A case has been initiated with regard to receiving payment of interest from a commercial company, which experiences financial difficulties and is receiving aid
On 16 January 2015 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 2014.
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 a constitutional complaint submitted by Viktors Krasovickis. The submitter of the complaint allegedly, on the basis of two agreements on term deposits, has the property right to monetary resources in the joint stock company “Reverta”, as well as to regular monthly interest payments for the use of capital.
The applicant holds that the contested norm unfoundedly infringes upon his right to own property.
Legal Proceedings
The Constitutional Court recognised that there was no need to request the institution, which adopted the contested act – the Saeima, to submit a written reply, since on 4 December 2014 the Constitutional Court initiated Case No. 2014-36-01 “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” and the Saeima has already been requested to submit a written reply on the facts of the case and the legal substantiation.
The term for preparing the case is 16 June 2015. The Court shall decide upon the type of procedure and the date for hearing the case after the case has been prepared.
The judgements, decisions and other information regarding the Constitutional Court are available at the home page of the Constitutional Court www.satv.tiesa.gov.lv. Register to receive news from the Constitutional Court at: https://www.satv.tiesa.gov.lv/?lang=1&mid=51
Līna Kovalevska
Assistant to the President of the Constitutional Court
Lina.Kovalevska@satv.tiesa.gov.lv
(+371) 67830748, (+371) 29813216
Linked case: 2015-02-01