Rules on monitoring compulsory procurement are compatible with the Constitution
The Constitutional Court declared that the norms (in the wording in force until 31 March 2022) which established the procedures for cancelling the compulsory procurement rights granted to a merchant and imposed the obligation to repay the state aid received for a given period if the annual electricity report was not submitted are constitutional. The Constitutional Court emphasised that all merchants receiving State aid had to act as careful and responsible stewards in the exercise of the rights granted to them and had to comply with all the obligations laid down in the legal norms.
The case was initiated before the Constitutional Court after an application by a limited liability company. In 2009, the applicant was granted the right to sell the generated electricity within the framework of the compulsory procurement. The applicant had not submitted a report on the operation of the power plant in 2020 by 1 March 2021. Therefore, on the basis of the contested norms, the State Construction Control Bureau, without prior notice, revoked the applicant’s rights and ordered the applicant to repay the State aid received for the relevant period. According to the applicant, the contested norms infringe the right to property included in the first three sentences of Article 105 of the Constitution, since both before the contested norms entered into force and at present the legal regulation provides for the first warning to the merchant if it has missed the deadline for submitting the annual electricity report.
The Constitutional Court noted that State aid provided an advantage to merchants to operate in a given sector of commercial activity. It is therefore in the interest of the public good that State aid is targeted and granted only to merchants who comply with the requirements of the law and whose activities contribute to achieving the objective of State aid. The obligation of the merchant to act as a careful steward in exercising the rights conferred on it is particularly important in view of the fact that, at the time when the contested norms were in force, the final consumers of electricity also paid for the State aid.
The obligation to submit an annual electricity report is not a new requirement for which the merchant would have to adapt in a special way. The total time period for the preparation and submission of the annual electricity accounts – the first three months of the year – is sufficient to allow the merchant to comply with this obligation within the statutory deadline without the need for a specific reminder. Moreover, if the merchant does not comply with the legal requirements, it cannot rely on the State to continue to grant it aid and not to order repayment of aid already received for the period in question.
Thus, the Constitutional Court concluded that the Cabinet of Ministers, by establishing the restriction of fundamental rights included in the contested norms, had taken care of the interests of the whole society, so that only those merchants who fulfilled the requirements related to the compulsory procurement system would receive State aid, and had balanced these interests with the restriction of the fundamental rights of the merchant. Therefore, the Constitutional Court found that the contested norms complied with the first three sentences of Article 105 of the Constitution.
Linked case: 2023-35-03