transmission and distribution networks. Seeking to attain the goal of its activity, the national investor shall participate, on the basis of private initiative, in implementing in Lithuania the project of construction of a new nuclear power plant, as well as constructing, according to the procedure established by the Law on Electricity and other legal acts, the interconnections of the power system of the Republic of Lithuania with the power systems of the Republic of Poland and the Kingdom of Sweden” of Paragraph 1 (wording of 1 February 2008) of Article 10 of the Republic of Lithuania’s Law on the Nuclear Power Plant, according to which it is provided to create the national investor which, as an owner, will concentrate in its hands the main portion of production of electricity, its transmission, distribution, export and import, is not in conflict with Paragraphs 3 and 4 of Article 46 of the Constitution of the Republic of Lithuania;

whether Item 1 of Paragraph 1 of Article 11 (wording of 1 February 2008) of the Republic of Lithuania’s Law on the Nuclear Power Plant which provides that “the Government of the Republic of Lithuania implementing the provisions of Article 10 of this Law shall have the right to negotiate with the shareholder of the controlling stake in the public limited liability company VST on the establishment of the national investor and on the investment of all the shares owned by that shareholder in the public limited liability company VST, or part thereof amounting to more than 2/3 of the shares of the public limited liability company VST carrying more than 2/3 of votes at the general shareholders’ meeting, as well as on the acquisition of newly issued shares of the national investor”, is not in conflict with Paragraph 1 of Article 29 and Paragraph 4 of Article 46 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
                                                                      Pranas Kuconis
                                                                      Kęstutis Lapinskas
                                                                      Zenonas Namavičius
                                                                      Egidijus Šileikis
                                                                      Algirdas Taminskas
                                                                      Romualdas Kęstutis Urbaitis