A case initiated regarding compensations of losses to the providers of public transportation services
On 13 February 2015 the 2nd Panel of the Constitutional Court initiated Case “On the Compliance of Para 3 of the Cabinet of Ministers Regulation of 15 May 2012 No. 341 “The Procedure for Establishing and Compensating Losses linked to the Provision of Public Transport Services and Setting the Tariff of Public Transport Services” with Article 1 and Article 105 of the Satversme of the Republic of Latvia”.
The Contested Norm
The Cabinet Regulation No. 341 provides, inter alia, that to an operator that provides public transport services losses shall be compensated for, if the losses have been incurred because the costs linked with the provision of service exceed the revenue gained. Para 3 of this Regulation (the contested norm) provides that these costs may not exceed the maximum costs to be compensated for, which are defined in an annex to the Regulation.
The Norm of Higher Legal Force
Article 1 of the Satversme: “Latvia is an independent democratic republic.”
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 constitutional complaint, with regard to which a case has been initiated at the Constitutional Court, was submitted by the limited liability company “Jelgavas autobusu parks” and the joint-stock company “Nordeka”. The submitters of the complaint note that they had acquired the right to provide public transport services in the period from 2009 to 2020 in public tenders. Public contracts on provision of services have been concluded with the Road Transport Administration.
The legal regulation, which was in force at the time when the contracts were concluded, envisaged that all loses of the operators of passenger transport (providers of public transport services) linked to the provision of service were to be compensated for. It is alleged that the amendments to the legal regulation limit the amount of compensation. This leads to a violation of Article 1 and Article 105 of the Satversme.
Legal Proceedings
The Constitutional Court has requested the Cabinet of Ministers to submit a written reply on the facts of the case and legal substantiation by 13 April 2015.
The term for preparing the case is 23 July 2015. The Court shall decide upon the type of procedure and the date for hearing the case after the case has been prepared.
Linked case: 2015-07-03