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The Constitutional Court
On behalf of the Czech Republic
The Constitutional Court decided on 1 May 2004. December 1999 in the plenary on the proposal of the Group
members of the repeal of the law No 144/1999 Coll., amending Act No.
42/1992 Coll., on the adjustment of property relations and settlement of property
entitlements in cooperatives, in wording of later regulations, and Act No. 586/1992
Coll., on income taxes, as amended, and Act No.
569/1991 Coll., on the Czech Republic Fund Plots, as amended
The provisions of section 13 (3). 4, 5, 6, 7, 8, 9 and 10, section 13a to 13 c and section 18, paragraph.
4 of law No. 42/1992 Coll., on the adjustment of property relations and the settlement of
property entitlements in cooperatives, as amended, section 4
paragraph. 1 (a). ZD), section 24, paragraph. 2 (a). Zi), § 34 paragraph. 3 (b). (f)) and section 40
paragraph. 25 of the Act No. 586/1992 Coll., on income taxes, as amended
the provisions of section 2 (2). 5 (7) of the Act No. 569/1991 Coll., on Plots
Fund of the Czech Republic, as amended, and article. (IV) Law No.
144/1999 shall be repealed on the date of publication of this finding in the collection of laws.
In the rest of the proposal is rejected.
19 July. July 1999 was the Constitutional Court delivered a draft group
members pursuant to § 64 paragraph. 1 (a). (b)) of the Act No. 182/1993 Coll., on the constitutional
of the Court. The judge-rapporteur has found that the submission complies with the formal requirements of
proposal to repeal of the law with the petitem, to the Constitutional Court finding decided
that law No 144/1999 Coll., amending Act No. 42/1992 Coll., on the adjustment of
property relations and settling property entitlements in cooperatives, in
as amended, Act No. 586/1992 Coll., on income tax, in the
as amended, and Act No. 569/1991 Coll., on Plots of the Fund
The Czech Republic, as amended by later regulations, promulgated in the collection of
laws (the amount of 51) on 15. in July 1999, is repealed on the day of its publication
Members of the Chamber of deputies of the Parliament of the Czech Republic in the number 77
They confirmed their signatures presented by the proposal to repeal the law and mandated
members Mark, Bend to act before the Constitutional Court.
A group of members of Parliament points out the inconsistency of the contested act, with the following
article. 1 of the Charter of fundamental rights and freedoms,
article. 2 (2). 3 of the Charter of fundamental rights and freedoms,
article. 4 (4). 3 and 4, of the Charter of fundamental rights and freedoms,
article. 11. 1 and 4, of the Charter of fundamental rights and freedoms,
article. 1 (1). 1 of the additional protocol to the European Convention for the protection of
human rights and fundamental freedoms.
The promoters will focus on legislation dealing with the property of the members of the
cooperatives in its transformation, because according to them in this area
There has been a fundamental intervention in the constitutional rights of the citizens, or members of the
of the cooperative. For this purpose, in particular the provisions of § vie 13 (3). 2 and
3 of the law No 42/1992 Coll., on the adjustment of property relations and the settlement of
property entitlements in cooperatives, as amended, that
established entitlements of eligible persons with claims, as established by
Amendment of this Act issued under Act No. 144/1999 Sb.
section 13 (3). 2 of law No 42/1992 States:
If the person does not become a participant in the legal person referred to in
the transformation of the project and is an entrepreneur in the field of the subject activities
the production or consumer cooperatives or agricultural production operates in
the case of agricultural cooperatives, securities must be issued to share 90
days from the date when the person entitled to issue in writing.
section 13 (3). 3 of the same law provides:
If the person does not become a participant in the legal person referred to in
the transformation of the project and not an entrepreneur within the meaning of paragraph 2, the
be issued in the full amount of the shareholding after seven years from the approval
the transformation project, if the authorized person after approval
the transformation of the project agrees with the cooperative or its legal
the successor otherwise.
By contrast, according to the newly amended provisions of section 13 (3). 4 to 10
the contested act-the amendment introduced a new way of "settlement"
holding the release property sheets of the cooperative or its
legal successor. The person whose claim has not been to 31. March
1999 satisfied, will receive on settlement of your claim in cash 10%
nevypořádaného holding, but not more than the amount of 10 000 CZK
the resources of the Land Fund of the Czech Republic (hereinafter referred to as "Land
the Fund "), if your claim properly apply until 31 December 2006. March 2000. If so requested by
the person entitled to the settlement of the ownership interest since Landed
the Fund is a cooperative or its legal successor, obliged to conclude a
the agreement on the settlement in this way. The bond has a maturity of 20 years
with an interest rate of 2% per year. In the absence of this procedure to the settlement,
for example. Therefore, that the person on claim settlement on the issue of
holding did, since it is the cooperative or its legal
required to make the release of the successor to the settlement of property sheets in total
nominal value denominated in the name of the authorized person. By passing the
property sheets that meet specified requirements is the claim
the persons concerned against the team or his assignee settled.
If the first person released property sheets
cooperatives, for 15 years nezcizí or inserts into the property of the cooperative, or
other capital companies, land fund these property sheets
the repurchased after 15 years from the time of their release for a nominal price, without
The promoters after this confrontation, conclude that the purpose of
the contested act is a change in the way the settlement of shares and
limits of their owners in a way that is not comparable with the
owns the rights of the owners of požívacími and other securities (shares,
bonds, notes, etc.) and, moreover, does not provide equivalent compensation
ensuring their rights. On the other hand completely disproportionately favors
borrowers, i.e.. mandatory people (and their successors)
taking without compensation since the transformation of the cooperative ownership
shares of the authorised persons. Consider, therefore, that a change in
How to issue shares to authorised persons, i.e.. their
the owners, enshrined in the contested Act restricts the rights of the owners
-institutional manner, in particular with regard to the constitutionally impermissible restrictions
the owner of the holding on the transformed cooperative or its
the legal successor, and violate the Treaty. 1 of the Charter of fundamental rights and
Another objection to the plaintiffs is that the contested act was created
the standard, which has a character of genuine retroactivity. Claims settlement
shares of the beneficiaries in section 13 (3). 3 to 10 of the Act arose
already under the terms of Act No. 42/1992 Coll., i.e.. When the transformation
cooperatives, thus for a long time before the effect of the contested act. The original section
13 (3). 3 based on the original method of release holding
However, he lost any sense next to the newly introduced method of settlement.
He became obsoletním, and evidence of the effectiveness of the back along with the article. (IV)
the contested Law, which provides that it is also
shares on the settlement of the claim before the date of its
efficiency. Retroaktivita follows from the fact that according to the original version, as
It is listed in the citation section 13 (3). 2 and 3 of law No. 42/1992 Coll., the owner of the
could choose between one of two ways: either the issue of holding that the
become a member of the cooperative, will operate the agricultural production, and thus gets
the right to the issue of the holding shall, without delay, or that agricultural
the production run and gets the right to release your property
share after the expiry of seven years from the approval of the transformation project. From
It follows that if decided for the second option, the legislature in
the contested Law his claim as a way to issue securities
share, fundamentally changed, and that in its detriment. This was according to the opinion of the
the petitioners violated article. 2 (2). 3 of the Charter of fundamental rights and freedoms.
The appellants expressed further doubts to the requirements and the legal
the nature of the property sheets, as defined in the contested act.
Meet the characters of the Charter defined in section 4, paragraph 4. 4 Act No 591/1992 Coll.,
the Securities Act, as amended, as they have to be
issued in connection with the acceptance of the obligations of the securities settlement
the share of beneficiaries on the transformed cooperative is associated with them
the right to the payment of the securities share and are transferable. In such a
the case, however, must also contain the particulars referred to in § 3 of the law No.
530/1990 Coll. on bonds, i.e., inter alia, the obligation of the issuer to repay the
the nominal value of the bond at a specified date, pay the specified yield
the bond within a specified period or the method of determining such income.
This will create the institutions, rules and situations that are inconsistent with the
the commercial code and related regulations valid in the area of
In the next part of his submission of the appellants based on the fact that the beneficiary
the person became the owner of the holding already before its release in the
the meaning of section 9 (2). 7 of law No 42/1992 Coll., i.e.. then, what was the securities
the share of the cooperative are calculated, and the person was familiar with him.
They point out that the contested law to substantial reduction of content occurs
the ownership of this property, and on limiting the rights of this asset
enjoy, and for a period of 15 years of deprivation of rights to enjoy its fruits and
benefits. The indirect result is then restriction of the rights to such
the asset. The appellants consider that the legislature is to protect
debtor-or transformed cooperatives legal successor-himself
outside the scope of the article. 11. 2 and 4 of the Charter of fundamental rights and
freedoms, since those entities "donated" the right to enjoy without compensation after the
for at least 15 years of foreign assets, while the owners of this property
failed the right to adequate income from this property.
While already under the original version of the law No 42/1992 Coll. provided
the legislature transformed a seven-year time limit for the issue of cooperatives
shares authorized persons (although without income) and the current
legislation from those who did not live up to their commitments of a substantial part
arising from the original version of the transformation Act, virtually
extended their advantage by twice. Of the appellants
are of the opinion that this was violated as the article. 11. 1 and 4, of the Charter of
fundamental rights and freedoms, article. 1 (1). 1 of the additional protocol to the
the European Convention for the protection of human rights and fundamental freedoms.
In conclusion, the appellants point out that according to the article. 1 of the Constitution of the Czech
Republic is the Czech Republic legal State and its definition characters
also include the principle of legal certainty and the protection of citizens ' confidence in the law and of the
It follows the ban on retroactive laws. Retroaktivita
provided for in article. (IV) the contested act is therefore a violation of acquired rights
beyond the purpose of Act No. 42/1992 Coll. and upsetting the principle of protection of
confidence in the law, and is thus in breach of article. 1 of the Constitution of the Czech Republic.
The Constitutional Court's constitutional complaint requested the observations of the
the Chamber of Deputies and the Senate of the Parliament of the Czech Republic.
By letter of 15 December 1997. September 1999 told the Chamber of Deputies Chairman prof.
Ing. Václav Klaus, CSc. The Constitutional Court, that law No 144/1999 Sb.
approved by the necessary majority of the members of the Chamber of Deputies on 1 May 2004. April
1999. June 28. April 1999 was rejected by the Senate, 19 November. in May 1999 he was
again approved by the Chamber of Deputies. President of the Republic was returned
day 2. June 1999 and 29 June. in June 1999, the Chamber of Deputies for its
the vote on the returned the law remained. After the law was signed by the
the Chairman of the Chamber of Deputies and the Prime Minister and has been duly declared.
As regards the content of the law, the President of the Chamber of Deputies
States that the reason to amend this law is the fear of the possible
the serious consequences of the mass settlement of the shares of the transformation
expected at the turn of the years 1999 and 2000. Today it is quite clear that agricultural
the cooperative or their legal successors in the position of debtors are not
and to set the time or they will not be able to transform the shares deal.
The aim of the amendment is, therefore, the protection of these entities before the bankruptcy. When
discussion of the Bill in the Chamber of deputies have been applied
fundamental and opposing views significantly, with the arguments of the opponents
the draft law was essentially identical to the examination of the proposal by a group of members of Parliament
The Constitutional Court. In conclusion, the President of the Chamber of Deputies stated that it is on
The Constitutional Court, in the context of the examination of the proposal to assess the constitutionality of
This law and issued the appropriate decision.
By letter of 30 June. September 1999 the Commission sent the Constitutional Court comments on the proposal
Group members chair the Senate. Libuše Benešová.
The Commission noted that the draft of the contested act has been the subject of comprehensive
debates in the Senate and in the course of discussing the draft were admittedly
shortcomings inherent in particular conflict between the original concept of the Bill,
which regulate the issue of holding, while the provisions of the amendment
the Act replaced by the semantically distinct word Edition of the word settlement; in
the situation where there is no between lender and agricultural cooperative agreement on
the settlement of the holding and, where it is proposed to address the status of the release
the property sheets in the value of the vypořádávaného property, and where the securities
the proportion is settled by the day on which the cooperative ownership issue sheets; on this day
It also extinguishes the claim beneficiaries against the agricultural cooperative.
The real interest, therefore, by reason of the mere absence of agreement
participants amended only on the property sheet that share of the real estate
It does not present; It is therefore the fact that the
-property sheet is issued by agreement of the parties;
-the law carries the obligation to pay a significant part of the obligations of the borrowers on
Land Fund and siphoning off public funds for other
-the General provisions of the Act apply to all types of cooperatives and the present
the Bill deals only with agricultural cooperatives;
-Amendment of the damaging yet outstanding private farmers, which should
the property issue the cooperative or its legal successor is already 6 years ago, and
prefers required the persons which allows you to issue the property sheets, and then
to get rid of all the commitments, in particular the group prefers the compulsory
persons that have voluntarily did not fulfil the obligation to settle its obligations
against a group of persons to which the compulsory, so already done etc.
Have been made and the fear that the proposed edit does conflict with the
article. 11 of the Charter of fundamental rights and freedoms (deprivation of ownership rights without
the existence of public interest).
The present draft has been criticized for even retroaktivita, because it modifies the
dealing with property sheets at a time when the regime of the law already takes 7
years to the detriment of the pending cases.
As a result, the Senate rejected by 28 June. April 1999 in a vote
which of the 65 senators present and senátorek boat 39 for
the rejection and 21 against the zmítnutí of the draft law. It is therefore now on the basis of the
proposal submitted by the Group of MPs on the Constitutional Court to assess the constitutionality of
of this law.
The Constitutional Court is also acquainted with the content of the paper from the President of the Republic
day 2. in June 1999, which was the law according to the article. 50 of the Constitution of the Czech Republic
returned to the Chamber of Deputies. In a recital stating that the persons concerned,
in accordance with the valid legislation, since 1992, assumed that they
After 7 years from the approval of the transformation project of the cooperative will be issued
their interest in full. Just before the end of this rather
long time when their share was "blocked", should be the certification system
shares in full settlement of claims, the regime replaced that substantially
exacerbated by their economic status. The law in this way violates the
one of the basic principles of the rule of law, the principle of trust in the
law, and, in effect, weakening the Constitution of the Czech Republic guaranteed
protection of property rights. The adopted law deepens inequality between
different groups of beneficiaries, established in 1992,
specifically, between persons, which began to engage in agricultural production (those
interest had to be issued within 90 days of the filing of the application), and between the
the people who started agricultural production run.
The Constitutional Court also requested the opinion of the Government, which in this case
presented Prime Minister Ing. Milos Zeman of the day 2. December 1998
The Chamber of deputies of the Parliament of the Czech Republic. It states that the
the Government agreed with the proposal of the law, but at the same time drew attention to the
that, in the near future he will discuss their own extensive amendment to the
Act No. 42/1992 Coll., which will be proposed and the solution method
the settlement shares in cooperatives. The Government also pointed out
that presented the Bill has some shortcomings, such as:
-of the proposed provisions is not always clearly evident, what nature would
have the property list in the sense that he has to go on the bond or security
paper shares, type
-the proposal (article 13, paragraph 5), so that the same way it is proposed
deal equity shareholdings of non-members of cooperatives, were settled and
holdings of members of cooperatives do not correspond with the actual status,
Since the settlement of the shares of members of cooperatives usually fixes
the statutes of cooperatives,
-also raises doubts as to the proposal (section 13a (3)), that the property sheet
He was publicly tradable directly from the Act, IE. without the permission of
the relevant State authority, which could lead to the fact that the capital
the market should get more problematic and illiquid securities, as well as
the proposal (article. (II)) on the scope of the tax exemption,
-standard, which is designed (article. (III) to expand the rights of the Land Fund),
is excessively General,
-the Bill lacks the explanatory memorandum, including the quantification of economic
and the financial reach of the proposed adjustments.
The Constitutional Court reviewed the proposal for the repeal of law No 144/1999 Coll. and came
concluded that the proposal is reasonable. While violations of the constitutional
the provisions reviewed in some cases from design differently.
From the constant case law of the Constitutional Court, although it follows that it is for the State,
to decide that one group will provide less benefits than the other, but may not
proceed arbitrarily, and his decision must be that they do so in the
the public interest, and not for example. Therefore, to conceal the shortcomings in the management of
The Constitutional Court as the constitutionality of the first protection authority decided that the
It will not deal with the justification of the proposal, concerning the objection that the contested
the law has introduced the new institutes, for example. property sheets, and even some
other provisions got into conflict with the commercial code or
related provisions. It does not have to be told that the objections are not
legitimate, but the Constitutional Court went to the presented proposal in particular
in terms of whether it has been violated constitutional standards which
in its proposal, the plaintiffs said.
After review of the submitted supporting documents, including the Parliamentary papers and with
taking into account the reasons which have been applied by the President
the Republic and Senate of the Parliament of the Czech Republic, the Constitutional Court decided to
the conclusion that the amendment violates the transformation Act, one of the basic
the principles of the rule of law, and the principle of legal certainty and confidence in law,
as is apparent from the article. 1 of the Constitution of the Czech Republic. Beneficiaries, in accordance
with the law, since 1992, they assumed that after 7 years from the
approval of the transformation project will be released their interest in the
full. Just before the end of this rather long period, however, the amendment
brought a completely different solution, and this settlement (not release)
holding either widened due to 20 years with interest rate of 2% or
the property sheet that a compulsory purchase for a nominal value of Land
the Fund after 15 years without remuneration from the first person who was
securities list of the cooperative. The amendment, therefore, on the one hand, damages,
deteriorating economic situation and denies the rights of ownership of the legitimate
the property shares, and on the other side of the law legalizes the cooperatives
or foreign trade companies dispose of the property in accordance with their
custom layouts. It is also a violation of article. 11. 1 and 4, of the Charter of
fundamental rights and freedoms, the right of ownership of all owners has the same
legal content protection. Whether or not the forced restriction of ownership rights is possible
only in the public interest, on the basis of the law, and for compensation.
Its scope and concepts of the amendment and deepens the inequality between the
different groups of beneficiaries, which was already established in the
in 1992, and between persons, which began to operate the farm
production and which had to be holding issued within 90 days from the submission of the
applications, and between persons who started agricultural production,
which could (not have to) be a share issued pursuant to section 13 (3). 3
Act No. 42/1992 Coll., this inequality, which could be from the restitution
looking perhaps regarded as justified, and hence for the legislation, which
reflect the public interest, but has been extended by an amendment in this
extent that it already cannot be considered as justified and must be evaluated
as a violation of the article. 1 of the Charter of fundamental rights and freedoms expressing
the principle that people are equal in rights.
In connection with the above statement you must agree with the fact that
the amendment had been violated and the article. 1 (1). 1 of the additional protocol to the European
Convention for the protection of human rights and fundamental freedoms, which provides that
any natural or legal person has the right to peacefully enjoy your
assets. No one can be deprived of his property except in the public
interest and under the conditions provided for by law and general principles of international
When considering all of the above reasons, the Constitutional Court ruled that it should be
the design of the group members meet and a new adaptation of Act No. 42/1992 Coll. and
Law No. 586/1992 Coll. and no 569/1991 Coll. repealed. After the formal page
He had to come out of it, that Act No. 144/1999 Coll., which was declared in
The collection of laws of the day 15. in July 1999, the same day changed the provisions in
the original law No 42/1992 Coll., where the provisions of the contested act
No 144/1999 Coll., which the Constitutional Court considered unconstitutional, this way
At the same time, the Constitutional Court considers it necessary to point out how the authorities
legislative, Executive, law No 42/1992 Coll. section 13 should in
paragraph. 3 consolidate the position of the beneficiaries, that is, it follows from the text,
but is zeslabováno to the extent that the issuance of securities
share, though, is laid down by law at the time when you want to pass binding
the seven-year period for this issue of the disputed and by law No 144/1999
Coll. was practically annulled. The Constitutional Court therefore left without
Noting the observations of some of the members of Parliament or even the senators who in design
Bill saw the withdrawal of ownership without the existence of a public
interest or as a form of expropriation, but not for the need to
a democratic State, but for another group of people that did not honor his
commitments, which since 1992 resulted from the Act. Agricultural
the cooperative then got the possibility to use the assets of the beneficiaries and the proceeds
from this property. Some acted honestly, economically and legally fulfilled
legal obligation and property shares. Was based on the fact that
the property was entrusted to the Administration, that is, and that it is necessary
return within a specified period. It was, however, even that of entrusted assets
For these reasons, the Constitutional Court annulled the contested statutory provisions
under section 70, paragraph. 1 of law No. 182/1993 Coll., on the Constitutional Court.
As regards the part of the amendment, according to which, in section 13 (3). 2 and 3 of law No. 42/1992
SB. the words "published" and "release" has been replaced by the words "settlement" and
"settlement", the proposal on the abolition of the Constitutional Court rejected under section 70
paragraph. 2 Act No. 182/1993 Coll., as they came to the conclusion that this
legislation is unconstitutional, while constitutionally Conformal
the interpretation and application of legal standards violations
proprietary rights of authorised persons.
The President of the Constitutional Court:
JUDr. Kessler v. r.
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