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On compensation for urban land subject to purchase by the state

Case No. 5/2012

 THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

IN THE NAME OF THE REPUBLIC OF LITHUANIA

 RULING

ON THE COMPLIANCE OF PARAGRAPH 4 (WORDING OF 10 NOVEMBER 2011) OF ARTICLE 7 (WORDING OF 23 DECEMBER 2005) OF THE REPUBLIC OF LITHUANIA’S LAW ON THE AMOUNT, SOURCES, AND TERMS AND PROCEDURE FOR THE PAYMENT OF COMPENSATION FOR REAL PROPERTY TO BE PURCHASED BY THE STATE AND ON STATE GUARANTEES AND SPECIAL ADVANTAGES, AS PROVIDED FOR IN THE LAW ON THE RESTORATION OF THE RIGHTS OF OWNERSHIP OF CITIZENS TO THE EXISTING REAL PROPERTY (WORDING OF 14 OCTOBER 2003) WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 10 October 2013

Vilnius

 

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

The court reporter—Daiva Pitrėnaitė

Vytenis Povilas Andriukaitis, the member of the Seimas acting as the representative of a group of members of the Seimas of the Republic of Lithuania, the petitioner

Kazys Starkevičius, a member of the Seimas, and Gintarė Dešukaitė, an adviser at the Office of the Committee on Rural Affairs of the Office of the Seimas, both acting as the representatives of the Seimas of the Republic of Lithuania, the person 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 24 September 2013, at the Court’s public hearing, heard constitutional justice case No. 5/2012 subsequent to the petition (No. 1B-3/2012) of a group of members of the Seimas of the Republic of Lithuania requesting an investigation into whether Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Republic of Lithuania’s Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of 14 October 2003) is not in conflict with the constitutional principle of a state under the rule of law.

The Constitutional Court

has established:

I

The petition of the group of members of the Seimas, the petitioner, is substantiated by the following arguments.

The legal regulation consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (hereinafter referred to as the Law on Compensation for Real Property to Be Purchased by the State) (wording of 14 October 2003) does not make it clear when monetary compensation would be paid to citizens for the urban land categorised as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012. Since the legal regulation establishing the amounts and payment terms (payment periodicity) of monetary compensation (portions thereof payable periodically) to be granted for the individual objects (types thereof) of real property specified by law—regardless of whether this legal regulation is established by means of a law or a resolution of the Government of the Republic of Lithuania in accordance with the criteria consolidated in a law—must be such that would make it clear in what portions and when (how periodically) the said monetary compensation is to be paid to persons entitled to such compensation (the Constitutional Court’s ruling of 23 August 2005), the impugned legal regulation is in conflict with the constitutional principle of a state under the rule of law.

II

In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from Edmundas Pupinis, the then member of the Seimas acting as the former representative of the Seimas, the party concerned, in which it is maintained that the impugned legal regulation is not in conflict with the Constitution. The position of the representative of the party concerned is substantiated by the following arguments.After, on 16 June 1998, the Seimas adopted the Law on Compensation for Real Property to Be Purchased by the State, the Government was commissioned to establish the terms for the payment of compensation for the individual objects of real property (land, forest, water bodies, economic-commercial buildings and their appurtenances, dwelling houses and parts thereof, flats). The funds allocated for the payment of the said compensation had to be distributed by the Government or an institution authorised by it. The Law on Compensation for Real Property to Be Purchased by the State was subsequently amended on more than one occasion; however, the legal regulation in question, prescribing that the terms for the payment of compensation for real property to be purchased by the state must be established by the Government, has remained unchanged. Since the funds necessary for the payment of monetary compensation to citizens for the land categorised as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, are provided for in a respective Republic of Lithuania’s Law on the Approval of Financial Indicators for the State Budget and Municipal Budgets, which is approved annually, the statement of the petitioner that it is not clear when the monetary compensation in question would be paid is unfounded. When establishing the forms, conditions, and procedure for the restoration of the rights of ownership to the existing real property, the state may not assume any such financial and other obligations that would be unbearable for society and the state, would impose a disproportionally heavy financial or another burden on society, could cause social tension and conflict, and would preclude or hinder the state from ensuring other constitutional values and performing its functions prescribed under the Constitution. During the process of the restoration of the rights of ownership, a balance should be sought between the interests of the persons whose rights of ownership are to be restored and the interests of the entire society. Since the financial resources of the state are limited, the unconditional performance of the obligations assumed to a certain group of persons may harm the interests of the whole state and, at the same time, the interests of all its citizens. Thus, the Seimas adopted such amendments to the Law on Compensation for Real Property to Be Purchased by the State that, on the one hand, would provide for a fair compensation for citizens entitled to receive compensation for their real property to be purchased by the state and that, on the other hand, would ensure the interests of the entire society. The legislature has not changed the periodicity of the payment of monetary compensation in question and has not established any new conditions that would worsen the situation of those citizens to whom that monetary compensation is to be paid for the urban land categorised as urban territory prior to 1 June 1995, where such land would be purchased by the state and the decisions to restore the rights of ownership would be adopted after 31 January 2012.

III

In the course of the preparation of the case for judicial hearing, a letter was received from the National Land Service under the Ministry of Agriculture, which provides information related to the questions considered in the constitutional justice case at issue.

IV

1. At the Constitutional Court’s hearing, Vytenis Povilas Andriukaitis, the member of the Seimas acting as the representative of the group of the members of the Seimas, the petitioner, virtually reiterated the arguments set forth in the petition of the petitioner and answered the questions of the justices of the Constitutional Court.2. At the Constitutional Court’s hearing, Kazys Starkevičius, a member of the Seimas, and Gintarė Dešukaitė, an adviser at the Office of the Committee on Rural Affairs of the Office of the Seimas, both acting as the representatives of the Seimas, the party concerned, supported the position set forth in the explanations of the person concerned and answered the questions of the justices of the Constitutional Court.Kazys Starkevičius additionally pointed out that, by the Resolution (No. 131) “On the Amendment of the Resolution of the Government of the Republic of Lithuania (No. 730) ‘On the Formation of the Lists of Citizens to Be Compensated by Cash for the Land, Forest, and Water Bodies to Be Purchased by the State and Citizens to Be Compensated by Cash in the Cases Where They Refuse a New Plot of Land to Be Transferred into Their Ownership for No Consideration for Individual Urban Construction, as well as on the Description of the Procedure for Compensating These Persons’ of 27 June 2000”, which was adopted on 25 January 2012, the Government specified, in a more concrete manner, the procedure for the payment of monetary compensation for the land categorised as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012. The said resolution prescribes that, in the cases where decisions to restore the rights of ownership would be adopted after 31 January 2012, monetary compensation for the citizens concerned would start to be paid not earlier than the next calendar year following the adoption of the decision to restore the rights of ownership; until the full settlement amount is paid, compensation is to be paid in parts proportionate to the funds provided for that purpose in the Law on the Approval of Financial Indicators for the State Budget and Municipal Budgets, by taking account of an amount that remains to be paid to each citizen, and where the remaining due amount is less than LTL 1,000, that amount is paid in one sum. In the opinion of Kazys Starkevičius, in the aforesaid way, “the criteria have been set forth in a more concrete manner, and consideration was given to the then economic situation of our country as well as the consequences of the crisis”.

The Constitutional Court

holds that:

I

  1. The group of the members of the Seimas, the petitioner, requests an investigation into whether Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) is not in conflict with the constitutional principle of a state under the rule of law.

1.1. Paragraph 4 (wording of 10 November 2011) of Article 7 “Terms for the Payment of Compensation for Real Property to be Purchased by the State” (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) consolidated the legal regulation governing the payment of monetary compensation for the individual objects of real property (types thereof) in the cases where decisions to restore the rights of ownership would be adopted during the periods specified in this law, following the expiry of the terms established in Paragraph 2 of this article. Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the said law, inter alia, prescribed: “In the cases where decisions to restore the rights of ownership would be adopted after 31 January 2012, monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state, shall be paid to the citizens concerned in the manner provided for by the Government from the funds allocated for that purpose in the Law on the Approval of Financial Indicators for the State Budget and Municipal Budgets.”

1.2. It should be noted that, although, in the petition filed with the Constitutional Court by the petitioner, it is not indicated as to the compliance of which provisions of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) with the Constitution is doubtful, the arguments provided in the petition make it clear that the petitioner doubts as regards the constitutionality of the legal regulation in question insofar as it regulated the relations connected to the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012.

1.3. It should also be noted that the petitioner, while substantiating its doubts regarding the compliance of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) with the Constitution, maintains that the legal regulation at issue did not make it clear as to when monetary compensation would be paid to citizens for the urban land categorised as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, although the legal regulation establishing the amounts and payment terms (payment periodicity) of the granted monetary compensation (portions thereof payable periodically) for the individual objects (types thereof) of real property specified by law must be such that would make it clear in what portions and when (how periodically) the said monetary compensation is to be paid to persons entitled to such compensation.

From the arguments of the petitioner, it is clear that the petitioner impugns the legal regulation that governed the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, as consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), only from the aspect that this legal regulation, according to the petitioner, did not provide for any terms for the payment of the said monetary compensation.

1.4. Thus, the petition of the petitioner requesting an investigation into the compliance of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) with the Constitution should be treated as a petition for an investigation into the compliance of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the said law with the Constitution insofar as this paragraph did not establish any terms for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012.

  1. Consequently, in the constitutional justice case at issue subsequent to the petition of the petitioner, the Constitutional Court will investigate whether Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar as this paragraph did not provide for any terms for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, was not in conflict with the constitutional principle of a state under the rule of law.

II

  1. On 16 June 1998, the Seimas adopted the Republic of Lithuania’s Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, which was designed, inter alia, to regulate the amount, sources, and terms and procedure for the payment of compensation for real property to be purchased by the state, as provided for to the citizens of the Republic of Lithuania under the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (Article 1).
  2. On 14 October 2003, the Seimas adopted the Republic of Lithuania’s Law Amending the Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, which came into force on 31 October 2003. By Article 1 of the said law, the Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property was amended and set forth in its new wording, inter alia, by modifying the title of the law: since the entry into force of the law in its aforesaid wording, the law has been titled as the Law on the Amount, Sources, Terms and Procedure for the Payment of Compensation for Real Property to be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property.

2.1. The Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) was amended and supplemented on more than one occasion, inter alia, by the Republic of Lithuania’s Law Amending Article 7 of the Law on the Amount, Sources, Terms and Procedure for the Payment of Compensation for Real Property to be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, which was adopted by the Seimas on 10 November 2011 and came into force on 1 February 2012 (with a certain exception). Article 1 of the aforesaid law amended Paragraph 4 (wording of 19 January 2010) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003).

Paragraph 4 (wording of 10 November 2011) of Article 7 “Terms for the Payment of Compensation for Real Property to Be Purchased by the State” (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), to the extent investigated in the constitutional justice case at issue, inter alia, prescribed:

“In the cases where decisions to restore the rights of ownership were adopted during the period from 1 January 2009 until 31 December 2010, monetary compensation for the land, forest, and water bodies to be purchased by the state shall be paid to the citizens concerned in 2011; where the corresponding decisions would be adopted after 1 January 2011, the said monetary compensation shall be paid the next calendar year following the adoption of such a decision (with the exception of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012). In the cases where decisions to restore the rights of ownership would be adopted after 31 January 2012, monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state, shall be paid to the citizens concerned in the manner provided for by the Government from the funds allocated for that purpose in the Law on the Approval of Financial Indicators for the State Budget and Municipal Budgets. <...>”

Thus, Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), inter alia, consolidated the general legal regulation governing the payment of monetary compensation for the land, forest, and water bodies to be purchased by the state, where decisions to restore the rights of ownership would be adopted after 1 January 2011; under that legal regulation, the said monetary compensation was payable the next calendar year following the adoption of the decision to restore the rights of ownership.

Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the aforementioned law also established an exception to the aforesaid general legal regulation, which governed the payment of monetary compensation for land to be purchased by the state, inter alia, where decisions to restore the rights of ownership would be adopted after 1 January 2011, i.e. it did not apply to monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012; monetary compensation for the latter real property was to be paid in the manner provided for by the Government.

2.2. It should be noted that Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) did not consolidate any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012.

  1. The provisions of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) should be construed in the context of the other provisions laid down in the same law in relation to the terms for compensating for real property to be purchased by the state.

3.1. Paragraphs 1 and 2 of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), inter alia, prescribe:

“1. From the day of the adoption of the decision to restore the rights of ownership, monetary compensation for the individual objects of real property (land, forest, water bodies, <...>) to be purchased by the state shall be paid annually in equal parts, the amount of which shall be determined based on the terms, specified in Paragraph 2 of this Article, for the payment of the said compensation, by taking account of an amount that remains to be paid to each citizen.

  1. The said monetary compensation shall be paid to citizens in observance of the following terms:

1) for the land, forest, and water bodies to be purchased by the state—until 1 January 2009; <...>.”

Thus, Paragraph 1 of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) consolidated the legal regulation prescribing that monetary compensation for the real property, inter alia, land, to be purchased by the state had to be paid according to the terms specified in Paragraph 2 of the said article.

In the context of the constitutional justice case at issue, it should be noted that the legal regulation in question, among other things, set the final terms for the payment of monetary compensation for the real property, inter alia, land, to be purchased by the state.

3.2. While construing the provisions of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) that are relevant to the constitutional justice case at issue in the context of the legal regulation consolidated in Paragraphs 1 and 2 of the same article, it should be noted that the legal regulation laid down in the law in relation to monetary compensation for the real property, inter alia, land, to be purchased by the state, varies according to the time of the adoption of the particular decision to restore the rights of ownership: under the legal regulation consolidated in Paragraphs 1 and 2 of Article 7 (wording of 23 December 2005), monetary compensation for the real property to be purchased by the state had to be paid until the expiry of the final terms set in the law for the payment of the said monetary compensation (inter alia, monetary compensation for the land to be purchased by the state had to have been paid until 1 January 2009); Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) consolidated the legal regulation under which monetary compensation for the real property to be purchased by the state could also be paid upon the expiry of the terms set in Paragraph 2 of the said article; the legal regulation in question did not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012.

  1. To summarise the impugned legal regulation, as consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), from the aspect relevant to the constitutional justice case at issue, it needs to be held that neither Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) nor other provisions of this law provided for any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012.
  2. In the context of the constitutional justice case at issue, it should also be noted that, on 13 November 2012, the Seimas adopted the Republic of Lithuania’s Law Amending Articles 3, 5, 6, 7, and 8 of the Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, as well as Recognising Article 4 of That Law as No Longer Valid, which came into force on 24 November 2012.

Although Article 5 of the aforesaid law amended Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), the legal regulation consolidated therein in relation to the payment of compensation for real property has changed only insofar as it is related to compensation for dwelling houses (parts thereof) and flats to be purchased by the state.

Consequently, from the aspect from which the Constitutional Court is investigating in the constitutional justice case at issue the compliance of the legal regulation laid down in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) with the Constitution, the legal regulation governing the payment of compensation for real property to be purchased by the state has remained unchanged.

III

  1. In the constitutional justice case at issue, the Constitutional Court is investigating, to a certain extent, the compliance of the legal regulation related to the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, with the constitutional principle of a state under the rule of law.

1.1. In this context, it should be noted that, as held by the Constitutional Court on more than one occasion, the constitutional principle of a state under the rule of law is a universal principle; its content is apparent in various provisions of the Constitution; the essence of this principle is the rule of law; the constitutional principle of a state under the rule of law is especially capacious, and it comprises a wide range of various interrelated imperatives; this principle must be followed in the process of both making and implementing law.

1.2. The Constitutional Court has also held that legal certainty and legal clarity are the essential elements of the principle of a state under the rule of law, which is consolidated in the Constitution. The imperative of legal certainty and legal clarity implies that any legal regulation must meet certain additional obligatory requirements: it must be clear and harmonious, and legal norms must be formulated precisely and may not contain any ambiguities (inter alia, the Constitutional Court’s rulings of 24 December 2008 and 22 June 2009, its decision of 20 April 2010, and its rulings of 13 May 2010 and 20 February 2013).

1.3. In the acts of the Constitutional Court, it has also been held on more than one occasion that the protection of legitimate expectations, legal certainty, and legal security are the inseparable elements of the constitutional principle of a state under the rule of law; these constitutional principles imply the obligation of the state to ensure the certainty and stability of any legal regulation, to protect the rights of persons, to respect legitimate interests and legitimate expectations, as well as to fulfil the obligations undertaken to a person; if the protection of legitimate expectations, legal certainty, and legal security were not ensured, the trust of a person in the state and law would not be secured (inter alia, the Constitutional Court’s rulings of 4 March 2003 and 15 February 2013).

  1. In the context of the constitutional justice case at issue, in assessing the compliance of the impugned legal regulation related to the payment of compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, with the Constitution, consideration should be given to, inter alia, the provisions of the official constitutional doctrine regarding the restoration of the rights of ownership to the existing real property.

2.1. The Constitutional Court has held that, when regulating the restoration of the denied rights of ownership, the legislature enjoys the discretion to establish the conditions and procedure for the restoration of the rights of ownership (the Constitutional Court’s rulings of 4 March 2003, 22 December 2010, 19 June 2012, and 30 May 2013).

When establishing, by law, the forms, conditions, and procedure of the restoration of the rights of ownership to the existing real property, the legislature is bound by the norms and principles of the Constitution, inter alia, by the constitutional principle of a state under the rule of law, which comprises legal clarity, legal certainty, legal security, the protection of legitimate expectations, and other requirements; the legislature is also bound by other norms and principles of the Constitution (the Constitutional Court’s rulings of 22 December 2010 and 30 May 2013).

2.2. The following provisions of the official constitutional doctrine of restitution—the restoration of the rights of ownership—should also be mention in relation to the protection of the rights of ownership:

– where the rights of ownership are restored on the grounds of law, the norms of Article 23 of the Constitution apply to the defence of these rights to a full extent; after the decision to restore the rights of ownership to a person is adopted by an institution authorised by the state, the person acquires the rights of ownership, which are protected and defended by Article 23 of the Constitution;

– the provisions of Article 23 of the Constitution are related to various other provisions of the Constitution, inter alia, to the provision of Paragraph 2 of Article 128 of the Constitution, which provides that the procedure for the possession, use, and disposal of state property is established by law, as well as to the constitutional principles of the separation of powers and a state under the rule of law (the Constitutional Court’s ruling of 23 August 2005).

2.3. In this context, it should be noted that, in its ruling of 23 August 2005, the Constitutional Court, inter alia, held that Paragraph 2 of Article 128 and Paragraphs 1 and 2 of Article 23 of the Constitution, as construed in conjunction with the constitutional principle of the separation of powers as well as with the constitutional principle of a state under the rule of law, comprising, inter alia, the requirements of legal certainty, legal security, and the protection of legitimate expectations, give rise to the stipulation that the principal elements of legal relations in granting and paying monetary compensation must be established by law.

While developing the aforesaid doctrinal provision, in its ruling of 23 August 2005, the Constitutional Court also held that:

– the terms until the expiry of which the payment of monetary compensation for the individual objects (types thereof) of real property specified by law must be completed may be established only by law; the legal regulation established by law must make it clear what the final terms are for the payment of monetary compensation;

when establishing, by law, the amounts of monetary compensation for the individual objects (types thereof) of real property specified by law, as well as the amounts of the portions of the allocated monetary compensation (where monetary compensation is to be paid in portions periodically) for the individual objects (types thereof) of real property specified by law and their payment terms (payment periodicity), the legislature enjoys certain discretion: the legislature may itself, by means of a law, establish the amounts of monetary compensation for the individual objects (types thereof) of real property specified by law, as well as the amounts of the portions of the allocated monetary compensation (where monetary compensation is to be paid in portions periodically) for the individual objects (types thereof) of real property specified by law and the terms for the payment (payment periodicity) of these portions; however, the legislature may opt for other means and consolidate, in a law, certain clear criteria based on which the amounts of monetary compensation for the individual objects (types thereof) of real property specified by law, as well as the amounts of the portions of the allocated monetary compensation (where monetary compensation is to be paid in portions periodically) for the individual objects (types thereof) of real property specified by law and the terms for the payment (payment periodicity) of these portions, could be established by the Government.

It should be pointed out that the necessity to establish, in a clear manner, in what portions and when (how periodically) the allocated monetary compensation must be paid to persons entitled to that monetary compensation is the legal guarantee ensuring that the state will fulfil its undertaken obligations within the terms established by law as well as that the constitutional rights of ownership of a person will not be violated.

2.4. In the context of the constitutional justice case at issue, it should be noted that, in its ruling of 23 August 2005, the Constitutional Court, among other things, also held the following:

– the fact that the state has resolved that the denied rights of ownership must be restored, also the fact that the law regulating the relations of restitution has been adopted and that the restoration of the rights of ownership started to be implemented, means that the state has undertaken the obligation to restore the rights of ownership by the means, under the conditions and procedure, and within the terms as provided for by law; at the same time, the duty has arisen for the state (its institutions) to allocate the necessary funds and other financial and material resources for the restoration of the rights of ownership (inter alia, for the payment of monetary compensation for real property to be purchased by the state);

– in general, the Constitution does not preclude the legislature, where necessary, from extending the terms until the expiry of which the payment of particular monetary compensation must be completed as well as from changing the previously established periodicity of the payment of such monetary compensation, inter alia, from establishing a certain legal regulation that would be less favourable to the persons entitled to receive such monetary compensation; however, the legislature is permitted to establish the aforesaid legal regulation, which would be less favourable to the persons entitled to receive particular monetary compensation, only in exceptional cases, where doing so is constitutionally justified;

– such a case, which would be constitutionally justifiable, could occur where, due to special circumstances, a particularly difficult economic and financial situation in the state would emerge in which, if the legislature did not extend the previous terms, established by law, until the expiry of which the payment of particular monetary compensation must be completed, and/or if the legislature did not change the previously established periodicity of the payment of particular monetary compensation into the one less favourable to the persons entitled to receive that monetary compensation, the values protected under the Constitution would be damaged to an extent greater than that that could occur if the said terms, until the expiry of which the payment of particular monetary compensation must be completed, were not extended, and/or the previously established periodicity of the payment of particular monetary compensation were not changed into one less favourable to the persons entitled to receive that monetary compensation;

– when, due to certain objective reasons, extending the previously established terms until the expiry of which the payment of particular monetary compensation must be completed and/or changing the previously established periodicity of the payment of particular monetary compensation, the legislature must pay heed to the constitutional requirements of legal clarity, legal certainty, legal security, and the protection of legitimate expectations, which imply the duty of the legislature, in the cases at issue, to establish, by means of a law, such a legal regulation that would make it clear until when the payment of particular monetary compensation is to be completed, as well as in what portions and when such compensation is to be paid to the persons entitled to receive it;

– the constitutional requirements of legal clarity, legal certainty, and the protection of legitimate expectations also imply that the terms until the expiry of which the payment of particular monetary compensation must be completed may not be unreasonably long, nor may they be extended for an unreasonably long time period, since the unreasonably long terms of the restoration of the rights of ownership to the existing real property, especially in the event of their unreasonable extension (inter alia, repeated extension), can distort the institute of the restoration of the rights of ownership to the existing real property, violate the constitutional rights of ownership as well as other rights of a person, and shatter the confidence of people in the state and law.

  1. In the context of the constitutional justice case at issue, it should be noted that, under the Constitution, inter alia, Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 thereof, and the constitutional principle of a state under the rule of law, in order to implement its discretion to establish the conditions and procedure for the restoration of the rights of ownership and to avoid violating the constitutional rights of ownership of a person and to ensure the confidence of a person in the state and law, the legislature is obliged, when consolidating the legal regulation governing the payment of monetary compensation for the individual objects (types thereof) of real property, to establish, in a law, inter alia, the final terms for the payment of monetary compensation for the individual objects (types thereof) of real property specified by law.

It should also be noted that the legislature must establish the said terms by paying regard to the norms and principles of the Constitution, inter alia, the constitutional imperatives of a state under the rule of law, justice, and reasonableness, as well as by taking account of the financial and material possibilities of the state, inter alia, the possibilities of the state to fulfil its undertaken obligations in a particularly difficult economic and financial situation.

  1. It should also be mentioned that, in the doctrine of the Constitutional Court, it has been held on more than one occasion that, in the cases where the Constitutional Court is investigating, subsequent to the petition of the petitioner, whether the impugned legal act (part thereof) is not in conflict with the articles (parts thereof) of the Constitution indicated by the petitioner, the Constitutional Court is at the same time investigating whether that particular legal act (part thereof) is not in conflict with the Constitution—a unified and harmonious system (the Constitutional Court’s rulings of 24 December 2002 and 30 May 2003).

The Constitutional Court has also held that particular norms set forth in the articles (parts thereof) of the Constitution indicated by the petitioner may not be interpreted separately from other norms of the Constitution, as well as that the Constitutional Court, having found that the impugned legal act (part thereof) is in conflict with the articles (parts thereof) of the Constitution not indicated by the petitioner, has the powers to state this fact (the Constitutional Court’s rulings of 13 June 2000 and 30 May 2003).

IV

On the compliance of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on the Amounts, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording of  14 October 2003) with the constitutional principle of a state under the rule of law.

  1. It has been mentioned that, in the constitutional justice case at issue, subsequent to the petition of the petitioner, the Constitutional Court is investigating the compliance of Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar it did not provide for any terms for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, with the constitutional principle of a state under the rule of law.
  2. It has been mentioned that Paragraph 4 (wording of 10 November 2011) of Article 7 “Terms for the Payment of Compensation for Real Property to Be Purchased by the State” (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), inter alia, prescribed: “In the cases where decisions to restore the rights of ownership would be adopted after 31 January 2012, monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state, shall be paid to the citizens concerned in the manner provided for by the Government from the funds allocated for that purpose in the Law on the Approval of Financial Indicators for the State Budget and Municipal Budgets.”
  3. In the opinion of the petitioner, the legal regulation consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) did not make it clear when monetary compensation would be paid to citizens for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012. As a result of this, according to the petitioner, the impugned legal regulation is in conflict with the constitutional principle of a state under the rule of law.
  4. In deciding, to the specified extent, regarding the compliance of the legal regulation consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) with the Constitution, it should be noted that, as mentioned before, under the Constitution, inter alia, Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 thereof, and the constitutional principle of a state under the rule of law, in order to implement its discretion to establish the conditions and procedure for the restoration of the rights of ownership and to avoid violating the constitutional rights of ownership of a person and to ensure the confidence of a person in the state and law, the legislature is obliged, where it consolidates the legal regulation governing the payment of monetary compensation for the individual objects (types thereof) of real property, to establish, in a law, inter alia, the final terms for the payment of monetary compensation for the individual objects (types thereof) of real property specified by law.

4.1. It has been mentioned that neither Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) nor other provisions of the same law provided for any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012.

4.2. Thus, the legislature, seeking to regulate the relations of the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, consolidated such a legal regulation that failed to establish one of the most important elements related to the said monetary compensation, i.e., the final term for the payment of such compensation.

In this way, the legislature did not comply with the requirement, which stems from the Constitution, inter alia, Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 thereof, and the constitutional principle of a state under the rule of law, that the final term for the payment of the monetary compensation in question, as one of the most important elements related to such compensation, must be established in a law.

Consequently, the legal regulation governing the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, as consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar as it did not establish any final term for the payment of the said monetary compensation, was incompatible with Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution and the constitutional principle of a state under the rule of law.

4.3. In view of the foregoing arguments, the conclusion should be drawn that Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar as it did not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, was in conflict with Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution and the constitutional principle of a state under the rule of law.

4.4. In the context of the constitutional justice case at issue, it should be noted that, though obliged, under the Constitution, to establish, in a law, inter alia, one of the most important elements related to monetary compensation for the individual objects (types thereof) of real property specified by law, i.e. the terms until the expiry of which the payment of the said monetary compensation must be completed, the legislature failed to establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, and thus violated the essential requirements stemming from the Constitution; therefore, the compatibility of the impugned legal regulation with the existing constitutional requirements may not be assessed from any other aspects in addition to that mentioned before.

Thus, having found that the legal regulation governing the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, as consolidated in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), to the specified extent, was in conflict with the Constitution, the Constitutional Court will not further investigate the compliance of the legal regulation at issue with the Constitution from any other aspects.

  1. As mentioned before, on 13 November 2012, the Seimas adopted the Law Amending Articles 3, 5, 6, 7, and 8 of the Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on the State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property, as well as Recognising Article 4 of That Law as No Longer Valid, which came into force on 24 November 2012.

5.1. It has been mentioned that, although Article 5 of the latter law amended Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), the legal regulation consolidated therein in relation to the payment of compensation for real property has changed only insofar as it is related to compensation for dwelling houses (parts thereof) and flats to be purchased by the state; as regards the aspect from which the Constitutional Court is investigating in the constitutional justice case at issue the compliance of the legal regulation laid down in Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003) with the Constitution, the legal regulation governing the payment of compensation for real property to be purchased by the state has remained unchanged.

5.2. It has been held in this Constitutional Court’s ruling that Paragraph 4 (wording of 10 November 2011) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar as it did not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, was in conflict with Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution and the constitutional principle of a state under the rule of law.

Having held the foregoing, the Constitutional Court should also hold that Paragraph 4 (wording of 13 November 2012) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar as it does not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, is not in line with the requirements stemming from Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution and the constitutional principle of a state under the rule of law.

5.3. In view of the foregoing arguments, the conclusion should be drawn that Paragraph 4 (wording of 13 November 2012) of Article 7 (wording of 23 December 2005) of the Law on Compensation for Real Property to Be Purchased by the State (wording of 14 October 2003), insofar as it does not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, is in conflict with Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution and the constitutional principle of a state under the rule of law.

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:

  1. To recognise that Paragraph 4 (wording of 10 November 2011; Official Gazette Valstybės žinios, 2011, No. 143-6707) of Article 7 (wording of 23 December 2005) of the Republic of Lithuania’s Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording 14 October 2003), insofar as it did not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, was in conflict with Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law.
  2. To recognise that Paragraph 4 (wording of 13 November 2012; Official Gazette Valstybės žinios, 2012, No. 136-6963) of Article 7 (wording of 23 December 2005) of the Republic of Lithuania’s Law on the Amount, Sources, and Terms and Procedure for the Payment of Compensation for Real Property to Be Purchased by the State and on State Guarantees and Special Advantages, as Provided for in the Law on the Restoration of the Rights of Ownership of Citizens to the Existing Real Property (wording 14 October 2003), insofar as it does not establish any final term for the payment of monetary compensation for the land categorised, in the prescribed manner, as urban territory prior to 1 June 1995, where such land would be purchased by the state and decisions to restore the rights of ownership would be adopted after 31 January 2012, is in conflict with Paragraphs 1 and 2 of Article 23 and Paragraph 2 of Article 128 of the Constitution of the Republic of Lithuania and the constitutional principle of a state under the rule of law.

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

Justices of the Constitutional Court:                                    Pranas Kuconis

                                                                                                        Gediminas Mesonis

                                                                                                        Ramutė Ruškytė

                                                                                                        Egidijus Šileikis

                                                                                                        Algirdas Taminskas

                                                                                                        Romualdas Kęstutis Urbaitis

                                                                                                        Dainius Žalimas