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On returning a petition to the petitioner

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 DECISION

ON THE PETITION OF THE COURT OF APPEAL OF LITHUANIA, THE PETITIONER, REQUESTING AN INVESTIGATION INTO WHETHER PARAGRAPH 2 OF ARTICLE 5 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE LIQUEFIED NATURAL GAS TERMINAL WAS NOT IN CONFLICT WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

 5 September 2014, No. KT41-S30/2014
Vilnius

 The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Elvyra Baltutytė, Vytautas Greičius, Danutė Jočienė, Pranas Kuconis, Gediminas Mesonis, Vytas Milius, Egidijus Šileikis, Algirdas Taminskas, and Dainius Žalimas

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, in its procedural sitting, considered the petition (No. 1B-48/2014) of the Court of Appeal of Lithuania, the petitioner.

The Constitutional Court

has established:

The Constitutional Court has received the petition of the Court of Appeal of Lithuania, the petitioner, “requesting an investigation into whether:

1) by consolidating a compulsory payment without establishing all its essential elements, the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal (wording of XI-2053, Official Gazette Valstybės žinios, 19/6/2012, No. 68-3466) is not in conflict with the constitutional principle of a state under the rule of law, the constitutional principle of the separation of powers, Item 15 of Article 67 of the Constitution, and Paragraphs 2 and 3 of Article 127 of the Constitution;

2) the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal (wording of XI-2053, Official Gazette Valstybės žinios, 19/6/2012, No. 68-3466) and on the basis of which a duty is imposed on non-state-owned entities to use their property in order to perform state functions is not in conflict with Articles 23, 29, and 46 of the Constitution.”

The Constitutional Court

holds that:

  1. The Court of Appeal of Lithuania, the petitioner, requests an investigation into the compliance of Paragraph 2 of Article 5 of the Republic of Lithuania’s Law on the Liquefied Natural Gas Terminal with Articles 23, 29, and 46, Item 15 of Article 67, and Paragraphs 2 and 3 of Article 127 of the Constitution of the Republic of Lithuania as well as the constitutional principles of the separation of powers and a state under the rule of law.
  2. On 12 June 2012, the Seimas adopted the Law on the Liquefied Natural Gas Terminal. Paragraph 2 (wording of 12 June 2012) of Article 5 of the said law prescribed: “Installation and operating costs (or part thereof) of the LNG terminal, its infrastructure and connection may be included in the price for the natural gas transmission service under the procedure and conditions established by the National Commission for Energy Control and Prices (hereinafter referred to as the Commission), by following the requirements for regulating energy prices as established in the Law on Energy, the Law on Natural Gas and other legal acts. The costs made up of the price for the natural gas transmission service and revenues shall be administered and compensated to the LNG terminal operator by the natural gas transmission system operator (hereinafter referred to as the transmission system operator) under the procedure established by the Commission.”

Paragraph 2 (wording of 12 June 2012) of Article 5 of the Law on the Liquefied Natural Gas Terminal was amended when, on 27 June 2013, the Seimas adopted the Republic of Lithuania’s Law Amending Articles 5, 10, and 11 of the Law on the Liquefied Natural Gas Terminal. The petitioner impugns Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal set forth in its wording of 12 June 2012.

  1. Under Item 5 of Paragraph 2 of Article 67 of the Law on the Constitutional Court, a ruling of a court, by means of which an application is made to the Constitutional Court, must specify the legal arguments presenting the court’s opinion on the conflict of a law with the Constitution.

The Constitutional Court has held on more than one occasion that courts, when applying to the Constitutional Court with a petition requesting an investigation into whether a law or another legal act (part thereof) is not in conflict with the Constitution and presenting their arguments concerning their opinion (which is expressed in their petition) on the conflict of the law or another legal act (part thereof) with the Constitution, may not limit themselves only to general reasoning or statements and also to the fact that the law or another legal act (part thereof) is, in their opinion, in conflict with the Constitution, but must clearly indicate which impugned articles (paragraphs, items thereof) of legal acts and to what extent are, in their opinion, in conflict with the Constitution, and substantiate their position on the compliance of every impugned provision of the legal act (part thereof) with the Constitution by clearly formulated legal arguments (inter alia, the Constitutional Court’s ruling of 12 December 2005, its decisions of 14 October 2008, 10 November 2011, and 2 September 2014).

Otherwise, the petition of a court requesting an investigation into the compliance of a law or another legal act (part thereof) with the Constitution should be considered not to comply with the requirements of Article 67 of the Law on the Constitutional Court (inter alia, the Constitutional Court’s rulings of 12 December 2005 and 16 January 2006, and its decisions of 5 July 2007, 14 October 2008, and 16 November 2010).

It should be noted that, if a petition requesting an investigation into the compliance of a legal act (part thereof) with the Constitution in view of the content of norms and/or the scope of regulation indicates neither any concrete articles (parts thereof) or items of the legal act, the compliance of which with the Constitution is doubted by the petitioner, nor any concrete provisions—norms and/or principles—of the Constitution, with which, in the opinion of the petitioner, the concretely indicated articles (parts thereof) or items of the impugned legal act are in conflict in view of the content of norms and/or the scope of regulation, nor the legal reasoning grounding the doubt of the petitioner concerning each concretely indicated article (part thereof) or item of the impugned legal act (part thereof), the compliance of which with the concretely indicated provisions of the Constitution in view of the content of norms and/or the scope of regulation is doubted by the petitioner, and if such a petition were accepted at the Constitutional Court and a case were commenced subsequent to it, one would also restrict the rights of the party concerned, the state institution that has passed the impugned legal act, since it would be more difficult for the party concerned to present explanations concerning the arguments of the petitioner and to prepare for judicial consideration (inter alia, the Constitutional Court’s decisions of 16 April 2004, 19 March 2010, 12 December 2012, 8 January 2013, and 28 August 2014).

  1. The petitioner requests an investigation into whether “by consolidating a compulsory payment without establishing all its essential elements, the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal <...> is not in conflict with the constitutional principle of a state under the rule of law, the constitutional principle of the separation of powers, Item 15 of Article 67 of the Constitution, and Paragraphs 2 and 3 of Article 127 of the Constitution”.

4.1. According to the petitioner, the aforesaid articles of the Constitution and the constitutional principles are violated since, under the impugned norm, the National Commission for Energy Control and Prices is allowed to include, under the procedure and conditions established by it, the installation and operating costs (or part thereof) of the liquefied natural gas terminal, its infrastructure and connection (the so-called LNG Supplement) in the price for the natural gas transmission service. According to the petitioner, the so-called LNG Supplement is a tax (a compulsory payment) levied by the state, therefore, its essential elements may be established only by law. According to the petitioner, Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal provides neither specific payers of the LNG Supplement nor the size of the said supplement nor its other essential conditions.

Thus, the petitioner’s doubts about the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Item 15 of Article 67 and Paragraphs 2 and 3 of Article 127 of the Constitution as well as the constitutional principles of the separation of powers and a state under the rule of law are virtually substantiated by a general statement that the so-called LNG Supplement which is established by the said legal regulation is a tax (a compulsory payment), the essential elements of which must be established in a law rather than in substatutory legal acts.

4.2. It should be noted that although the petitioner maintains that the so-called LNG Supplement is a tax, the essential elements of which must be established in a law, it, in its petition, does not discuss the features characteristic of taxes and limits itself only to a general statement that the LNG Supplement is a tax.

It should be noted that, in construing the features characteristic of taxes and other compulsory payments, the Constitutional Court has held that taxes and other compulsory payments are compulsory and gratuitous payments of an appropriate size which are established by law and made by legal and natural persons to the state (municipal) budget in due time (the Constitutional Court’s ruling of 24 January 2006); within the meaning of Item 15 of Article 67 of the Constitution, state taxes are characterised by compulsory and gratuitous nature as well as one-sidedness (the Constitutional Court’s ruling of 12 February 2010); taxes are paid providing there exists a permanent taxable object (the Constitutional Court’s ruling of 15 March 1996); state taxes and other compulsory payments are a pecuniary obligation of legal subjects to the state (the Constitutional Court’s ruling of 3 June 2002); taxes are characterised by the fact that they are paid regularly at specified intervals and they are not of directly repayable nature, i.e., after they are paid to the state institution which accepts the said tax, the aforementioned institution is under no obligation to perform any actions or render any particular service for the taxpayer (the Constitutional Court’s ruling of 15 March 1996).

In its petition, the petitioner fails to indicate and analyse the features characteristic of the taxes and other compulsory payments disclosed in this official constitutional doctrine and fails to assess whether the LNG Supplement complies with those features. A general statement of the petitioner that the so-called LNG Supplement is not remuneration for the natural gas transmission service rendered does not, as such, indicate that the LNG Supplement is a tax or another compulsory payment within the meaning of Item 15 of Article 67 and Paragraph 2 of Article 127 of the Constitution.

4.3. Although the petitioner maintains that, in its decision No. SA.36740 of 20 November 2013, the European Commission has also held that the LNG Supplement is a tax rather than remuneration for the services rendered, the petitioner, in its petition, fails to analyse the content of the said document of the European Commission and indicate any arguments of the European Commission which would suggest that the LNG Supplement is a tax.

4.4. Thus, it should be held that the petitioner does not present any legal arguments to substantiate its position on the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Item 15 of Article 67 and Paragraphs 2 and 3 of Article 127 of the Constitution as well as the constitutional principles of the separation of powers and a state under the rule of law.

  1. The petitioner also requests an investigation into whether “the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal <...> and on the basis of which a duty is imposed on non-state-owned entities to use their property in order to perform state functions is not in conflict with Articles 23, 29, and 46 of the Constitution”.

5.1. When impugning the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 23 of the Constitution, the petitioner maintains that the impugned “legal regulation imposes a duty on non-state-owned entities to use their property in order to perform the state functions that must be financed from state funds”.

Although the petitioner does not indicate any particular “state functions that must be financed from state funds” for the performance of which the duty is imposed to use one’s own property, the whole content of its petition suggests that the petitioner classifies the installation and operation of the LNG terminal, its infrastructure and connection as state functions, the performance of which must be financed from state funds. Thus, on the one hand, the petitioner maintains that the installation and operation of the LNG terminal, its infrastructure and connection is a state function, the performance of which must be financed from state funds, and, on the other hand, it believes that the so-called LNG Supplement, which, in the opinion of the petitioner, is used to perform the state function specified by it, is a tax, however, it does not explain why the performance of the state function specified by it may not be financed from the LNG Supplement, which, in the opinion of the petitioner, is a tax.

In this context, it should be noted that the Constitutional Court has held that the establishment of taxes is aimed at receiving revenue to perform the functions of the state (municipality) and meet the public needs of both society and the state (the Constitutional Court’s rulings of 17 November 2003 and 5 July 2013); when taxes are not paid or are overdue, the state (municipal) budget does not receive part of its revenue, and the possibilities for the state (municipality) to perform the functions established to it are limited (the Constitutional Court’s rulings of 10 July 1997, 17 November 2003, and 5 July 2013).

It has been mentioned that the petitioner maintains that the impugned legal regulation imposes a duty on non-state-owned entities to use their property in order to perform the state function specified by the petitioner. The petitioner does not explain why the duty to use their property in the public interest may not be imposed on the aforesaid entities. In this context, it should be noted that the Constitutional Court has held on more than one occasion that ownership also performs a social function and that it includes obligations (inter alia, the Constitutional Court’s rulings of 14 March 2006 and 20 May 2008); the inviolability of property and the protection of subjective rights of ownership which are both entrenched in the Constitution cannot be interpreted as grounds for opposing the rights and interests of the owner against the public interest (inter alia, the Constitutional Court’s rulings of 13 May 2005 and 20 May 2008).

Thus, the aforesaid statements of the petitioner do not substantiate its doubts about the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 23 of the Constitution.

5.2. The petitioner also maintains that “when there is no statutory basis for regulating the supplement to the LNGT as a tax, the legal regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal consolidates a legal mechanism which limits, through the supplement to the LNGT, the property of the users of the natural gas transmission service”.

Thus, the petitioner’s doubts about the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 23 of the Constitution are also substantiated by the fact that the so-called LNG Supplement is a tax, the essential elements of which must be established in a law, and failure to establish them in a law “limits the property of the users of the natural gas transmission service”, i.e. the said doubts of the petitioner are related to its doubts about the compliance of the impugned norm with Item 15 of Article 67 and Paragraphs 2 and 3 of Article 127 of the Constitution as well as the constitutional principles of the separation of powers and a state under the rule of law.

It has been mentioned that the petitioner has not presented any legal arguments to substantiate its position on the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Item 15 of Article 67 and Paragraphs 2 and 3 of Article 127 of the Constitution as well as the constitutional principles of the separation of powers and a state under the rule of law. Alongside, it needs to be noted that neither does the petitioner explain how and why “the property of the [particular] users of the natural gas transmission service” is limited.

In this context, it should be noted that the Constitutional Court has held that limitations on the rights of ownership may be determined by an interest which is important for society (the Constitutional Court’s ruling of 6 May 1997), the right of ownership may be limited by law due to a constitutionally justifiable need which is essential for society (the Constitutional Court’s ruling of 14 March 2006).

Thus, it should be held that the aforesaid statement of the petitioner does not substantiate the petitioner’s doubts about the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 23 of the Constitution.

5.3. When impugning the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 46 of the Constitution, the petitioner maintains that under the said norm of the law the establishment of the LNG Supplement gives rise to the exceptional conditions for the development of the project of the LNG terminal SC “Klaipėdos Nafta” and thereby limits the competition opportunities of other market participants. It should be noted that the said statement of the petitioner is not related to the petition requesting an investigation into the compliance of the impugned norm with Article 46 of the Constitution; the petition is formulated in the operative part of the ruling by means of which the petitioner has applied to the Constitutional Court. As mentioned before, in the operative part of its ruling, the petitioner requests an investigation into whether “the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal <...> and on the basis of which a duty is imposed on non-state-owned entities to use their property in order to perform state functions” is not in conflict with Article 46 of the Constitution. It has been mentioned that the petitioner does not explain why the performance of the state function specified by the petitioner may not be financed from the LNG Supplement which, according to the petitioner itself, is a tax.

Thus, the petitioner does not present any legal arguments to substantiate its doubts about the compliance of Paragraph 2 (to the specified extent) of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 46 of the Constitution.

5.4. When impugning the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Article 29 of the Constitution, the petitioner presents only a general statement that the impugned regulation limits the right of ownership and violates the freedom of economic activity and fair competition, therefore, in the opinion of the petitioner, the said regulation is in conflict with Article 29 of the Constitution. Thus, the petitioner does not substantiate its position on the compliance of the impugned legal regulation with Article 29 of the Constitution, either.

5.5. When impugning the compliance of Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal with Articles 23, 29, and 46 of the Constitution, the petitioner also maintains that “the said supplement to the LNGT is collected at the expense of other market participants which would not necessarily use the LNG terminal and without establishing any remuneration to them, whilst persons which are not currently the buyers of the natural gas transmission service and which, accordingly, would not contribute to the construction of the LNGT will be able to use the LNGT in the future”, however, the petition of the petitioner does not make it clear how Articles 23, 29, and 46 of the Constitution would be specifically violated in this hypothetical situation specified by the petitioner.

  1. In the light of the foregoing arguments, it should be held that the petition of the Court of Appeal of Lithuania, the petitioner, requesting an investigation into whether Paragraph 2 (wording of 12 June 2012) of Article 5 of the Law on the Liquefied Natural Gas Terminal was not in conflict with Articles 23, 29, and 46, Item 15 of Article 67, and Paragraphs 2 and 3 of Article 127 of the Constitution as well as the constitutional principles of the separation of powers and a state under the rule of law, does not comply with the requirement established in Item 5 of Paragraph 2 of Article 67 of the Law on the Constitutional Court.

Under Article 70 of the Law on the Constitutional Court, in the case that a petition (part thereof) fails to comply with the requirements set forth in Article 67 of the Law on the Constitutional Court, the petition is returned to the petitioner.

  1. In view of this fact, the conclusion should be drawn that there are grounds to return the petition to the Court of Appeal of Lithuania, the petitioner, requesting an investigation into whether Paragraph 2 (wording of 12 June 2012) of Article 5 of the Law on the Liquefied Natural Gas Terminal was not in conflict with Articles 23, 29, and 46, Item 15 of Article 67, and Paragraphs 2 and 3 of Article 127 of the Constitution as well as the constitutional principles of the separation of powers and a state under the rule of law.

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

decision:

To return the petition to the Court of Appeal of Lithuania, the petitioner, “requesting an investigation into whether:

1) by consolidating a compulsory payment without establishing all its essential elements, the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal (wording of XI-2053, Official Gazette Valstybės žinios, 19/6/2012, No. 68-3466) is not in conflict with the constitutional principle of a state under the rule of law, the constitutional principle of the separation of powers, Item 15 of Article 67 of the Constitution, and Paragraphs 2 and 3 of Article 127 of the Constitution;

2) the regulation which is established in Paragraph 2 of Article 5 of the Law on the Liquefied Natural Gas Terminal (wording of XI-2053, Official Gazette Valstybės žinios, 19/6/2012, No. 68-3466) and on the basis of which a duty is imposed on non-state-owned entities to use their property in order to perform state functions is not in conflict with Articles 23, 29, and 46 of the Constitution.”

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

Justices of the Constitutional Court:                         Elvyra Baltutytė
                                                                                             Vytautas Greičius
                                                                                             Danutė Jočienė
                                                                                             Pranas Kuconis
                                                                                             Gediminas Mesonis
                                                                                             Vytas Milius
                                                                                             Egidijus Šileikis
                                                                                             Algirdas Taminskas
                                                                                             Dainius Žalimas