A case has been initiated with regard to interest payments from a commercial company, which experiences financial difficulties and is receiving aid
On 4 December 2014 the 1st Panel of the Constitutional Court initiated a case “On Compliance of Section 8(1) of the Law On Control of Aid for Commercial Activity with Article 105 of the Satversme of the Republic of Latvia”.
The Contested Norm
Section 8(1) of the Law on Control of Aid for Commercial Activity: “If a commercial company, which experiences financial difficulties, in accordance with regulatory enactments that regulate aid for commercial activity, receives aid then from the moment when aid for commercial activity is granted until the moment when the provision of aid is completed, abiding by the provisions set out in the decision by the European Commission or a national regulatory enactment on granting aid and irrespectively of the valid legal commitments of the commercial company, the commercial company is prohibited from fulfilling subordinated liabilities” (including, prohibition to repay debt, to calculate, accrue or disburse interest or other type of indemnification), irrespectively of the time when the subordinated liability was established.”
The norm is in force since 1 July of the current year.
The Norm of Higher Legal Force
Article 105 of the Satversme: “Everyone has the right to own property. Property shall not be used contrary to the interests of the public. Property rights may be restricted only in accordance with law. Expropriation of property for public purposes shall be allowed only in exceptional cases on the basis of a specific law and in return for fair compensation.”
The Facts
The case has been initiated with regard to the constitutional complaint submitted by Maksims Kargins. The applicant notes that in 2012, upon concluding a gift agreement, he acquired the right to receive interest payments for the use of capital of the joint stock company “Reverta”. He was receiving the interest payments until June of the current year; however, after the contested norm entered into force the disbursement was discontinued. Moreover, in accordance with the contested norm, these payments are neither calculated, nor accrued.
This situation allegedly unfoundedly restricts the applicant’s right to own property.
Legal Proceedings
The Constitutional Court has asked the institution, which adopted the contested act, – the Saeima, to submit a written reply on the facts of the case and legal substantiation by 4 February 2015.
The term for preparing the case of 4 May 2015. The Court shall decide upon the procedure and the date for hearing the case after the case has been prepared.
Linked case: 2014-36-01