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On the establishment of the value of urban land to be purchased by the state in the course of the restoration of the rights of ownership

Case No. 6/2010

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

IN THE NAME OF THE REPUBLIC OF LITHUANIA

 RULING

ON THE COMPLIANCE OF THE PROVISION OF ITEM 4 (WORDING OF 21 OCTOBER 2002) OF THE METHODOLOGY FOR ESTABLISHING THE VALUE AND EQUIVALENCE OF LAND, FORESTS, AND WATER BODIES TO BE PURCHASED BY THE STATE, AS APPROVED BY THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 205) “ON THE PROCEDURE FOR THE VALUATION OF LAND” OF 24 FEBRUARY 1999 (WORDING OF 21 OCTOBER 2002), WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA AND PARAGRAPH 2 OF ARTICLE 16 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE RESTORATION OF THE RIGHTS OF OWNERSHIP OF CITIZENS TO THE EXISTING REAL PROPERTY (WORDING 1 JULY 1997)

 11 September 2013

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Egidijus Bieliūnas, Toma Birmontienė, Pranas Kuconis, Gediminas Mesonis, Ramutė Ruškytė, Egidijus Šileikis, Algirdas Taminskas, Romualdas Kęstutis Urbaitis, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

Audrius Petkevičius, the Director of the Department of Land and Resources Policy of the Ministry of Agriculture of the Republic of Lithuania, and Gintarė Tumalavičienė, the Head of the Land Law Division of the same department, 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, on 26 August 2013, at the Court’s public hearing, heard constitutional justice case No. 6/2010 subsequent to the petition (No. 1B-5/2010) of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether the amount of the value of land as assessed at 6,000 litas per hectare in Item 4.2 of the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies to Be Purchased by the State, which was approved by Item 3 of the Resolution of the Government of the Republic of Lithuania (No. 205) “On the Procedure for the Valuation of Land” of 24 February 1999 (wording of 21 October 2002), is not in conflict with Paragraph 3 of Article 23 of the Constitution of the Republic of Lithuania and Paragraph 2 of Article 16 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of 1 July 1997).

The Constitutional Court

has established:

I

The Vilnius Regional Administrative Court, the petitioner, was investigating the administrative case subsequent to a complaint filed by L. B., the complainant, against the Vilnius County Governor’s Administration, the defendant, regarding the latter’s decision and the annulment of the order as well as the imposition of the obligation to carry out certain actions. In the material of the case considered by the Vilnius Regional Administrative Court, it is indicated that, on 28 February 2002, late A. B., who died on 16 May 2007 and whose property was inherited by his spouse L. B., the complainant, had filed with the Vilnius City Land Management Division of the Vilnius County Governor’s Administration a petition requesting the restoration of the rights of ownership to the property that had used to be owned by Š. B. and V. B., his grandparents, in Kalvarijų Street, in Vilnius. According to the appended scheme from the file of cadastre data, a part of the plot of land concerned in Kalvarijų Street, in Vilnius, was categorised as land to be purchased by the state, since it was built-up with the structures owned by the right of ownership. The value of that part of the plot of land in Kalvarijų Street, in Vilnius, the restoration of the rights of ownership to which had been requested by A. B., the spouse of the aforementioned complainant, and which, as indicated before, was to be purchased by the state, was calculated at 6,172.80 litas per 0.1286 hectares by the Vilnius City Land Management Division of the Land Management Department of the Vilnius County Governor’s Administration according to the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies to Be Purchased by the State (hereinafter also referred to as the Methodology), as approved by the Government Resolution (No. 205) “On the Procedure for the Valuation of Land” of 24 February 1999 (hereinafter also referred to as government resolution No. 205 of 24 February 1999). The rights of ownership to A. B., the spouse of the complainant, had also been restored to the part of the plot of land of domestic use (intended for the construction of a private house), located in the same place, by restituting it in kind. L. B., the complainant, filed with the Vilnius Regional Administrative Court the complaint contesting the amount of compensation, as determined by the decisions of the Vilnius County Governor, for the land plot of 0.1286 ha, the rights of ownership to which had been restored to A. B., by compensating him for the said plot of land in the form of securities.

By its ruling, the Vilnius Regional Administrative Court, the petitioner, suspended the consideration of the administrative case in question and applied to the Constitutional Court, requesting it to investigate whether the amount of the value of land as assessed at 6,000 litas per hectare in Item 4.2 of the Methodology, which had been approved by government resolution No. 205 of 24 February 1999 (wording of 21 October 2002), was in compliance with Paragraph 3 of Article 23 of the Constitution and Paragraph 2 of Article 16 of the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (hereinafter also referred to as the Law).

II

The petition of the Vilnius Regional Administrative Court, the petitioner, is substantiated by the following arguments.

The provision of Paragraph 3 of Article 23 of the Constitution, according to which compensation for property taken over for the needs of society must be fair, means that a person whose property is to be taken over for the needs of society has the right to demand that the said compensation would be equivalent to the property to be taken over. However, Item 4.2 of the Methodology prescribes that the value of a plot of land or forest that is to be purchased by the state (by paying in either cash or securities) is calculated by multiplying the area of such a plot by the value of land as assessed at 6,000 litas per hectare for urban land used for other purposes. In the opinion of the petitioner, the said method for calculating the value of a plot of land that is to be purchased by the state obviously violates the principle of equivalence, since, based on the data available in the case considered by the petitioner, the value of land to be purchased by the state, as calculated according to the Methodology, is several hundred times lower if compared to the average market value of such land as calculated by the state enterprise (SE) “Centre of Registers”. The concrete price of 1 hectare of land to be purchased by the state is established by taking no account of other important factors that may influence the value of a plot of such land, as, for instance, the location and adjacencies of a particular plot of land to be purchased by the state.

Paragraph 2 of Article 16 of the Law provides that, when compensating citizens for the real property that, according to this law, is not to be restituted in kind, the state follows the principle of equivalence between the property not to be restituted and the property to be transferred in compensation for the property to be purchased by the state. The said principle requires that the compensation to be granted to the person concerned be sufficient to acquire the property of an equivalent value. In the context of the relations of the restoration of the rights of ownership, the principle of fair compensation for property taken over for public needs should be construed as the principle of equivalence between the property taken over and the property given in compensation for the property taken over by the state.

III

  1. By the Ordinance of the Prime Minister (No. 132) “Concerning Representation at the Constitutional Court of the Republic of Lithuania” of 19 April 2010, Silvestras Staliūnas, the Director of the Land Management Department of the National Land Service under the Ministry of Agriculture, and Aušra Račkauskaitė, the Deputy Head of the Law Division of the same service, were appointed to act as the representatives of the Government, the party concerned. In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from S. Staliūnas and A. Račkauskaitė, in which it is maintained that the impugned provision of Item 4 of the Methodology is not in conflict with the Constitution and Paragraph 2 of Article 16 of the Law. The position of the said representatives of the party concerned is substantiated by the following arguments.

1.1. The process of the restoration of the rights of ownership is rather long and complicated, since it is necessary to reconcile the interests of the owners who owned the land prior to the land nationalisation, the interests of the persons who were granted the right to use the land after the nationalisation, and, finally, the interests of the entire society. Therefore, both the previously valid Republic of Lithuania’s Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” and the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, which replaced the former law and is currently in force, prescribed (prescribes) that the rights of ownership may be restored not only by returning land in kind, but also by other means provided for by law, i.e. in order to reconcile the interests of the former owners and society, the legislature has opted for the institute of limited restitution. It is impossible to return land in kind to all the former owners or persons who, under law, have the right to restore the rights of ownership to the land that belonged to the owner, since a considerable number of economic, social, and public changes occurred in the course of a long period of the Soviet occupation: certain structures were built, the infrastructure was created, new public needs emerged, etc. Thus, the state was obliged to regulate the restoration of the rights of ownership to the existing real property by means of legal acts in such a way that these rights of citizens would be implemented in reality.

1.2. When adopting decisions regarding the forms and amounts of compensation for land not to be restituted in kind, it was necessary to take account of the economic, financial, and material capacities of the state, as well as of the impact of such decisions on all taxpayers. For instance, according to the land mass assessment statements prepared in 2009 by the SE “Centre of Registers”, the value of land categorised as land used for other purposes in the city of Vilnius was 2.182 million litas per hectare: land located in the zone of residential territories (for multi-storey construction) was approximately assessed at 62,093 litas per are, land located in the zone of other residential territories (landholdings for domestic use (intended for the construction of a private house))—at 19,690 litas per are, land located in the zone of commercial structures—at 38,137 litas per are, and land located in the zone of industrial and warehousing structures—at 10,308 litas per are. In the city of Vilnius, the said land (categorised as land used for other purposes) would approximately be priced at 21,817 litas per are. On 1 January 2010, decisions had not been adopted yet on the restoration of the rights of ownership to the area of land covering 14,160 hectares in all towns of Lithuania collectively (with the exception of the conclusions issued to restore the rights of ownership by transferring, into ownership for no consideration, the plots of land in rural location that were of an equivalent value to the formerly owned plots of land). Based on approximate calculations, it is clear that the current market value of the said remaining unreturned urban land, which used to be private prior to the nationalisation, is 21 billion litas. Attention should be drawn to the fact that, upon a decision to compensate for urban land that used to be owned at the market value, the aforesaid sum would also additionally rise due to the fact that it would be necessary to pay for the individual valuation of every separate plot of land, as, under the Republic of Lithuania’s Law on the Bases for the Valuation of Property and Business, the individual valuation of land is carried out by independent valuers.

Such an amount of the aforesaid compensation would not correspond to the financial capacities of the state. The said situation, which would result if the corresponding amendments were made to the Methodology, under which the value of every plot of land would be assessed separately according to its market value, would be unfair towards all the members of the entire society, as the burden of ensuing obligations would be placed on all the residents of Lithuania, i.e. the state would be forced to find additional funds by, for example, raising taxes payable by all its residents or by borrowing funds, and doing so would harm the entire society.

1.3. In those cases where the restitution of property in kind is impossible, the persons seeking to restore the rights of ownership had and have the right to choose by themselves the forms of compensation provided for in Paragraph 9 of Article 16 of the Law. The said paragraph provides that, for the land that is to be purchased by the state, a citizen has the possibility of choosing to be compensated in the form of either monetary payment or other property. The state compensates for the land that used to be owned by citizens in an urban territory, where such land is to be purchased by the state, by employing such means whereby the plots of urban land are transferred into ownership for no consideration without having valued them beforehand at their actual market value, i.e. a plot of urban land is transferred not by taking account of its value but by reducing, by means of the area of the land to be transferred, the area of the land to which the citizens have the right to restore their rights of ownership. For example, in compensation for urban land that used to be owned and is categorised as land to be purchased by the state, a citizen may be granted, by transferring into his or her ownership for no consideration, a plot of land for the purposes of individual construction (construction of a private house) in the town where the land that used to be owned was located or the town where the citizen is living, or the citizen may be granted, by transferring into his or her ownership for no consideration, a plot of land for domestic use (intended for the construction of a private house) if the said citizen owns by the right of ownership a dwelling house or other buildings on the land other than the land that used to be owned by that citizen by the right of ownership (Items 2 and 3 of Paragraph 2 of Article 5 of the Law). The state, by transferring the said plots of land into ownership for no consideration, i.e. by restoring the rights of ownership without having valued, at their market value, the plots of land to be transferred, partly compensates for possible losses in the current value of the property that used to be owned. The majority of citizens who have the right to restore their rights of ownership to the urban land, which used to be owned by them, actually make use of the provided means. It should also be noted that persons seeking, in compensation for the urban land that used to be owned by them, to receive, in a rural area, a plot of land equivalent in value to the plot of urban land that used to be owned may be granted a plot of agricultural land of an area approximately 5 times larger than the area of the holding of urban land owned prior to the nationalisation.

1.4. When establishing the method for determining the price of land for the purposes of compensating for the land that used to be owned by citizens, the legislature is forbidden from violating not only the principle of fair compensation but also the constitutional principle of the equality of persons. Where the legal relations of the content at issue arise, it is not permitted to establish any new conditions, since this would violate the equality of the rights of the persons whose rights of ownership to urban land are to be restored. The first Methodology for Establishing the Price of Land to Be Purchased by the State, as approved by government resolution No. 473 of 18 November 1991, as well as the subsequent Methodology for Establishing the Nominal Price of Land to Be Purchased by the State, as approved by government resolution No. 909 of 6 December 1993, and the currently valid Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies to Be Purchased by the State do not differ in substance, i.e. all of them consolidate the same principles governing the assessment of the value of land that is to be purchased by the state. In this way, the legislation has created the uniform conditions for all persons, whose rights of ownership are to be restored to the respective land, to be granted the plots of land of an equivalent value or other property, and has ensured the principle of the equality of persons, as consolidated in Article 29 of the Constitution.

1.5. If the legislation included the legal regulation under which every plot of land would be separately valued at its market value, such a legal regulation would be unfair towards those citizens whose rights of ownership to land have already been restored by paying them compensation in cash (during the period starting from the beginning of the land reform and continuing until 1 January 2009, 1,298.4 million litas were paid from the state budget). In the event of the said regulation, financial harm would be caused to namely those citizens who applied for the restoration of their rights of ownership and submitted all necessary documents in accordance with the procedure and time limits as established by law and to whom the rights of ownership have already been restored. Consequently, larger compensation would be received by those citizens who have been more passive in the process of the restoration of the rights of ownership.

1.6. Neither the Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” nor the currently valid Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property provided (provides) that every plot of land must be valued separately, by taking account of its concrete location, i.e. the factors influencing its market value (distance to the centres of attraction, road network, communications, relief, attractiveness, etc.). In addition, in none of its acts (the rulings of 27 May 1994, 18 June 1998, 2 April 2001, 4 March 2003, and 20 May 2008), the Constitutional Court related the amount of compensation for unrecoverable land to the actual market price of such land.

1.7. When the process of restitution began and the Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” was adopted, the condition was established that, in the event of compensation, the value of the objects to be transferred in compensation for the real property to be purchased by the state must be equal to the value of the actually existing real property at the time of purchase, excluding the cost of its betterment, i.e. Article 17 of the said law consolidated the principle according to which, in compensating for the property to be purchased by the state, the point of reference was the value of the property concerned at the time when it had been taken over from its lawful owners. In observance of the said provision, the Methodology for Establishing the Price of Land To Be Purchased by the State, as approved by government resolution No. 473 of 18 November 1991, and the Methodology for Establishing the Nominal Price of Land To Be Purchased by the State, as approved by government resolution No. 909 of 6 December 1993, were prepared.

1.8. The scope of the restoration of the rights of ownership, the nonexistence of any well-established market in land at the beginning of the restitution process, and the limited material and financial capacities of the state, as well as the fact that, in certain cases, it had been impossible to determine the value of the landholdings owned prior to the nationalisation according to the actual use of the land (e.g., where the land had been categorised as urban land after 1940), or the value of the formerly owned land had considerably changed as a result of the character of the actual use of such land (e.g., where the area of the land had already been occupied by certain public premises and facilities, quarries, dumping grounds, water bodies, etc.), determined the situation where the valuation of land to be purchased by the state could not be individualised, i.e. there were no possibilities for a separate valuation of every plot of land to be purchased by the state or the establishment of certain individual properties of such a plot.

1.9. At that time, the analogous calculations of the land valuation of inter-war Lithuania and foreign countries were followed. The value of agricultural land to be sold by the state was calculated according to the value of the revenue or the value of the general crop production output as received per one unit of area (by analogy, in Poland, the value of 1 hectare was established according to the market price of the rye crop during the period of two years). The value of plots of forestry land was similarly established according to the market price of timber production. The value of urban land to be sold by the state was established by taking into account other factors—the size of a town and the location of a plot of land from the urban, ecological, commercial, and other aspects. The value of land to be purchased by the state was calculated by deducting, from the established value of land to be sold by the state, the average cost of the betterment of such land, i.e. the value of land to be purchased by the state did not include that part of the value that was added as a result of the works performed and the funds invested by the state, the respective municipality, or other persons (the creation of infrastructure, etc.). The value of urban land depended not only on the built streets and communications but also on the objects of the social infrastructure and on the existing business possibilities, as well as a considerable number of other reasons that additionally attracted residents to towns, i.e. the value of land had increased as a result of the resources allocated by both the state itself and the entire society.

In view of the foregoing, the Government approved such a principle of determining the value of land under which the price of urban land to be purchased by the state is determined according to the influence that the respective town had on the price of the land concerned prior to 1940. This means that the increase in the value of urban land is set to be such that the relationship between the price of urban land and the price of agricultural land in rural areas would meet the proportions established in Lithuania prior to 1940, i.e. so that the price of urban land and the price of agricultural land in rural areas would differ as much as 15 times. Thus, the equivalence between the amount of compensation for unrecoverable urban land and the value of such land was determined at the time when that land was unlawfully nationalised or otherwise unlawfully expropriated.

At present, in Lithuania, the average market price of agricultural land in rural areas is 3–5 thousand litas per hectare, whilst the price of urban land—600–1,500 thousand litas per hectare, i.e. approximately as much as 300 times bigger than the average market price of agricultural land in rural areas. The reason behind the increase in the said proportion is not the activity of the former owners of that land, but the conditions created by the state, municipalities, or other persons; therefore, an owner who owned the land prior to 1940 may not demand that the compensation for the land to be purchased by the state be paid in an amount equal to the value that has been created by the state or other persons.

1.10. Article 16 of the Law provides that different methods are applied to the calculation of the value of houses to be purchased and the value of land to be purchased by the state.

Land and buildings constitute real property of a different nature; therefore, in establishing the value of land and the value of houses, the same methods may not be applied. Because of its natural properties, land or a plot of land cannot be destroyed by conditions; it is a renewable resource. Whereas the lifespan of buildings is limited, since buildings annually depreciate physically and deteriorate in quality; therefore, after a certain period of time, they become unsuitable for exploitation. In addition, in the majority of cases, the value of the plot of land on which a building is situated constitutes the largest part of the market price of the building; however, during the valuation of buildings that are to be purchased, land is not valued and its value has no influence on the amount of the value of such buildings. Thus, taking account of its financial capacity, the state may compensate for buildings that are to be purchased with an amount equal to the market price rather than with an amount as established in a separate methodology; however, the value of land has changed considerably due to the aforementioned reasons, i.e. not as a result of the funds invested by the former owners who owned the land prior to the nationalisation but as a result of other factors not dependent on the former owners.

  1. By the Ordinance of the Prime Minister (No. 163) “Concerning the Authorisation to Act as a Representative at the Constitutional Court of the Republic of Lithuania” of 9 May 2013, A. Petkevičius, the Director of the Land Policy Department of the Ministry of Agriculture, and G. Tumalavičienė, the Head of the Land Law Division of the same department, were authorised to act in the constitutional justice case at issue as representatives of the Government, the party concerned.

IV

In the course of the preparation of the case for judicial consideration, letters were received from Kazys Starkevičius, the former Minister of Agriculture, Vitas Lopinys, the Director of the National Land Service under the Ministry of Agriculture, Birutė Baltrušaitytė, the Head of the Incoming Correspondence Unit of the Communications Department of the Office of the Seimas, Antanina Venckūnienė, the Acting Chairperson of the Council of the Lithuanian Landowners Union, and Kęstutis Mozeris, the Deputy Chairperson of the Council of the same union, which provide information on questions related to the constitutional justice case at issue.

V

At the Constitutional Court‘s hearing, A. Petkevičius and G. Tumalavičienė, the representatives of the Government, the party concerned, agreed with the arguments set forth in the written explanations of S. Staliūnas and A. Račkauskaitė, the former representatives of the Government, the party concerned, and answered the questions of the justices of the Constitutional Court.

The Constitutional Court

holds that:

I

  1. The Vilnius Regional Administrative Court, the petitioner, requests an investigation into whether the amount of the value of land as assessed at 6,000 litas per hectare in Item 4.2 of the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies To Be Purchased by the State, which was approved by Item 3 of government resolution No. 205 of 24 February 1999 (wording of 21 October 2002), is not in conflict with Paragraph 3 of Article 23 of the Constitution and Paragraph 2 of Article 16 of the Law (wording of 1 July 1997).

The petitioner, in substantiating its doubts regarding the compliance of Item 4.2 of the Methodology with the Constitution and the Law, maintains that the calculation of the value of plots of land to be purchased by the state, as established in this item, violates the principle of equivalence, since the calculated value of land to be purchased by the state does not correspond to an actual market value of such land. From the arguments of the petitioner, it is clear that the petitioner impugns not the compliance of the amount of the value of a plot of land as established in Item 4.2 of the Methodology but the compliance of the provision of Item 4 (wording of 21 October 2002) of the Methodology, which prescribes the method for calculating the value of urban land categorised as urban land used for other purposes where such land is to be purchased by the state (by paying in either cash or securities), with Paragraph 3 of Article 23 of the Constitution and Paragraph 2 of Article 16 of the Law (wording of 1 July 1997).

  1. In view of the foregoing, the Constitutional Court will investigate the compliance of the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology with Paragraph 3 of Article 23 of the Constitution and Paragraph 2 of Article 16 of the Law (wording of 1 July 1997).

II

  1. On 24 February 1999, the Government adopted the Resolution (No. 205) “On the Procedure for the Valuation of Land”, which came into force on 4 March 1999. By Item 3 of that resolution, the Government, by following the provisions, inter alia, of Article 16 of the Law (wording of 1 July 1997), approved the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies To Be Purchased by the State.

Item 1 of the Methodology (wording of 24 February 1999) prescribed: “This methodology shall be applied to calculate the value of land, forests, and water bodies categorised, under the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, as land, forests, and water bodies to be purchased by the state (with the exception of cases where, in compensation for the land, forest, or water body to be purchased by the state, the state transfers a plot of land or forest or a water body of an equivalent value in a different location into the ownership of the persons concerned).”

Item 4 of the Methodology (wording of 24 February 1999) prescribed:

“4. The value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at:

4.1. 1,700 litas per hectare for land used for agricultural purposes where it is categorised as Type 1; 1,450 litas per hectare for land used for agricultural purposes where it is categorised as Type 2; 1,050 litas per hectare for land used for agricultural purposes where it is categorised as Type 3; 650 litas per hectare for land used for agricultural purposes where it is categorised as Type 4;

4.2. 6,000 litas per hectare for urban land used for other purposes;

4.3. 3,000 litas per hectare for rural land used for other purposes.”

Thus, the Methodology (wording of 24 February 1999) was applied to calculate, inter alia, the value of land categorised, under the Law, as land to be purchased by the state (where no land of an equivalent value at another location was to be transferred into ownership). The amounts of the value of the said land were differentiated according to the use of land (the amounts of the value of the said land of agricultural use were additionally differentiated according to the type of such land). The Methodology established different amounts of value for land categorised as land used for agricultural purposes, urban land categorised as urban land used for other purposes, and rural land categorised as rural land used for other purposes.

  1. On 21 October 2002, the Government adopted the Resolution (No. 1671) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 205) ‘On the Procedure for the Valuation of Land’ of 24 February 1999”, which came into force on 26 October 2002. By that resolution, government resolution No. 205 of 24 February 1999 and the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies To Be Purchased by the State (wording of 24 February 1999), which had been approved by government resolution No. 205 of 24 February 1999, were amended and set forth in their new wording.

Item 1 of the Methodology (wording of 21 October 2002) prescribes: “This methodology shall be applied to calculate the value of land, forests, and water bodies categorised, under the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, as land, forests, and water bodies to be purchased by the state (with the exception of cases where, in compensation for the land, forest, or water body to be purchased by the state, the state transfers a plot of land or forest or a water body of an equivalent value at a different location into the ownership of the persons concerned).”

Item 4 (wording of 21 October 2002) of the Methodology prescribed:

“The value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at:

4.1. 1,700 litas per hectare for land used for agricultural purposes where it is categorised as Type 1; 1,450 litas per hectare for land used for agricultural purposes where it is categorised as Type 2; 1,050 litas per hectare for land used for agricultural purposes where it is categorised as Type 3; 650 litas per hectare for land used for agricultural purposes where it is categorised as Type 4;

4.2. 6,000 litas per hectare for urban land used for other purposes;

4.3. 3,000 litas per hectare for rural land used for other purposes.”

The comparison of the legal regulation established in Item 1 of the Methodology (wording of 21 October 2002), as well as in Item 4 thereof, the compliance of whose provision is investigated in the constitutional justice case at issue, with the legal regulation established in Items 1 and 4 of the Methodology (wording of 24 February 1999) makes it clear that the provisions of the Methodology related to the purpose of the Methodology and the calculation of the value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) have remained unchanged—the Methodology (wording of 21 October 2002) is applied to calculate, inter alia, the value of land categorised, under the Law, as land to be purchased by the state (where no other land of an equivalent value at another location is to be transferred into ownership). The amounts of the value of the said land are differentiated according to the use of land (the amounts of the value of the said land of agricultural use are additionally differentiated according to the type of such land). The Methodology establishes different amounts of value for land categorised as land used for agricultural purposes, urban land categorised as urban land used for other purposes, and rural land categorised as rural land used for other purposes. Neither were any changes made to the provision that the value of urban land used for other purposes is assessed at 6,000 litas per hectare.

  1. The Methodology (wording of 21 October 2002) was subsequently amended by the Resolution of the Government of the Republic of Lithuania (No. 1390) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 205) ‘On the Procedure for the Valuation of Land’ of 24 February 1999” of 8 November 2004 and the Resolution of the Government of the Republic of Lithuania (No. 294) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 205) ‘On the Procedure for the Valuation of Land’ of 24 February 1999” of 10 April 2013.

The aforesaid government resolution No. 294 of 10 April 2013, which came into force on 14 April 2013, amended, inter alia, the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at:” of Item 4 (wording of 21 October 2002) of the Methodology by removing the words “or securities” and setting forth the provision in question as follows: “The value of a plot of land or forest to be purchased by the state (by paying in cash) shall be calculated by multiplying the area of such a plot by the value of land as assessed at:”. Thus, as from 14 April 2013, Item 4 (wording of 10 April 2013) of the Methodology is applied to calculate only the value of a plot of land or forest that is to be purchased by the state by paying in cash.

It should be noted that, after the aforementioned changes were made to the Methodology, Item 4 (wording of 10 April 2013) thereof continues to prescribe that “[t]he value of a plot of land or forest to be purchased by the state (by paying in cash) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes”, i.e. the method for calculating the value of urban land categorised as urban land used for other purposes, where such land is to be purchased by the state, has remained unchanged from the aspect that the value of a plot of land or forest to be purchased by the state is calculated by multiplying the area of such a plot by the value of land that is assessed to be 6,000 litas per hectare for urban land used for other purposes.

  1. In the context of the constitutional justice case at issue, it should be noted that the provisions related to the calculation of the value of a plot of urban land used for other purposes, where such land is to be purchased by the state (by paying in cash; and until 13 April 2013—by paying in either cash or securities), are also consolidated in other items of the Methodology.

4.1. Item 6 of the Methodology (wording of 21 October 2002) provides that, taking account of the location of the previously owned plot of land or forest or water body, correction coefficients are applied to the value of the land or forest to be purchased by the state, so that the social-manufacturing potential of the territory concerned could be assessed. These correction coefficients are specified in, inter alia, 6.1 and 6.2 Items of the Methodology.

Item 6.1 (wording of 8 November 2004) of the Methodology provides that, where a plot of land is within the boundaries of urban territories approved according to the established procedure prior to 1 June 1995, the following correction coefficients to assess the social-manufacturing potential of the territory are applied: in Vilnius and Kaunas—8; in Klaipėda, Šiauliai, Panevėžys, Alytus, and Marijampolė—6; in other towns with the number of residents exceeding 30,000 and in the centres of municipalities (with the exception of the centres of the Elektrėnai, Kalvarija, Kazlų Rūda, Pagėgiai, Rietavas, Birštonas, Druskininkai, Visaginas, and Palanga municipalities)—5; in other towns with the number of residents from 10,000 to 30,000—4; in other towns with the number of residents not exceeding 10,000—3; in small towns and villages with the number of residents exceeding 200 in compactly built-up territories—2; in other rural residential areas—1.

Item 6.2 (wording of 8 November 2004) of the Methodology prescribes that, where a plot of land or forest is in the territories categorised, under the relevant government resolutions, as urban territories outside the boundaries of towns as residential areas prior to 1 June 1995, or in the territories categorised as urban by the Government from 1 August 1991 until 1 June 1995, the coefficients for towns as indicated in Item 6.1 of the Methodology are applied by multiplying them by the correction coefficient of 0.8; where a plot of land or forest is categorised, by law, as urban territory after 1 June 1995, the coefficients for towns as indicated in Item 6.1 of the Methodology are applied by multiplying them by the correction coefficient of 0.4.

Thus, under the legal regulation consolidated in Items 6.1 and 6.2 of the Methodology, the value of land in the amount of 6,000 litas per hectare as established in Item 4.2 (wording of 21 October 2002) of the Methodology for urban land used for other purposes, where such land is to be purchased by the state (by paying in cash; and until 13 April 2013—by paying in either cash or securities), may be corrected (by applying the relevant coefficients) by taking into account the following: in which of the indicated towns (Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė) a plot of land is located; and, where a plot of land is located in other towns, account is taken of the number of the residents of the town concerned, or, in appropriate cases—of the fact whether a plot of land is located in the centre of certain municipalities, as well as whether the territory where a plot of land is located was categorised as urban prior to 1 June 1995 or after 1 June 1995.

4.2. Item 9 of the Methodology (wording of 21 October 2002) prescribes: “The value of land, forests, and water bodies to be purchased by the state, as calculated in the manner specified in Items 5–7 and 10 of this Methodology and expressed in litas, shall be indexed in the same manner as the value of land to be sold by the state.”

Under Item 2.1.2 (wording of 1 October 2008) of government resolution No. 205 of 24 February 1999 (wording of 21 October 2002), the Methodology for the Valuation of Land, as approved by this government resolution, is applied to calculate the value of the plots of state-owned land to be used as domestic landholdings (intended for the construction of a private house), the plots of land located in the territory of amateur gardens, the plots of land used for garages of the communities of garage construction and exploitation, as well as the plots of land used for individual garages, where these enumerated plots of land are to be sold without auction. Item 6 of the Methodology for the Valuation of Land (wording of 21 October 2002), inter alia, prescribes: “From 1 February 1995, the value of state-owned land (excluding additional value due to engineering structures), forest land, and water bodies shall be indexed by the index of 1.6 <...>.”

Thus, the value of land to be purchased by the state as expressed in litas and calculated in the manner specified in, inter alia, Item 6 of the Methodology (wording of 21 October 2002), as well as the value of the land indicated in Item 2.1.2 (wording of 1 October 2008) of government resolution No. 205 of 24 February 1999 (wording of 21 October 2002), where such land is to be sold by the state, is indexed by the index of 1.6.

4.3. To sum up the aforementioned provisions of the Methodology (wording of 21 October 2002) that are related to the calculation of the value of a plot of urban land categorised as urban land used for other purposes, where such land is to be purchased by the state (by paying in cash; and until 13 April 2013—by paying in either cash or securities), it should be held that the said provisions establish such coefficients for towns and such an index of the value of land as a result of the application of which the value of 1 hectare of urban land categorised as urban land used for other purposes may, after it is calculated according to Item 4.2 of the Methodology, increase to an amount that is from several to more than ten times higher than the amount of 6,000 litas.

  1. It should be noted that the method for calculating the value of a plot of urban land used for other purposes, where such land is to be purchased by the state, according to which the value of a plot of urban land used for other purposes, where such land is to be purchased by the state, is calculated by multiplying the area of a plot by the land price that is established by the Government and corrected (by applying the relevant coefficients) in view of certain criteria, was also consolidated in the following former methodologies as approved by the respective government resolutions: the Methodology for Establishing the Price of Land to Be Purchased by the State, as approved by the Government Resolution (No. 473) “On Establishing the Nominal Price and the Procedure for the Purchase of Land, Forests, and Water Bodies” of 18 November 1991, and the Methodology for Establishing the Nominal Price of Land To Be Purchased by the State, as approved by the Government Resolution (No. 909) “On Establishing the Nominal Price of State-Owned Land to Be Sold and Land to Be Purchased by the State and the Procedure for the Application Thereof” of 6 December 1993.
  2. It has been mentioned that, in the constitutional justice case at issue, the Constitutional Court is investigating the compliance of the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology with, inter alia, Paragraph 2 of Article 16 of the Law (wording of 1 July 1997).

From the Preamble to government resolution No. 205 of 24 February 1999, by means of which the Methodology (wording of 24 February 1999) was approved, it is clear that this government resolution was adopted with a view to implementing the provisions of the Law (wording of 1 July 1997), inter alia, the provisions of Article 16 thereof.

  1. Paragraph 2 of Article 16 “Compensation to Citizens for Real Property To Be Purchased by the State” of the Law (wording of 1 July 1997) prescribes: “When compensating citizens for real property not to be restituted in kind under this Law, the state shall follow the principle of equivalence between the property not to be restituted and the property to be transferred in compensation for the property to be purchased by the state.”

In the context of the constitutional justice case at issue, it should be noted that the principle of equivalence, which is consolidated in Paragraph 2 of Article 16 of the Law (wording of 1 July 1997), must equally be observed in compensating citizens for any type of real property that is to be purchased by the state and to which the rights of ownership may be restored under this law. The concrete content of this principle is disclosed in other provisions of the Law (wording of 1 July 1997).

  1. The content of the principle of equivalence, which is related to compensation for land to be purchased by the state in urban territory, can be disclosed, inter alia, by invoking the following articles of the Law.

8.1. Item 2 (wording of 2 April 2002) of Paragraph 2 (wording of 16 November 2006) of Article 5 “Conditions and the Procedure for the Restoration of the Rights of Ownership to Urban Land” of the Law prescribes: “The rights of ownership to the land situated prior to 1 June 1995 in the territories categorised, in the prescribed manner, as urban land shall be restored according to the following procedure: <...> 2) citizens owning dwelling houses or other buildings by the right of ownership on the land other than the land that used to be owned by them by the right of ownership may be granted, by transferring into their ownership for no consideration, a plot of land adjoining the said buildings that has been in use by them and the boundaries of which are set in the territorial planning documents, or a plot of land in use by them that is categorised as land to be used for other purposes (kitchen garden, garden, etc.) and is provided for in the territorial planning documents, except in the territory of the National Park of the Curonian Spit, and provided a plot of land to be transferred does not exceed 0.2 hectares where it is located in Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė, Druskininkai, Palanga, or Birštonas and 0.3 hectares—in other towns. The area of the said plots of land, which have been in use and are to be transferred into ownership for no consideration, shall be used to correspondingly reduce the area of the plot of land to be restituted in kind or the plot of land to be purchased by the state;”

Item 3 (wording of 2 April 2002) of Paragraph 2 (wording of 16 November 2006) of Article 5 of the Law prescribes: “The rights of ownership to the land situated prior to 1 June 1995 in the territories categorised, in the prescribed manner, as urban land shall be restored according to the following procedure: <...> 3) citizens may be granted, by transferring into their ownership for no consideration, a new plot of land, either equipped or not equipped in the manner prescribed by the Government, after the Government approves the size of its area in a town where the land that used to be owned was located, except in the territory of the National Park of the Curonian Spit, or, at the request of the citizens—in a town where they are residing (except in the towns of Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė, Druskininkai, Palanga, and Birštonas and the territory of the National Park of the Curonian Spit). New plots of land in the parts lying within the urban areas entered in the Register of Immovable Cultural Properties of the Republic of Lithuania (the List of Cultural Areas) shall not be transferred into ownership for the purposes of individual construction (of a private house) or for other purposes (except in the cases where the territorial planning documents permit individual construction (of a private house) in this territory for a citizen on the land that used to be owned by him or her by the right of ownership); the plots of land in use shall be transferred for no consideration into ownership of only those persons who own dwelling houses or other buildings by the right of ownership in the said parts of urban territories. In the cases where a citizen refuses a new plot of land that may be transferred into his or her ownership for no consideration for individual construction (of a private house), no matter whether the plot of land is equipped or not equipped (at choice) in the manner prescribed by the Government, the citizen may, at his or her request, receive compensation in the amount of an average sum of the value of a plot of land (the size of which is determined by the Government) in the same town in accordance with Article 16 of this Law. The said sum of money shall be fixed by the Government.”

Item 4 (wording of 3 August 2001) of Paragraph 9 of Article 16 of the Law, inter alia, prescribes: “The State shall compensate citizens for land, forests, and water bodies to be purchased by the State in the following ways: <...> 4) by transferring, into ownership for no consideration for the purposes of individual construction (of a private house), a new plot of urban land equivalent in value to the plot of land that used to be owned <...>. In the manner prescribed by the Government, a new plot of land equivalent in value to the plot of land that used to be owned may, at the request of a citizen, be transferred into ownership for no consideration for the purposes of individual construction (of a private house) in the towns and rural areas other than those where the plot of land that used to be owned was located, except in the towns of Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė, Druskininkai, Palanga, Birštonas, and Neringa.”

Thus, under the legal regulation in question, in the cases where the land that used to be owned by a citizen was in the territories categorised as urban prior to 1 June 1995, the state may compensate for such land, which is to be purchased by the state, in the following ways: 1) by transferring, into ownership for no consideration for the purposes of individual construction (of a private house), a new plot of land equivalent in value to the plot of land that used to be owned in either a town where the plot of land that used to be owned was located or a town other than that where the plot of land that used to be owned was located (except in certain towns); 2) citizens owning dwelling houses or other buildings by the right of ownership on the land other than the land that used to be owned by them by the right of ownership may be granted, by transferring into their ownership for no consideration, a plot of land adjoining the said buildings that has been in use by them and the boundaries of which are set in the territorial planning documents, or a plot of land in use by them that is categorised as land to be used for other purposes (kitchen garden, garden, etc.) and is provided for in the territorial planning documents (except in certain territories).

8.2. Paragraph 3 of Article 5 of the Law (wording of 1 July 1997), inter alia, prescribes: “The maximum area of a plot of land to be transferred into ownership for no consideration must not exceed 0.2 hectares in Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė, Druskininkai, Palanga, and Birštonas, and 0.3 hectares—in other towns.”

Paragraph 5 of Article 5 of the Law (wording of 1 July 1997) prescribes: “Where the area of a plot of land to be restituted to a citizen or transferred into the ownership of a citizen for no consideration in the territory categorised as urban land is smaller than the area of a plot of land to which, under this Law, his or her rights of ownership are to be restored, the State shall compensate such a citizen for the remaining area of the plot of land in the manner provided for in Article 16 of this Law.”

8.3. Paragraph 3 (wording of 1 July 1997) of Article 16 of the Law, inter alia, prescribes: “In compensating for land located in urban territory, the state shall follow the provision that land categorised as urban upon the unlawful land nationalisation must be valued at the average market price of agricultural land in suburban territories, whilst the other land located in urban territories must be valued at the average compensation price as determined for a particular town by the Government.”

In order to construe the legal regulation established in Paragraph 3 (wording of 1 July 1997) of Article 16 of the Law in conjunction with the legal regulation established in Item 3 (wording of 2 April 2002) of Paragraph 2 (wording of 16 November 2006) of Article 5 of the Law, it should be noted that, in the cases where a citizen refuses a new plot of land, which may be either equipped or not equipped (at choice) in the manner prescribed by the Government, where such a plot of land may be transferred to his or her ownership for no consideration for the purposes of individual construction (of a private house), such a citizen is compensated for the whole formerly owned land that is to be purchased by the state at the average compensation price as established by the Government.

It should also be noted that, under Paragraph 3 (wording of 15 October 2002) of Article 21 of the Law, citizens could, until 1 April 2003, express or change their will regarding the form of restoring their rights of ownership to real property where no decision had been adopted yet to restore the rights of ownership.

8.4. In the context of the constitutional justice case at issue, it should be noted that, through the aforementioned provision of Paragraph 3 (wording of 1 July 1997) of Article 16 of the Law, the legislature commissioned the Government to establish the average compensation price of land (for each town separately) categorised as urban prior to the unlawful land nationalisation.

Although the aforesaid article of the Law does not specify any criteria that must be followed in establishing the average compensation price of the land in question, the overall legal regulation laid down in the Law implies certain requirements that must be followed in establishing that price.

8.4.1. In the Constitutional Court’s ruling of 30 September 2003, it is held that, from the legal regulation established in the Republic of Lithuania’s Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, adopted by the Supreme Council of the Republic of Lithuania on 18 June 1991, it is clear that the legislature opted for limited restitution rather than restitutio in integrum, as well as that the said law was subsequently amended and/or supplemented on more than one occasion, but the principle that restitution is limited continues to be preserved.

In this context, it should be noted that Paragraph 1 (wording of 18 June 1991) of Article 17 of the Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, as adopted by the Supreme Council on 18 June 1991, prescribed that, in the cases where the state was to purchase the existing real property, an amount of lump sum payments to be paid by the state was determined by taking into account the actual value of the property concerned at the time of purchase, excluding the cost of its betterment. After Article 17 of the Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” (wording of 18 June 1991) had been set forth in its new wording of 12 January 1993, Paragraph 1 thereof prescribed that, in the cases where the state was to purchase the existing real property, the actual value of the property to be transferred in kind at the moment of purchase must be equivalent to the property to be purchased, and Paragraph 2—that the amount of lump sum payments to be paid by the state and the type and number of shares to be handed out must be established by taking into account the actual value of the property concerned at the time of purchase, excluding the cost of its betterment. Later, after Paragraph 2 of Article 17 of the Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property” had been once again amended and set forth in its new wording of 30 May 1995, it prescribed: “The amount of lump sum payments to be paid by the state, the sum of money, the number of shares to be handed out, as well as the value of a plot of land or forest or property of another type, shall be established by taking into account the actual value of the existing real property at the time of purchase, excluding the cost of its betterment.”

Thus, since the beginning of the restitution process, i.e. since 1991, the law has consolidated the principled provision expressing limited restitution, according to which compensation for real property to be purchased by the state is determined by taking into account the actual value of the existing real property at the time of purchase, excluding the cost of its betterment.

8.4.2. Paragraph 1 of Article 1 “The Purpose and Definitions of the Law” of the Law (wording of 1 July 1997) stipulates that this law, taking into consideration the objective property relations that have formed in society, regulates the procedure and conditions for the restoration as well as the recognition of the continuity of the restoration of the rights of ownership of the citizens of the Republic of Lithuania whose real property had been nationalised under the laws of the USSR (or the laws of the Lithuanian Soviet Socialist Republic) or otherwise unlawfully expropriated, and whose rights of ownership started to be restored under the Republic of Lithuania’s Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”.

Thus, the Law (wording of 1 July 1997) recognises the continuity of the restoration of the rights of ownership of citizens, and this continuity is founded on the principled provisions of the Law “On the Procedure and Conditions for the Restoration of the Rights of Ownership of Citizens to the Existing Real Property”, as adopted by the Supreme Council on 18 June 1991 (with subsequent amendments and/or supplements). The latter provisions provided the grounds to start the restoration of the rights of ownership of citizens to the nationalised or otherwise unlawfully expropriated real property.

8.4.3. Limited restitution is reflected in various provisions of the Law (wording of 1 July 1997 with subsequent amendments and/or supplements): in Article 2, which enumerates citizens entitled to the restoration of the rights of ownership, in Article 3, which specifies property to which the rights of ownership may be restored, in Article 5, which lays down the conditions and procedure for the restoration of the rights of ownership to urban land, in Article 16, which provides for compensation for real property to be purchased by the state, in Article 21, which, inter alia, sets the time limits within which citizens could express or change their will regarding the form of restoring their rights of ownership to real property, etc.

In the context of the constitutional justice case at issue, it should be noted that the application of limited restitution in restoring the rights of ownership to urban land is evident from, inter alia, Paragraph 1 of Article 5 of the Law, which establishes the maximum area of land to which the rights of ownership may be restored, also Item 1 of Paragraph 2 of Article 5, under which the area of the vacant (non-built-up) land to be restituted in kind is reduced to the size of a plot of land of one hectare where the said area has been subdivided into the plots of land to be transferred for no consideration to citizens for the purposes of individual construction (construction of private houses) and where such plots of land may not be planned in any other territories of the town concerned due to the lack of vacant (non-built-up) land in that town, as well as Paragraph 3 of Article 5, which provides for, inter alia, the maximum sizes of the area of a plot of land to be transferred into ownership for no consideration where such a plot is located in the territory categorised as urban land, and Paragraph 3 of Article 16, whereby the Government is commissioned to establish (for each town separately) the average compensation price of land  categorised as urban prior to the unlawful land nationalisation.

8.5. To sum up the foregoing, it should be held that, when approving the Methodology, inter alia, the provision of Item 4 thereof, which is investigated in the constitutional justice case at issue, the Government was obliged to observe, inter alia, Paragraphs 2 and 3 of Article 16 of the Law and to take account of the overall legal regulation laid down in the Law.

8.6. In this context, it should be noted that the compliance of the provision “[i]n compensating for land located in urban territory, the state shall follow the provision that land categorised as urban upon the unlawful land nationalisation must be valued at the average market price of agricultural land in suburban territories, whilst the other land located in urban territories must be valued at the average compensation price as determined for a particular town by the Government” of Paragraph 3 (wording of 1 July 1997) of Article 16 of the Law (which, as mentioned before, constitutes one of the legal grounds for approving the Methodology, inter alia, Item 4 thereof) with Paragraph 3 of Article 23 and Article 29 of the Constitution was a matter of investigation in the constitutional justice case in which the Constitutional Court adopted the ruling of 2 April 2001 recognising the said provision as not in conflict with the Constitution.

III

  1. It has been mentioned that, in the constitutional justice case at issue, the Constitutional Court is investigating the compliance of the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” (wording of 21 October 2002) of Item 4 of the Methodology with, inter alia, Paragraph 3 of Article 23 of the Constitution.
  2. Article 23 of the Constitution prescribes:

“Property shall be inviolable.

The rights of ownership shall be protected by law.

Property may be taken over only for the needs of society according to the procedure established by law and shall be justly compensated for.”

  1. The right of ownership as an innate right of a human being, in the sense of Article 23 of the Constitution, may not be equated to the right of a citizen of the Republic of Lithuania to restore the rights of ownership to the existing real property according to the procedure established by law (the Constitutional Court’s ruling of 22 December 2010).

When interpreting the content of Article 23 of the Constitution in the context of the restoration of the rights of ownership, the Constitutional Court has held that the constitutional guarantee of the inviolability of property, as well as the constitutional regulation of the taking of private property for the needs of society, denies any possibility of universal nationalisation without compensation; such a concept of the function of Article 23 of the Constitution implies that, in restoring the rights of ownership to citizens whose rights of ownership were universally and unlawfully denied by the occupation government, the state must also follow the principle of fair compensation for property to be purchased by the state (the Constitutional Court’s ruling of 18 June 1998).

  1. The Constitutional Court, when construing Article 23 of the Constitution, has also held on more than one occasion that the legislature, in regulating the restoration of the denied rights of ownership, has discretion to establish the conditions and procedure for the restoration of the rights of ownership as well as that this discretion is objectively determined by the fact that, during the period following the unlawful expropriation of property, the system of the relations of ownership has changed in substance (the Constitutional Court’s rulings of 2 April 2001 and 4 March 2003). Nonetheless, when establishing, by law, the conditions and procedure for the restoration of the rights of ownership to the existing real property, the legislature is bound by the Constitution; thus, the legislature is also obliged to take account of the constitutional principles of the protection of the rights of ownership as well as of the constitutional striving for an open, just, and harmonious civil society and other constitutional values (the Constitutional Court’s ruling of 4 March 2003).
  2. The Constitutional Court has held on more than one occasion that the provision according to which compensation must be granted where the restitution of property in kind is impossible is not in conflict with the principles of the inviolability of property and the protection of the rights of ownership, since fair compensation ensures the restoration of the rights of ownership (inter alia, the Constitutional Court’s rulings of 23 August 2005, 5 July 2007, 6 September 2007, 9 March 2010, and 30 May 2013).

When interpreting Article 23 of the Constitution in the context of the restoration of the rights of ownership to the existing real property, the Constitutional Court has also held on more than one occasion that, in deciding whether compensation for the existing real property not to be restituted in kind is fair, regard should be paid to the fact that it was not the State of Lithuania that unlawfully nationalised or otherwise unlawfully expropriated the property of owners; the State of Lithuania, seeking, at least in part, to restore justice—to restore the violated rights of ownership, has opted for limited restitution rather than restitutio in integrum; the restoration of justice at issue, where owners are compensated for the existing real property not to be restituted in kind, has two sides: this is justice towards both an owner and the entire society. The unlawful actions of the occupation government inflicted enormous damage not only on the owners whose rights of ownership were denied but also on the entire society and the entire state; in restoring justice towards owners, the state may not ignore justice towards the entire society, whose members also include the said owners; in the process of the restoration of the rights of ownership, the state must strive for a balance between the persons whose rights are to be restored and the interests of the entire society (the Constitutional Court’s rulings of 4 March 2003, 5 July 2007, and 20 May 2008).

Land that is not to be restituted in kind to owners due to its indispensability for the needs of society is to be purchased by the state, and the owners concerned must be compensated for it in the forms and manner as established by law; when establishing, by law, the forms of and procedure for compensating owners for land to be purchased by the state, the legislature must pay heed to a balance between the legitimate interests of a person and those of society (the Constitutional Court’s ruling of 10 May 2002).

  1. In its ruling of 4 March 2003, the Constitutional Court held that, in deciding whether compensation for the existing real property not to be restituted in kind is fair, account should be taken not only of the actual market value of the property not to be restituted in kind but also of the value of that property at the time when it was unlawfully nationalised or otherwise unlawfully expropriated as well as of the changes in the quality and value of that property. The state may not establish any such forms and amounts of compensation that would be financially unbearable for society and the state, would place a disproportionally big financial burden on society, and would cause social tension and conflict. Otherwise, the constitutional imperative of a harmonious and just society would be violated.
  2. In its ruling of 18 June 1998, the Constitutional Court held that the deduction of the cost of land betterment is not in itself incompatible with the provision of fair compensation. At the same time, the Constitutional Court noted that the legal regulation of compensation for property to be purchased by the state had been determined, among other factors, by the limited material and financial capacities of the state. When the state undertakes certain obligations through a law, these obligations must be supported by the available material and financial resources, otherwise the law becomes ineffective. Therefore, taking into consideration the capacities of the state, the legislature may establish the corresponding amounts of compensation for property to be purchased by the state.
  3. In the ruling of 2 April 2001, given in the constitutional justice case in which the Constitutional Court investigated whether the restoration of the rights of ownership to land located in urban territories, as established in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, was not in conflict with the Constitution, the Constitutional Court held that the location of the land, as well as the fact when the land was categorised as urban territory, i.e. prior to or after its unlawful nationalisation, implies the discretion of the legislature to lay down different methods for establishing the price of land. When providing for a method for establishing the price of land, the legislature may not violate the principle of fair compensation and the constitutional principle of the equality of persons.

In the aforesaid ruling, the Constitutional Court noted that, in deciding whether the impugned legal regulation is in compliance with the Constitution, a fact of crucial importance is not what forms of compensation are established but whether those forms can secure actual and fair compensation for land to be purchased by the state.

  1. At the same time, it should be noted that, in its ruling of 4 March 2003, the Constitutional Court pointed out that fair compensation for property unlawfully nationalised or otherwise unlawfully expropriated may not be equated to fair compensation for property taken over for the needs of society, i.e. when property for the needs of society is taken under Article 23 of the Constitution, compensation for such property is fair if it is equal in value to the property taken over.

The restoration of the rights of ownership to the existing real property, including the restoration whereby monetary compensation is paid for property to be purchased by the state, may not be equated to the taking of property for the needs of society by fairly compensating for such property as provided for in Paragraph 3 of Article 23 of the Constitution—the nature and purpose of these legal institutes are different (the Constitutional Court’s ruling of 23 August 2005).

  1. In order to sum up the aforementioned provisions of the official constitutional doctrine that are related to fair compensation for the real property claimed by citizens seeking to restore their rights of ownership, where such property is to be purchased by the state, in the context of the constitutional justice case at issue, it should be noted that:

– fair compensation for property unlawfully nationalised or otherwise unlawfully expropriated by the state that had occupied Lithuania may not be equated to fair compensation for property taken over by the State of Lithuania for the needs of society;

– in restoring justice towards owners, the state may not ignore justice towards the entire society, whose members also include the said owners; during the process of the restoration of the rights of ownership, a balance should be sought between the interests of persons to whom their rights of ownership are to be restored and the interests of the entire society;

– the state may not establish any such forms and amounts of compensation that would be financially unbearable for society and the state, would place a disproportionally big financial burden on society, and would cause social tension and conflict; when establishing, by law, the forms of and procedure for compensating owners for land that is to be purchased by the state, the legislature must pay heed to a balance between the legitimate interests of a person and those of society;

– in the process of the restoration of the rights of ownership that were unlawfully and universally denied by the occupation government to citizens, fair compensation ensures the restoration of the rights of ownership;

– taking into consideration the capacities of the state, the legislature may establish the corresponding amounts of compensation for property to be purchased by the state;

– in deciding whether compensation for the existing real property not to be restituted in kind is fair, account should be taken not only of the actual market value of the property not to be restituted in kind but also of the value of that property at the time when it was unlawfully nationalised or otherwise unlawfully expropriated as well as of the changes in its quality and value;

– the deduction of the cost of land betterment is not in itself incompatible with the provision of fair compensation; the location of the particular land, as well as the fact when the land was categorised as urban territory, i.e. prior to or after its unlawful nationalisation, implies the discretion of the legislature to lay down different methods for establishing the price of land.

IV

  1. The Constitutional Court has held on more than one occasion that the jurisprudence of the European Court of Human Rights (hereinafter referred to as the ECtHR), as a source of construction of law, is also important for the construction and application of Lithuanian law.
  2. In the context of the constitutional justice case at issue, consideration should be given to the jurisprudence of the ECtHR in which the content of Article 1 “Protection of Property” of Protocol No. 1 of the Convention for the Protection of Human Rights and Fundamental Freedoms (hereinafter referred to as the Convention) is disclosed in the context of restitution—the restoration of the rights of ownership.

In its judgment of 4 March 2003 in the case Jantner v. Slovakia (petition No. 39050/97), the ECtHR held that Article 1 of Protocol No. 1 of the Convention does not impose any restrictions on the freedom of the Contracting States in determining the scope of restitution and choosing the conditions under which they accept to restore the rights of ownership to former owners. In its judgment of 12 October 2010 in the case Maria Atanasiu and Others v. Romania (petitions Nos. 30767/05 and 33800/06), the ECtHR pointed out that, in the states concerned with the restitution process, restitution is not an absolute right and it may be subject to numerous conditions and restrictions.

In its decision of 2 March 2005 as to the admissibility of the applications in the case Maltzan and Others v. Germany (petitions Nos. 71916/01, 71917/01, and 10260/02), concerning the unlawfully expropriated land for which the applicants sought to receive a considerably larger compensation, corresponding to the actual value of the land concerned, as the restitution of that land was impossible, the ECtHR ruled that neither the German laws establishing the amounts of compensation nor the judgments or decisions of the Federal Constitutional Court of Germany concerning the compliance of the laws on the land reform with the Basic Law had not infringed the right of the applicants to the peaceful enjoyment of their possessions. In the latter decision, the ECtHR also noted that, where a state elects to redress the consequences of certain acts that are incompatible with the principles of a democratic regime but for which it is not responsible, it has a wide margin of appreciation in the implementation of that policy.

In its decision of 15 May 2007 as to the admissibility of the application in the case Leuschner v. Germany (petition No. 58623/00), the ECtHR held that the applicant, who was contesting the amount of the compensation for the unlawfully expropriated land the restitution of which was impossible, did not have any legitimate expectation to receive a sum of compensation larger than that provided for by law; therefore, the applicant could not invoke Article 1 of Protocol No. 1 of the Convention.

Article 1 of Protocol No. 1 of the Convention does not guarantee a right to full compensation for unlawfully expropriated property (the judgment of the ECtHR of 22 June 2004 in the case Broniowski v. Poland (petition No. 31443/96)). Setting a cap on compensation for the unlawfully expropriated property that belonged to a person by the right of ownership might help to strike a fair balance between the interests of former owners and the general interest of the community (the aforementioned judgment of the ECtHR of 12 October 2010 in the case Maria Atanasiu and Others v. Romania (petitions Nos. 30767/05 and 33800/06)). The ECtHR has also held that, when reforming its legal system and economy, a state may adopt decisions establishing such compensation for the unlawfully expropriated property that belonged to a person by the right of ownership that is considerably lower than the market value of the property concerned (the judgment of the ECtHR of 15 November 2011 in the case Sivova and Koleva v. Bulgaria (petition No. 30383/03)).

In the case in which the applicants complained that the compensation granted to them for the agricultural land that had belonged by the right of ownership to their father was considerably lower than the actual market value of that land, the ECtHR observed that the increase in the market price of the disputed land had been determined by such factors as its allocation for use as a campsite, the works of land management and infrastructure betterment carried out in the course of several decades, as well as by the development of tourism, and that the applicants had not contributed in any way to the resulting enhancement in value of the land concerned; therefore, according to the ECtHR, the public authorities had reasonably established such a method for calculating compensation that was based not on the prices of land reformed in the course of several decades but the prices of land used for agricultural purposes (the aforementioned judgment of the ECtHR in the case Sivova and Koleva v. Bulgaria (petition No. 30383/03)).

  1. Thus, under the jurisprudence of the ECtHR, the right to restitution—the restoration of the rights of ownership—is not absolute and it may be subject to various conditions and restrictions; the Convention does not guarantee a right to full compensation for unlawfully expropriated property; compensation for the unlawfully expropriated property that belonged by the right of ownership to a person may be considerably lower than the actual market value of such property.

V

On the compliance of the provision of Item 4 (wording of 21 October 2002) of the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies to Be Purchased by the State, as approved by government resolution No. 205 of 24 February 1999 (wording of 21 October 2002), with Paragraph 3 of Article 23 of the Constitution and Paragraph 2 of Article 16 of the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of 1 July 1997).

  1. It has been mentioned that, in the constitutional justice case at issue, the Constitutional Court is investigating whether the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology was not in conflict with, inter alia, Paragraph 3 of Article 23 of the Constitution.

The petitioner substantiates its doubts regarding the compliance of the aforesaid provision of the Methodology with the Constitution by the fact that, according to the petitioner, the value of land as assessed at the amount of 6,000 litas per hectare in the Methodology is not in line with the principle of fair compensation, which is consolidated in Paragraph 3 of Article 23 of the Constitution, since the said amount is insufficient to acquire other property of the same value.

  1. In this ruling the following has been mentioned:

– the restoration of the rights of ownership to the existing real property, including the restoration whereby monetary compensation is paid for property that is to be purchased by the state, may not be equated to the taking of property for the needs of society by fairly compensating for such property as provided for in Paragraph 3 of Article 23 of the Constitution—the nature and purpose of the said legal institutes are different;

– taking into consideration the capacities of the state, the legislature may establish the corresponding amounts of compensation for property to be purchased by the state; however, the state may not establish any such forms and amounts of compensation that would be financially unbearable for society and the state, that would place a disproportionally big financial burden on society, and that would cause social tension and conflict; when establishing, by law, the forms of and procedure for compensating owners for land that is to be purchased by the state, the legislature must pay heed to a balance between the legitimate interests of a person and those of society;

– in restoring the rights of ownership to citizens whose rights of ownership were universally and unlawfully denied by the occupation government, the state must also follow the principle of fair compensation for property to be purchased by the state; in deciding whether compensation for the existing real property not to be restituted in kind is fair, account should be taken, inter alia, not only of the actual market value of the property not to be restituted in kind but also of the value of that property at the time when it was unlawfully nationalised or otherwise unlawfully expropriated as well as of the changes in its quality and value; the location of the particular land implies the discretion of the legislature to lay down different methods for establishing the price of land.

  1. It has been mentioned that the provision of Item 4 (wording of 21 October 2002), whose compliance with the Constitution is investigated in the constitutional justice case at issue, provides that the value of a plot of land categorised as urban land used for other purposes, where such land is to be purchased by the state (by paying in either cash or securities), is calculated by multiplying the area of such a plot by the value of land as assessed at 6,000 litas per hectare.

It has also been mentioned that:

– calculated according to the aforesaid provision of the Methodology, the value of a plot of urban land used for other purposes, where such a plot of land is to be purchased by the state (by paying in either cash or securities), is corrected (by applying the relevant coefficients) by taking account of the following: in which of the indicated towns (Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė) a plot of land is located; and, where a plot of land is located in other towns, account is taken of the number of the residents of the town concerned, or, in appropriate cases—of the fact whether a plot of land is located in the centre of certain municipalities, as well as whether the territory where a plot of land is located was categorised as urban prior to 1 June 1995 or after 1 June 1995; calculated in the aforesaid manner, the value of a plot of urban land used for other purposes, where such a plot of land is to be purchased by the state (by paying in either cash or securities), is indexed;

– the Methodology (wording of 21 October 2002) establishes such values of coefficients for towns and such an index of the value of land as a result of the application of which the value of 1 hectare of urban land used for other purposes, may, after it is calculated according to Item 4.2 of the Methodology, increase to an amount that is from several to more than ten times higher than the amount of 6,000 litas.

Thus, Item 4.2 of the Methodology (wording of 21 October 2002) establishes the amount of the value of land categorised as urban land used for other purposes, where such land is to be purchased by the state (by paying in either cash or securities). The said amount is applicable to the whole urban territory, and, after this amount is applied to calculate the value of a plot of land categorised as urban land used for other purposes, where such a plot of land is to be purchased by the state (by paying in either cash or securities), the calculated value of the plot of land is corrected (by applying the relevant coefficients and index increasing the value of the plot from several to more than ten times) by taking into account the size of a town, the date when a particular plot of land was categorised as urban territory, and other factors that have influence on the value of land.

At the same time, it should be noted that, in its ruling of 18 June 1998, the Constitutional Court recognised that the Methodology for Establishing the Nominal Price of Land to Be Purchased by the State, as approved by the Government Resolution (No. 909) “On the Establishment and Procedure for the Application of the Nominal Price of State-Owned Land to Be Sold and Land to Be Purchased by the State” of 6 December 1993, was not in conflict with the Constitution (the latter methodology regulated the same relations as the Methodology, the compliance of whose provision with the Constitution and the Law is a matter of investigation in the constitutional justice case at issue). In the aforesaid ruling, the Constitutional Court held that the scope of the restoration of the rights of ownership, the nonexistence of any well-established market in land at the beginning of the restitution process, and the limited material and financial capacities of the state, had determined the fact that the state itself had established the price of land to be purchased by the state, as well as that, as there had been, due to various reasons, no possibility of valuing individually every plot of land to be purchased by the state, the Methodology for Establishing the Nominal Price of Land to Be Purchased by the State established the average price of land to be purchased by the state, which was applicable to the entire urban territory, provided account was taken of the significance and size of a particular town; the calculation of both the price of land to be sold by the state and the price of land to be purchased by the state is governed by the same principles. It should be noted that the aforementioned methodology established, for land other than that categorised as agricultural land and forestry land (i.e. for urban land used for other purposes), the same amount of value assessed at 6,000 litas per hectare, and it similarly provided for virtually the same criteria (as those established in the Methodology (wording of 21 October 2002)) that were taken into consideration in correcting (by applying the same coefficients) the said amount of 6,000 litas per hectare.

The Constitutional Court has held in its acts on more than one occasion that the principle of a state under the rule of law, which is consolidated in the Constitution, implies the continuity of jurisprudence (inter alia, the Constitutional Court’s rulings of 28 March 2006, 22 October 2007, and 9 November 2010); therefore, the Constitutional Court’s legal position, as set forth in its ruling of 18 June 1998, has the significance of a precedent.

  1. In the light of the foregoing arguments, the conclusion should be drawn that the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology was not in conflict with Paragraph 3 of Article 23 of the Constitution.
  2. It has been mentioned that, in the constitutional justice case at issue, the Constitutional Court is investigating whether the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology was not in conflict with, inter alia, Paragraph 2 of Article 16 of the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of 1 July 1997).

The doubts of the petitioner are substantiated by the fact that the value of land that is to be purchased by the state, once it is calculated according to the contested provision of the Methodology, does not correspond to the actual market value of such land; therefore, in the opinion of the petitioner, the said provision violates the principle of equivalence, which is consolidated in Paragraph 2 of Article 16 of the Law. According to the petitioner, the state, when purchasing dwelling houses or parts thereof or flats from citizens, compensates them fairly according to the respective market value and the Law on the Bases for the Valuation of Property and Business.

  1. It has been mentioned that Paragraph 2 of Article 16 of the Law (wording of 1 July 1997) prescribes: “When compensating citizens for real property not to be restituted in kind under this Law, the state shall follow the principle of equivalence between the property not to be restituted and the property to be transferred in compensation for the property to be purchased by the state.” The principle of equivalence, which is consolidated in Paragraph 2 of Article 16 of the Law (wording of 1 July 1997), must be observed in compensating citizens for any type of real property that is to be purchased by the state and to which the rights of ownership may be restored under this law. The concrete content of this principle is also disclosed in other provisions of the Law (wording of 1 July 1997), inter alia, Paragraph 3 of Article 16 thereof. When approving the Methodology, inter alia, the provision of Item 4 thereof, which is being investigated in the constitutional justice case at issue, the Government was obliged to observe, inter alia, Paragraphs 2 and 3 of Article 16 of the Law and take account of the overall legal regulation laid down in the Law.

It has also been mentioned that the provision “[i]n compensating for land located in urban territory, the state shall follow the provision that land categorised as urban upon the unlawful land nationalisation must be valued at the average market price of agricultural land in suburban territories, whilst the other land located in urban territories must be valued at the average compensation price as determined for a particular town by the Government” of Paragraph 3 (wording of 1 July 1997) of Article 16 of the Law (which, as mentioned before, constitutes one of the legal grounds for approving the Methodology, inter alia, Item 4 thereof) was recognised as not in conflict with the Constitution in the Constitutional Court’s ruling of 2 April 2001.

  1. It has been mentioned that, with a view to implementing, inter alia, the provision of Paragraph 3 (wording of 1 July 1997) of Article 16 of the Law, under which, in the cases where compensation for land categorised prior to the unlawful land nationalisation as urban is to be granted, the average compensation price determined for a particular town by the Government must be applied, the Government established in Item 4.2 (wording of 21 October 2002) of the Methodology that the value of urban land used for other purposes is 6,000 litas per hectare.

Calculated according to the aforesaid provision of Item 4 of the Methodology, the value of a plot of urban land used for other purposes, where such a plot of land is to be purchased by the state (by paying in either cash or securities), is corrected (by applying the relevant coefficients increasing the value of the plot) by taking account of the following: in which of the indicated towns (Vilnius, Kaunas, Klaipėda, Šiauliai, Panevėžys, Alytus, Marijampolė) a plot of land is located; and, where a plot of land is located in other towns, account is taken of the number of the residents of the town concerned, or, in appropriate cases—whether a plot of land is located in the centre of certain municipalities, as well as whether the territory where a plot of land is located was categorised as urban prior to 1 June 1995 or after 1 June 1995. It has been mentioned that, calculated in the aforesaid manner, the value of a plot of urban land used for other purposes, where such a plot of land is to be purchased by the state (by paying in either cash or securities), is indexed.

It has been mentioned that such a method of calculating the value of a plot of urban land used for other purposes, where such a plot of land is to be purchased by the state, according to which the value of a plot of urban land used for other purposes, where such a plot of land is to be purchased by the state, is calculated by multiplying the area of the plot by the price of land as fixed by the Government and then the so-calculated value of the plot is corrected (by applying the relevant coefficients) taking into consideration certain criteria, was also consolidated in the former methodologies, as approved by the relevant government resolutions, inter alia, in the Methodology for Establishing the Nominal Price of Land to Be Purchased by the State, as approved by the Government Resolution (No. 909) “On the Establishment and Procedure for the Application of the Nominal Price of State-Owned Land to Be Sold and Land to Be Purchased by the State” of 6 December 1993. It has been mentioned that, when investigating the compliance of the aforesaid former methodology with the Constitution in its ruling of 18 June 1998, the Constitutional Court held that the calculation of both the price of land to be sold by the state and the price of land to be purchased by the state was governed by the same principles.

In deciding whether compensation for the existing real property not to be restituted in kind is fair, account should be taken not only of the actual market value of the property not to be restituted in kind but also of the value of that property at the time when it was unlawfully nationalised or otherwise unlawfully expropriated as well as of the changes in its quality and value.

From the material available in the constitutional justice case at issue it is clear that, taking account of the proportions between the prices of land in urban and rural areas at the time of the unlawful land nationalisation, by means of the legal regulation consolidated in the Methodology (wording of 21 October 2002), under which the value of urban land used for other purposes—6,000 litas per hectare—is corrected by applying the relevant coefficients and index increasing the value of the said land from several to more than ten times, the Government linked the amount of the price of land located in urban territory, where such land is to be purchased by the state, to the average price of that land at the time of its unlawful nationalisation or unlawful expropriation by other means.

Consequently, the Government, by establishing, upon the commissioning by the legislature, in Item 4.2 (wording of 21 October 2002) of the Methodology, the amount of the value of urban land used for other purposes, applicable in the cases where such land is to be purchased by the state, as well as by establishing, in the relevant Items of the Methodology, the coefficients and index by means of which the said amount is corrected, did not deviate from the essence of the principle of equivalence, which is consolidated in Paragraphs 2 and 3 of Article 16 of the Law and other articles thereof.

Thus, there is no ground for stating that the provision of Item 4 (wording of 21 October 2002) of the Methodology, which prescribes that the value of a plot of land categorised as urban land used for other purposes, where such land is to be purchased by the state (by paying in either cash or securities), is calculated by multiplying the area of such a plot by the value of land as assessed at 6,000 litas per hectare, violated the principle of equivalence, which is consolidated in Paragraph 2 of Article 16 of the Law (wording of 1 July 1997).

  1. In the light of the foregoing arguments, the conclusion should be drawn that the provision “[t]he value of a plot of land or forest to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology was not in conflict with Paragraph 2 of Article 16 of the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of 1 July 1997).

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and 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:

To recognise that the provision “[t]he value of a plot of land or forest that is to be purchased by the state (by paying in either cash or securities) shall be calculated by multiplying the area of such a plot by the value of land as assessed at: <...> 4.2. 6,000 litas per hectare for urban land used for other purposes” of Item 4 (wording of 21 October 2002) of the Methodology for Establishing the Value and Equivalence of Land, Forests, and Water Bodies to Be Purchased by the State, as approved by Item 3 of the Resolution of the Government of the Republic of Lithuania (No. 205) “On the Procedure for the Valuation of Land” (wording of 21 October 2002; Official Gazette Valstybės žinios, 2002, No. 102-4574) of 24 February 1999, was not in conflict with the Constitution of the Republic of Lithuania and Paragraph 2 of Article 16 of the Republic of Lithuania’s Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of 1 July 1997).

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

Justices of the Constitutional Court:                                    Egidijus Bieliūnas

                                                                                                        Toma Birmontienė

                                                                                                        Pranas Kuconis

                                                                                                        Gediminas Mesonis

                                                                                                        Ramutė Ruškytė

                                                                                                        Egidijus Šileikis

                                                                                                        Algirdas Taminskas

                                                                                                        Romualdas Kęstutis Urbaitis

                                                                                                        Dainius Žalimas