24

Case No 12/93

THE CONSTITUTIONAL COURT OF

THE REPUBLIC OF LITHUANIA

R U L I N G

On the compliance of the parts of item 3 of the Law

of the Republic of Lithuania "On Appending and Amending the

Law of the Republic of Lithuania "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property" ", adopted 15 July 1993, by

which Parts 5 and 6 of Article 4 of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991

have been amended, as well as items 14, 15, 16, 17, 18 and

19, by which Article 12 of said Law has been appended by

items 10, 11, 12, 13, 14 and 15, with the Constitution of

the Republic of Lithuania

27 May 1994, Vilnius

The Constitutional Court of the Republic of

Lithuania, composed from the Justices of the Constitutional

Court Algirdas Gailiūnas, Kęstutis Lapinskas, Zigmas

Levickis, Pranas Vytautas Rasimavičius, Stasys Stačiokas,

Teodora Staugaitienė, Stasys Šedbaras and Juozas Žilys,

the secretary of the hearing Sigutė Brusovienė,

the petitioner - Andrius Kubilius and Zenonas

Juknevičius, representatives of a group of the Seimas

members,

the party concerned - Seimas member Mykolas Pronckus

and Algirdas Taminskas, representatives of the Seimas,

pursuant to Part 1, Article 102 of the Constitution

of the Republic of Lithuania and Part 1, Article 1 of the

Law on the Constitutional Court of the Republic of

Lithuania, in its public hearing of 27 April - 3 May 1994

conducted the investigation of Case No 12/93 subsequent to

the petition submitted to the Court by a group of the Seimas

of the Republic of Lithuania members requesting to

investigate the compliance of the parts of item 3 of the Law

of the Republic of Lithuania "On Appending and Amending the

Law of the Republic of Lithuania "On the Procedure and

Conditions of the restoration of the Rights of Ownership to

the Existing Real Property" ", adopted 15 July 1993, by

which Parts 5 and 6 of Article 4 of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991

have been amended, as well as items 14, 15, 16, 17, 18 and

19, by which Article 12 of said Law has been appended by

items 10, 11, 12, 13, 14 and 15, with the Constitution of

the Republic of Lithuania.

The Constitutional Court

has established:

The petitioner - a group of the Seimas members -

requests the Constitutional Court to investigate if the

parts of item 3 of the Law of the Republic of Lithuania "On

Appending and Amending the Law of the Republic of Lithuania

"On the Procedure and Conditions of the Restoration of the

Rights of Ownership to the Existing Real Property" "

(hereinafter this law shall be referred to as "the Law in

dispute"), adopted 15 July 1993, by which Parts 5 and 6 of

Article 4 of the Law "On the Procedure and Conditions of the

Restoration of the Rights of Ownership to the Existing Real

Property" of 18 June 1991 have been amended, as well as

items 14, 15, 16, 17, 18 and 19, by which Article 12 of said

Law has been appended by items 10, 11, 12, 13, 14 and 15

(Official Gazette "Valstybės Žinios", 1993, No 32-275), do

not contradict the Constitution of the Republic of

Lithuania.

In the request, the petitioner specifies that, all

the conditions established in parts 5 and 6 of Article 4

which has been amended by the Law in dispute, may be applied

only upon the restoration of land so that it would not

remain uncultivated. Besides, in this Article claimants to

land are categorized according to the type of activities

(whether they are members of agricultural company or not),

and this is related to the right to the restoration of

property, even though, under Article 29 of the Constitution,

all people shall be equal before the law. The petitioner

maintains that the Seimas by supplements to Article 12,

which were made by the Law in dispute, "expanded the scope

of the land not to be returned, basing agriculture on

collective property, even though in Article 46 of the

Constitution it is established that Lithuania's economy

shall be based on the right to private ownership".

The petitioner's representatives have explained that

by the Act of 11 March 1990 the Independent State of

Lithuania has been restored. In this Act it is declared that

the territory of Lithuania is integral and indivisible, and

the constitution of any other State has no jurisdiction

within it.

In the Law "On the Reinstatement of the 12 May 1938

Constitution of Lithuania", the Supreme Council of the

Republic of Lithuania stated, that the May 12, 1938

Constitution of Lithuania had been suspended illegally when

on June 15, 1940 the Soviet Union committed aggression

against the independent state of Lithuania and ,thereby,

terminated the validity of the 20 April 1978 Constitution of

the Lithuanian SSR (Basic Law), the 7 October 1977

Constitution of the USSR (Basic Law), as well as the

fundamentals of the legislation of the USSR and Union

Republics, also other USSR legislation on the territory of

the Republic of Lithuania. The laws which had been adopted

on their basis lost their validity, Article 4 of the Land

Code of the Lithuanian SSR among them, in which it is

declared that: "In compliance with the Constitution of the

USSR and the Constitution of the Lithuanian SSR, land is

state property - common property of all the Soviet people".

In the Law "On the Reinstatement of the 12 May 1938

Constitution of Lithuania" it was determined that the

reinstatement of the 12 May 1938 Constitution of Lithuania

does not in itself re-establish other laws in effect in the

Republic of Lithuania prior to 15 June 1940. This provision

is significant because it has taken into consideration the

changes that took place, and the necessity on the basis of

these laws to regulate property relations by laws. Former

property relations are not denied.

Their undeniability was established in the provision

of the Supreme Council adopted on 15 November 1990: "To

determine that citizens of Lithuania are entitled to the

right to restore their existing property in kind in the

scope and procedure prescribed by laws, and in case when

there is no such possibility, to receive compensation".

Afterwards, in the first part of Article 1 of the 18

June 1991 Law "On the Procedure and Conditions of the Rights

of Ownership to the Existing Real Property" nationalization

of property was compared to its unlawful socialization, and

it was specified that property was not the ownership of

State, public or other organizations, but it was only at

their disposal. Therefore, the essence of the contents of

the first part of Article 45 of the Provisional Basic Law

was the establishment of sovereign powers of Independent

State of Lithuania on the whole territory of the State and

not the acceptance of the 21 June 1940 Declaration of the

People's Seimas on the Nationalization of Land.

In the opinion of the petitioner's representatives,

persons enumerated in the first part of Article 1 of the 18

June 1991 Law "On the Procedure and Conditions of the

Restoration of the Rights of Ownership to the Existing Real

Property" are still the owners, only their right of property

ownership has been infringed upon, i. e. they have been

deprived of the opportunity to use and manage the property.

Therefore, their property may be seized only in conformity

with the requirements set forth in Article 23 of the

Constitution.

In the opinion of the representatives of the

petitioner , Parts 5 and 6 of Article 4 of the Law in

dispute contradict Article 23 of the Constitution, as they

provide for the seizure of property i. e. factual

irretrievability in case when there is no public interest.

The legislator established formal obstacles which can be

overcome only by persons who have been given permission by

district Board or had had an exclusive social position in

the past.

The representatives of the petitioner have also

explained, that the obligatory land lease restricts the

owner's rights. This amendment to the Law in dispute also

fails to comply with the provision of Article 46 of the

Constitution that Lithuania's economy shall be based on the

right to private ownership, freedom of individual economic

activity, and initiative. Lease of land grants privileges to

the persons specified in the fifth part of Article 4 of the

Law in dispute on the basis of their social position, and

this contradicts Article 23 and 29 of the Constitution.

The petitioner's representatives maintain that the

supplements to Article 12 - items 10, 11, 12, 13, 14, and 15

- adopted by the Law in dispute contradict the first and

fourth parts of Article 46 of the Constitution, because they

establish monopoly in agriculture (support state farms) and

fail to protect freedom of fair competition.

The representatives of the petitioner have submitted

the following explanations concerning Article 12:

`1. The provision of item 10, Article 12 is not in

compliance with Article 46 of the Constitution, as it gives

preference to companies, i. e. collective economic activity

and makes the owner, to whom the rights of ownership to land

have not been restored yet, lease it for agricultural

enterprises without setting any terms. The needs of the

company are identified with the needs of society, therefore,

in this sense, the provision of item 10, Article 12 of the

Law in dispute fails to comply with Article 23 of the

Constitution as well.

2. By item 11 of Article 12, an attempt is made to

base Lithuania's economy on the right to collective (state)

ownership, as land areas specified in it are used for the

needs of companies and forest districts but not for the

interests of the whole state . By said item, the preference

is given to horses, and not to the needs of society.

3. According to item 12 of Article 12, the priority

goes not to the society, but to a specific enterprise. The

profit gained by a man or a specific enterprise is not the

need of society in the context of Article 23 of the

Constitution.

4. The provision of item 13, Article 12 that the land

shall be bought out for the usage of rural residents, means

common, collective and not private economic activity. In

rural settlements, land for the construction of residential

houses is bought out even without having construction

projects, the procedure of their confirmation and the

client.

5. Item 14 of Article 12 itself does not need any

motivation, because rivers and lakes may be, without any

criteria, ascribed by the Government to water bodies not

subject to privatization. Besides, it is not the restoration

of the rights of ownership which is regulated by this item,

but privatization.

Generally, rivers and lakes must be state property,

however, it is not the Government who should resolve this

issue.

6. By item 15 of Article 12, at the expense of the

owner, the boundaries of the land not liable to be returned

are extended, and it is going to be granted for farmers-

tenants, and not to satisfy the needs of the society. This

fact contradicts Article 23 of the Constitution, because the

land is bought out not for the public benefit but for the

advantage of a specific person.

The representatives of the party concerned have

denied the validity of the petitioner's request. They have

explained that from the very restoration of the Independent

Sate of Lithuania, i. e. after the Act of 11 March 1990, all1

laws and resolutions adopted by the Supreme Council of

Lithuania have been declaring that the entire land is state

property. For instance, in Article 4 of the 11 March 1990

Law "On the Reinstatement of the 12 May 1938 Constitution of

Lithuania" it is established that the reinstatement of said

Constitution did not in itself re-establish other laws in

effect in the Republic of Lithuania prior to 15 June 1940".

The representative of the party concerned has stated

that by the 11 March 1990 Law of the Republic of Lithuania

"On the Provisional Basic Law of the Republic of Lithuania"

the validity of the 12 May 1938 Constitution of Lithuania

was suspended, the Provisional Basic Law of the Republic of

Lithuania was ratified, and it was established that, on the

territory of the Republic of Lithuania, previous laws and

other legal acts of Lithuania would be further in effect,

providing they did not contradict the Provisional Basic Law

of the Republic of Lithuania.

In the first part of Article 45 of the Provisional

Basic Law it is determined that the land, its mineral

resources, inland and territorial waters, flora and fauna,

and other natural resources shall be the national wealth and

exclusive property of the Republic of Lithuania, whereas in

the first part of Article 46 it is specified that property

of the Republic of Lithuania that is state property may,

with or without compensation, become private property of

citizens or their groups according to the procedures

established by law.

In the opinion of the representatives of the party

concerned, provisions of the Provisional Basic Law in

respect of the competence of the Supreme Council to regulate

property relations in the Republic by legislative means, set

forth in item 4 of the second part of Article 78 of said

Law, establishes the state's right of ownership to land.

However, it may not be stated categorically that the owner

of the nationalized property is state. If property were its

ownership, it would have been sufficient to adopt a law

concerning its transferral to persons. However, the act of

unconditional restitution has not been adopted either,

therefore, it would not be proper to state that the rights

of former owners have been violated. On 18 June 1991, upon

the adoption of the Law "On the Procedure and Conditions of

the Rights of Ownership to the Existing Real Property",

restrictions were imposed. Besides, there are two groups of

such persons: (1) former property owners that are still

alive, (2) legitimate successors of former owners - their

children and grandchildren - although, not all of them can

be considered the owners whose rights have been violated.

The legislator by this Law has provided possibilities to

restore rights of ownership also for those persons whose

documents confirming their property rights have not survived

to these days. If there were no for such Law, the right of

ownership should be proved pursuant to Article 143 of the

Civil Code. The representatives of the party concerned

maintain that persons specified in Article 2 of the 18 June

1991 Law "On the Procedure and Conditions of the Rights of

Ownership to the Existing Real Property" are not the owners

whose rights have been violated, therefore, Article 23 of

the Constitution, which protects the rights of ownership,

is not applicable to them.

While evaluating the restoration of land in property

aspect, it was said that: 1) former land owners restore land

areas which are not debt-laden, though some of them were

debt-laden in the past, 2) recover considerably improved

land areas without paying to anybody for this improvement,

3) restoration is done at the expense of all the citizens of

Lithuania, 4) part of the former owners, having restored

land areas, destroyed the property which had been created by

common public efforts (watering equipment, etc.). Such

restoration of land contradicts Article 23 of the

Constitution.

The representative of the party concerned has also

specified that in Parts 5 and 6, Article 4 of the Law in

dispute "On Appending and Amending the Law of the Republic

of Lithuania "On the Procedure and Conditions of the Rights

of Ownership to the Existing Real Property" " the norm

concerning the land lease is established which ensures the

possibility to restore land for 160. 000 non-rural citizens.

The statement that land must be used for agricultural

purposes is based on the provision of the third part of

Article 46 of the Constitution that the State shall regulate

economic activity so that it serves the general welfare of

the people. If there were no for such restrictions, it would

not be possible to carry out the land reform. In

International Law not only the protection of property

rights is established, but also the right of the State to

control, for public interests, the use of property by laws.

While evaluating supplements to Article 12 of the 18

June 1991 Law "On the Procedure and Conditions of the Rights

of Ownership to the Existing Real Property", representatives

of the party concerned reasoned, that the public interest

for land to be used for orchards and berry-fields (item 10

of Article 12) as well as pig-breading complexes of

specialized companies (item 11 of Article 12) is due to

their economic effectiveness, and the amount of State funds

used. Items 10, 11, 12, 13, 14 and 15 have been formulated

in accordance with the provisions of Constitution that the

State shall regulate economic activity so that it serves the

general welfare of the people.

The Constitutional Court

holds that:

On March 11, 1990, the Supreme Council of the

Republic of Lithuania adopted the Act on the Restoration of

Independent State of Lithuania and declared thereby that the

execution of sovereign powers of the Lithuanian State,

heretofore constrained by alien forces in 1940, was

restored, and Lithuania was once again an Independent State.

It was also declared that the Constitution of any other

State had no jurisdiction within it.

The Supreme Council, by the 11 March 1990 Law "On the

Reinstatement of the 12 May 1938 Constitution" annulled the

20 April 1978 Constitution of the Lithuanian SSR (Basic

Law), also the fundamentals of legislation of the USSR and

Union Republics, as well as other USSR legislation in the

Republic of Lithuania". The Supreme Council by the same Law

reinstated "the 12 May 1938 Constitution of Lithuania

throughout the Republic of Lithuania, suspending those

paragraphs and articles governing the status and powers of

the President, the Seimas of the Republic, the Assembly, the

State Council and the State Supervisory body". The validity

of Chapter 8 of the 12 May 1938 Constitution entitled

"National Economy", by norms of which property relations are

regulated, was not terminated, and this meant the

restitution of the institute of the right of private

ownership.

The Supreme Council by 11 March 1990 Law "On the

Provisional Basic Law of the Republic of Lithuania

terminated the validity of the 12 May 1938 Constitution of

Lithuania and ratified the Provisional Basic Law of the

Republic of Lithuania. In the first part of Article 44 of

this Law it was established that : "The economy of Lithuania

shall be based on the property of the Republic of Lithuania,

which shall consist of the private property of its citizens,

the property of groups of citizens, and State property" .The

provision is significant primarily because of the fact that

the restitution of the institute of the right to private

ownership was established again, i. e. its continuity with

the constitutions of Lithuanian State was actually

recognized. Secondly, three forms of property that existed

and were recognized at that time in our State, were

enumerated in said Law. Thirdly, all three legalized forms

of property were joined under one concept: "Property of the

Republic of Lithuania". Therefore, the arguments on the

basis of which notions "property of the Republic of

Lithuania" and "state property" are identified, are

groundless, because it is the relation of the whole to its

part. Thus, the norm of the first part of Article 45 of the

Provisional Basic Law that "the land, its mineral resources,

inland and territorial waters, forests, flora and fauna, and

other natural resources shall be the national wealth of

Lithuania and the exclusive property of the Republic of

Lithuania", did not mean that these objects of property were

exclusive property of the State. It should be noted, that in

the Provisional Basic Law only mineral resources of the land

were declared to be the exclusive property of the Republic

of Lithuania.

Taking the fact that on 15 June 1940 to 11 March 1990

Lithuania was occupied, annexed and incorporated into

another state - the USSR - into consideration, on 11 March

1990 for the Supreme Council of primary importance was not

the precise establishment of the subjects, objects and forms

of property, but the constitutional dissociation from the

occupation state and its legal system, and detachment of the

State of Lithuania and its citizens from the unlawful

governing of the USSR. This was expressed by the wording of

Article 45 of the Provisional Basic Law that all the wealth

of Lithuania shall be its national wealth and the exclusive

property of the Republic of Lithuania, therefore,

jurisdiction of any other state shall not be applied to it.

Principles of independence that had been set forth in the

Act of the Restoration of Independent State of Lithuania,

were once again constitutionally established by his norm.

That meant return to economic system based on the right to

private ownership, from which Lithuania had been expelled by

force against its will.

The right to possess property is one of the most

significant human natural rights, and a person may not be

arbitrarily deprived of it. It may only be seized for the

needs of society according to the procedure established by

law. Such principle of the protection of property and rights

to property is also formulated in international legal

instruments. For instance, in the second part of Article 17

of the Universal Declaration of Human Rights it is

specified: "No one shall be arbitrarily deprived of its

property"; in the first part of Article 1 of the Protocol 1

pertaining to the European Convention for the protection of

Human Rights and Fundamental Freedoms it is maintained:

"Every natural or legal person is entitled to the peaceful

enjoyment of his possessions. No one shall be deprived of

his possessions except in the public interest and subject

to the conditions provided for by law and by the general

principles of international law".

The independence of the Republic of Lithuania was

destroyed by force, in realization of unlawful secret

agreements of 1939 between the USSR and Hitler's Germany.

The unlawfulness of these agreements and their consequences

was officially declared already in the February 1990

Resolution of the Supreme Council of the Lithuanian SSR "On

1939 Treaties between Germany and the USSR and elimination

of their consequences to Lithuania. It was also stated in.

this resolution that elections to the People's Seimas, which

took place on 14-15 July 1940, were carried out in violation

to the Constitution of Lithuania, and it was declared that

"the 21 July 1940 Declaration of the People's Seimas

concerning Lithuania's entrance into the USSR is unlawful

and null and void as it did not express the will of the

Lithuanian People".

In the 11 March 1990 Law of the Republic of Lithuania

"On the Reinstatement of the 12 May 1938 Constitution of

Lithuania" it was stated, that the 12 May 1938 Constitution

was suspended when on 15 June 1940 the Soviet Union

committed aggression against the independent State of

Lithuania and annexed it". Thus, the People's Seimas, which

had been formed in violation to the Constitution of

Lithuania, was used for the destruction of the economic

system established in the Constitution, and for the

unconstitutional enforcement of economic system of an alien

state on Lithuania. The Declaration of 22 July 1940 "On

Proclaiming all the Land of Lithuania National Property", i.

e. state-owned property, may serve as an example of such

acts of the People's Seimas. The next day the People's

Seimas adopted "Declaration on Nationalization of Banks and

Large-scale Industry", followed by nationalization of other

property as well. Such overall nationalization and

elimination of private property was carried out not only in

rough violation of the 1938 Constitution of Lithuania, but

also unlawfully denying human natural right to private

ownership by force. Lawful state property could not and did

not appear on the basis of such arbitrary acts of occupation

government, as rights may not originate on unlawful basis.

Therefore, property taken from people in such a way, may be

considered as property which is only factually managed by

the state.

The right of private ownership found its way back

into the legal system of the State due to the constitutional

provisions of Article 44 of the Provisional Basic Law and

Article 46 of the 1992 Constitution. Thereby, the continuity

of the provisions of the 12 May 1938 Constitution governing

the property right has been confirmed. However, it is

impossible to impartially reconstruct the complete former

system of property relations which existed in Lithuania in

1940. In the Law "On the Provisional Basic Law of the

Republic of Lithuania" it was stated that even changes which

took place during occupation period should not be ignored.

In the preamble to this Law it is determined that the

Supreme Council has taken into consideration the necessity

of bringing the provisions of the 12 May 1938 Constitution

of Lithuania "with today's changing political, economic and

other social relations".

The Supreme Council by the 11 March 1990 Law "On the

Reinstatement of the 12 May 1938 Constitution of Lithuania"

did not terminate the validity of Chapter 8 of this

Constitution entitled "National Economy", the norms of which

regulate property relations, however, in item 4 of this Law

established that "the reinstatement of the Constitution of

Lithuania does not in itself re-establish other laws in

effect in the Republic of Lithuania prior to 15 June 1940".

While recognizing the restitution of property and continuity

of property rights, the Supreme Council on 15 November 1990

confirmed the following statements: "The recognition of

continuity of citizens' rights of ownership is

unquestionable", "To establish that citizens of Lithuania

are entitled to the right to restore the existing real

property in kind in the scope and procedure prescribed by

laws, and when there is no such possibility, to receive due

compensation".

The circumstance that there was a need to resolve the

issue concerning continuity of the rights of ownership and

to vote the recognition of the continuity of property rights

of the citizens of the Republic of Lithuania shows, that the

Supreme Council considered the rights of ownership that had

been possessed before nationalization (the right of a

particular person to manage, use and dispose of property) as

unlawfully nullified. The promulgation of the provision of

continuity of property rights was a basis for the

implementation of a limited restitution , i. e. for the

protection of property rights that had been violated, in the

conditions and procedure prescribed by laws.

While recognizing the continuity of property

ownership rights, the Supreme Council by the statement of 15

November 1990 actually also ascertained that situations were

possible when all the existing property could not be

restored in kind. In such cases, it was provided for the

possibility to receive compensation. The Constitutional

Court indicates that the provision that, providing there is

no possibility to restore property in kind, it must be

adequately compensated for, does not contradict the

principles of inviolability of property and protection of

property ownership rights, because fair compensation also

ensures restoration of property ownership rights.

The realization of said rights is established in the

Law of the Republic of Lithuania "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property". In Article 1 of this Law it was

specified: "This Law shall legislate the procedures and

conditions of the restoration of the right of ownership to

the citizens of the Republic of Lithuania to the property

which was nationalized under the laws of the USSR

(Lithuanian SSR), or which was otherwise unlawfully made

public, and which, on the day of enactment of this Law, is

considered the property of the State, of the public, of co-

operative organizations (enterprises), or of collective

farms".

The Supreme Council by this Law has recognized that

the rights of ownership to the property which was

nationalized under the legal acts of the Lithuanian SSR, or

which was otherwise unlawfully made public, must be

restored. The legislator, while maintaining that the rights

of ownership that had been unlawfully terminated, must be

restored, also recognized that it had to be done in the

procedure and conditions prescribed by laws. It is, on the

one hand, overall forcible character of violation of the

rights of ownership and, on the other hand, the decision to

carry out only limited restitution which predestined the

situation when the rights of former owners, that had been

unlawfully terminated, could not be protected by means of

norms of civil law that were in force at that time. For this

purpose, a special law like the Law "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property", had to be enacted.

Under this Law, the rights of ownership shall be

restored not to all former owners of property and not to all

the property they had possessed. It contains special

conditions, restrictions rather, which are applied to former

owners of property who desire to restore their property in

kind. Therefore, the statement, that by said Law an attempt

is made only to regulate the procedure of the restoration of

the rights of ownership, may not be considered as grounded.

The fundamentals of the restoration of the rights to

private ownership and to land, which had been earlier

violated, were formulated already in the legal acts of the

Supreme Council of the Republic of Lithuania. The

establishment of additional conditions and restrictions,

disregarding these acts, would not be in compliance with the

principled provisions of the continuity and restoration of

the rights of ownership, enacted by the legislator. After

the enforcement of the Constitution of the Republic of

Lithuania on 2 November 1992, laws that were amended or

newly adopted laws had to be co-ordinated with it.

Article 2 of the Law "On the Procedure and Conditions

of the Restoration of the Rights of Ownership to the

Existing Real Property" is titled: "Citizens Entitled to

Restored Ownership Rights", and in this Article, a notion

"former owner" is used to define such a person. He, i. e.

"the owner of property" is not mentioned in the Law with

regard to present time. While evaluating the status of a

citizen, who tries to restore the unlawfully terminated

rights of ownership, the fact when he acquires the right to

manage, use and dispose of some specific property, is of

considerable importance.

Until his property is restituted or he is paid an

appropriate compensation for it, the subjective rights of

the former owner to a specific property are not restored

yet. The law by itself shall not create subjective rights

until it is applied to a specific subject pertaining to the

restoration of a specific property. In such a situation the

legal meaning of the decision of the institution authorized

by the State to restore property in kind or compensate for

it is, that only from this proper moment, the former owner

acquires the rights of ownership to such property.

The legislator, having defined the procedure and

conditions of the restoration of the rights of ownership,

emphasized the priority of restoring the actual land

property. However, in the event when, due to the factual

present land-tenure relations and public interests, it is

impossible to grant the actual property, the former owner is

guaranteed the right to choose the manner of restoring the

right of ownership in the procedure and conditions

prescribed by laws.

The restoration of the rights of ownership and land

reform are two inseparable processes. Their unity is

expressed through their common object - land, therefore, the

restoration of the rights of ownership to land is co-

ordinated with land reform.

The afore mentioned circumstances must be necessarily

taken into consideration while evaluating the compliance of

the legal norms of the Law in dispute with the Constitution.

1. On the compliance of the parts of item 3 of the

Law "On Appending and Amending the Law "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property"", adopted 15 July 1993, by which

Parts 5 and 6 of Article 4 of the Law "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property" of 18 June 1991 have been

amended, with the Constitution of the Republic of Lithuania.

In Parts 5 and 6 of Article 4 entitled "Conditions

and Procedures for the Restoration of the Right of Ownership

to Land Situated in Rural Areas" of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" , adopted 18 June

1991, which has been amended by the Law in dispute, it is

established: "The right of ownership to land used for

agricultural purposes shall be restored to: persons

establishing farmer's holding; members of agricultural

companies and partnerships; persons planning to use the

restored land for private economic purposes as well as other

agricultural activities; persons, who intend to lease the

restored land for other legal persons engaged in farming.

While restoring the right of ownership to the land

used for agricultural purposes, it may be done only after

identification of the use of this land. This may be either:

1) a person, regaining this land, provided that he is

establishing a farmer's holding or is going to use this land

for private economic purposes;

2) a tenant (a farmer,. a person ready to engage in

farming, or an agricultural company), consenting to lease

the land (or portion thereof), which is unnecessary for the

needs of the landowner's family, for at least 3-year-period.

Preliminary consent to lease plots of land used for

agricultural purposes, designed in the land-planning

project, must be witnessed by a notary. The priority for

renting the land goes to the present user of this land."

The specific purpose and status of land, in

comparison to other objects of real property, predetermine

special legal regulation of land relations. Thus, in the

first part of Article 47 of the Constitution it is

established that, land, internal waters, forests, and parks

may only belong to the citizens and the State of the

Republic of Lithuania by the right of ownership. The only

exception is set forth in the second part of Article 47 of

the Constitution: "Plots of land may belong to a foreign

state by the right of ownership for the establishment of its

diplomatic and consular missions in accordance with the

procedure and conditions established by law".

The second part of Article 54 of the Constitution

contains the provision that the exhaustion of land shall be

prohibited by law. This constitutional principle of land

protection shows that land is interpreted as a public value

having its social function - to serve the welfare of the

people. The society is not indifferent to the way the land

is used, because it is in public interests to preserve the

productivity of land. Therefore, the right of the state to

regulate conditions of the restoration of the rights of

ownership to land is vital in order to co-ordinate the

interests of former owners with the public interests.

Parts 5 and 6 of Article 4 establish the conditions

for the restoration of the rights of ownership, under which

land used for agricultural purposes is returned in kind. The

specific character of agricultural land is that it is used

for agricultural production. Therefore, the legislator,

while determining the conditions for the restoration of the

land used for agricultural purposes, must neither impair the

rights of former owners, nor ignore the public interest to

use this land for agricultural purposes. Such public

interest is based on the provision established in the third

part of Article 46 of the Constitution that, the State shall

regulate economic activity so that it serves the general

welfare of the people.

Parts 5 and 6 of Article 4 contain the provisions

that land used for agricultural purposes may be restored to

: 1) persons establishing a farmer's holding; 2) members of

agricultural companies and partnerships; 3) persons who

desire to use the land regained for personal economic needs

and other agricultural activity. Said persons at present are

already users of the land which is given back to them. It

will further be used for its special purpose, therefore,

their interests do not contradict public interests.

The provision of the fifth part of Article 4 that the

land used for agricultural purposes may be restored "to

persons who are going to lease the land which is restored to

them for other natural and legal persons engaged in

farming", to a portion of former landowners, i. e. to those

who themselves are not going to use the land for

agricultural purposes, prescribes an unusual condition.

The conclusion of lease contract is the owner's right

based on his free will. The obligation to lease land,

imposed on the owner, is not acceptable from the point of

view of the traditions of civil law, as it restricts the

freedom to dispose of land. Though, it must not be

disregarded, that this is only a temporary measure used in

the implementation of land reform. Land is restored to

former owners ready to lease it, even if they would not use

it for agricultural purposes. However, while applying

unusual conditions for lease, which actually make the former

owner lease the restored land for its real user, it is

necessary to ensure the imposition of such imperative

conditions on the other party to the lease contract as well.

Thus, in cases when the owner chooses the lease of the land

(or a portion thereof) as a condition of the restoration of

the land which he had in his ownership earlier, the factual

user of this land must conclude a lease contract with a

landowner. In the event that the factual land user refuses

to conclude a lease contract, such land should be restored

to the former owner as a person who has met the condition

prescribed by law to lease land. Disputes among parties

pertaining to the lease contract and conditions thereof are

to be investigated in civil procedure. Another

interpretation of the provisions of the Law concerning the

land lease would mean the violation of the rights of the

former landowner as well as the principle of equality among

parties to the contract.

In the event that the former landowner does not

desire to conclude said lease contract, he may choose

another way of restoring the rights of ownership as an

alternative. Such possibility to choose does not deny the

principle of the inviolability of property, therefore, Parts

5 and 6 of Article 4 of the Law in dispute do not contradict

the Constitution.

2. On the compliance of the items 14, 15, 16, 17, 18,

and 19 of the Law "On Appending and Amending the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" ", adopted 15 July

1993, by which Article 12 of the Law "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property" of 18 June 1991 has been

appended by items 10, 11, 12, 13, 14 and 15, with the

Constitution of the Republic of Lithuania.

In Article 12 of the Law "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property" of 18 June 1991, which is

entitled "The Buying out of Land" it is established: "Land

required for State needs as well as other land shall be

bought out from persons defined in Article 2 of this Law in

the manner specified in Article 16 of this Law..."

This Article provides for the cases of buying out of

land. The buying out of land regulated by said Article is

not identical to the purchase according to the contract of

sale which is regulated by the norms of civil law. The

contract of sale, in accordance with general principles of

making contracts, is based on the free will and equality of

the parties. Under this contract, the owner himself assumes

the obligation to transfer his property to the purchaser at

a contract price, and nobody can make him conclude this

contract. The notion "buying out", used in Article 12,

actually means the right of the institutions authorized by

the State to adopt a decision not to restore the existing

real property to the former owner provided that there are

appropriate conditions established by the legislator

himself. Buying out of the land is conditioned by the public

interest in it but not by the will of the former owners and

other persons specified in the Law. Buying out is not a

voluntary transferral of one's property but its seizure

compensating for its value. Said persons have only the right

to choose the manner of compensation in the procedure

prescribed by law. In case of disputes pertaining to the

manner of compensation of property or its value, they may

defend their interests in court.

While considering the issues of returning the land to

former owners, facing the system of socio-economic

relations, that was formed during the period of 50 years, is

inevitable. Land-tenure has changed: land areas were planted

with forests; new water bodies came into being; railways and

motor ways were built; the main network of oil and gas pipes

was laid on ; urban areas and land areas covered by

industrial enterprises have expanded; large-scale

specialized units of agricultural production have been built

and are functioning at present. Due to such new

circumstances, the right of the state to regulate the

conditions of the restoration of the rights of ownership, so

that the interests of former owners and public interests

were co-ordinated to the utmost, should not be ignored. The

activity of State and its institutions, trying to establish

the procedure and conditions of the restoration of the

unlawfully terminated rights of ownership, must be based on

the constitutional provisions ensuring the protection of the

rights of ownership and the general welfare of the people.

In item 10 of Article 12 it is established that land

shall be bought out if "it is occupied by orchards, berry-

fields, nursery-gardens, gardens with the installed

irrigation systems of specialized agricultural enterprises.

Such plots may be given back into ownership in kind, without

changing the nature of land use, for the persons who shall

lease it for agricultural enterprises using this land under

the conditions specified in item 9 of said Article.

This norm provides for buying out of land containing

orchards, berry-fields, nursery-gardens as well as gardens

with installed irrigation systems, that belong to

specialized agricultural enterprises. Farming lands of such

agricultural enterprises are formed with reference to

perspective farming using long-term investments. Apart from

irrigation and reclamation systems, other special industrial

objects, such as depositories, refrigerators, equipment for

production processing, etc., are installed in these

companies. Such orchards, berry-fields, nursery-gardens,

gardens along with all the equipment comprise a complete

industrial-technological unit. Therefore, special

technologies, the same means of pest control can be used,

and the cultivation of fruit and vegetables can be

specialized.

Unconditional restoration of land would violate

industrial-technological integrity of existing complexes, it

even can lead to the ruining of all the operation of these

units, so that their useful technological potential would be

left unused. This would impair the public need for

specialized production. The obligation to conclude a lease

contract concerning the land to be returned is established

meeting the interests of the former owner and society. With

regard to the legislator's standpoint that the land must be

used for agricultural purposes, the Constitutional Court

expressed its opinion while resolving the issue whether

Parts 5 and 6 of Article 4, which have been amended by the

Law in dispute, are in conformity with the Constitution.

However, the provision of item 10, that plots of land

"may be" returned is flawed as it creates legal ambiguity.

Such a provision means that the right of the former owner to

restore land in kind may be restricted even in cases when he

agrees to lease land under conditions prescribed by the Law

in dispute. The consent of the former owner to lease shows

that he meets all the conditions established by the Law in

dispute, therefore, it must be evaluated as a juridical fact

ensuring the restoration of the actual land property.

However, in the presence of said provision ("may be"), this

right of the former owner might be restricted by certain

state institutions, officials, or current land users. Such

possibility of subjective decisions contradicts the

provision that the restoration of the rights of ownership is

predetermined only by the conditions established in the Law

"On the Procedure and Conditions of the Restoration of the

Rights of Ownership to the Existing Real Property".

Therefore, the provision of item 10 of Article 12 that plots

of land "may be" restored, contradicts Article 23 of the

Constitution.

In item 11 of Article 12 it is established that land

shall be bought out if it "contains irrigation systems for

overhead irrigation of fodder areas by disposed waters of

cattle-breading complexes".

This norm expresses the legislator's desire to ensure

the functioning of existing cattle-breeding complexes as

special technologies. Such complexes were formed as integral

production systems, the functioning of which cause

ecological problems which must not be ignored. Disposed

waters that appear in the production cycle of cattle

breeding complexes, must be permanently discharged. For

overhead irrigation of such waters plots of land of

appropriate size are needed, on which system of two-way

regulation of humidity regime - pumping stations,

communications of underground pipelines and systems of

overhead irrigation - would be installed. If such special

technology of elimination of disposed waters were not used,

natural environment would be threatened.

The objective situation is such that the industrial-

technological process requires said plots of land with above-

mentioned equipment. Therefore, such plots of land used for

special purposes must necessarily be left near cattle-

breeding complexes, because it is related to the public

demand for the guarantee of ecological protection.

Due to systematic irrigation of land areas, an

appropriate regime of the utilization of irrigated land,

essential limitations on crop rotation must be applied. Upon

restoration of such land to former owners, the interests of

cattle-breeding complexes and individual landowners would

inevitably clash. An attempt to combine those interests may

face objective as well as subjective obstacles, and may

cause disorder in the functioning of the existing

ecologically safe production systems.

While solving the issues concerning the restoration

of the rights of ownership and providing for the buying out

of said plots of land, the legislator took into account not

only economic but also ecological interests of society.

Thereby, the legislator implemented the function of the

State to concern itself with the protection of the natural

environment, established in Article 54 of the Constitution.

Therefore, there is no ground for recognizing that item 11

of Article 12 contradicts the Constitution.

In item 12 of Article 12 it is established, that land

"of forest districts and national parks to be used for the

needs of forestry shall be bought out according to the

standards determined by the Ministry of Forestry".

Item 12 of Article 12 provides for the possibility

not to return the land used for agricultural purposes in

kind provided that this land, in compliance with the

standards determined by the Ministry of Forestry, is

assigned to forest districts and national parks. The

restriction of the restoration of the right of ownership is

related under this item to vague needs of forestry, without

specifying any objective criteria for public interest. The

statement that land not subject to restoration is necessary

for the maintenance of horses needed for work in forests, is

not a convincing argument, because such utitlization of land

may not be regarded as pubic interest. The right to draft

standards for agricultural land to be used for the needs of

forestry, vested in the Ministry of Forestry, is also

groundless. In this case, governmental institution is

entitled to the right to determine the size of plots of land

to be bought out for its own needs. The establishment of new

conditions to be applied in the restoration of the right of

ownership is within the competence of the legislator. The

Ministry of Forestry actually becomes an institution

resolving issues concerning ownership, i. e. it restricts

the rights of the former owners to restore land in kind.

Whereas, land may be seized only upon a specific decision

adopted in compliance with the provisions of the third part

of Article 23 of the Constitution.

Limitations on the restoration of land, set forth in

item 12, are not based on objectively expressed public

interests, therefore, such restriction of the restoration of

the rights of ownership of former owners contradicts Article

23 of the Constitution of the Republic of Lithuania.

In item 13 of Article 12 it is established, that

"land to be bought out in a rural area, shall be used for

the construction of residential houses, common use of

residents or other public needs in accordance with the

settlement-development projects".

In occupation period in Lithuania, upon denial of the

private ownership to land and implementation of

collectivization of agriculture as well as establishment of

large-scale state farms, an appropriate structure of rural

settlements was formed. That period saw the construction of

many new rural settlements. Land, which before occupation

used to be private property, was now used for the

construction of these settlements. At present, the situation

is such, when some land areas that used to be private

property is now built over by residential houses, structures

used for economic, cultural and other social purposes,

therefore, this and other commonly used land in settlements

may not be considered the existing real property and is not

objectively possible to be returned for the former owners.

Due to the economic reform in general, and land

reform taken apart, the perspectives of the development of

rural settlements are subjected to changes as well. They

change in the process of restoration of the rights of

private ownership to land. Therefore, preliminary purchase

of land for the future construction of residential houses in

accordance with settlement-development projects, for common

use of residents or for other public needs, may not be based

on public interest.

Buying out of land in rural settlements according to

the development projects provide for the possibility to

privatize it later, i. e. other persons will be allowed to

acquire it. That would mean, however, the violation of the

right of former owners to restore land.

In conformity with afore mentioned arguments it is

recognized that item 13 of Article 12 contradicts Article 23

of the Constitution.

In item 14 of Article 12 it is established, that

"rivers and lakes belonging to the water fund of the State

and local governments shall be bought out if they are

ascribed to water bodies not subject to privatization in

accordance with the procedure established by the Government

of the Republic of Lithuania".

The legislator, while adopting on 18 June 1991 the

Law "On the Procedure and Conditions of the Restoration of

the Rights of Ownership to the Existing Real Property",

established the conditions which were applied to former

owners while returning inland waters. In item 8 of the

resolution of the Supreme Council of the Republic of

Lithuania "On the Process of Enforcement and application of

the Law of the Republic of Lithuania "On the Procedure and

Conditions of the Restoration of the Rights of Ownership to

the Existing Real Property"" it is determined that: "A

person shall own any lake of the size determined by the

Government of the Republic of Lithuania, water reservoir,

canal, pond, and other surface water body, if it is

surrounded on all sides by his property".

By way of implementing this resolution, the

Government in paragraph 1, item 15 of resolution No 470 of

15 November 1991 established, that the restored area of

afore mentioned waters along with land "must not exceed 5

hectares. In exceptional cases, the restored area may exceed

10 hectares, provided that the Department of the

Environmental Protection of the Republic of Lithuania gives

its consent thereto".

In conformity with earlier formulated provisions of

the legislator, the process of the restoration of unlawfully

terminated rights of ownership and returning of water bodies

to their former owners has already been under way. New

conditions that are determined in item 14 of Article 12

impose even more restrictions on the rights of former owners

who have not restored their water bodies yet.

Only small in size water bodies have been returned.

Therefore, the restrictions imposed on the restoration of

such waters may not be justified by abstract public

interest. In case that such interest is related to a

specific water body, it may, regardless of its size, be

seized only in accordance with the decision adopted under

the provisions prescribed by the third part of Article 23 of

the Constitution.

In item 14 of Article 12, buying out of internal

waters is based on their adherence to the State fund or the

fund of local governments. This adherence of waters does not

manifest public interest. On the contrary, due to this

adherence, the possibility arises to ascribe any water

bodies to this fund, in accordance with the provision that

they are not subject to privatization. Such norm impairs the

rights of former owners to restore water bodies in kind,

therefore, item 14 of Article 12 contradicts Article 23 of

the Constitution.

In item 15 of Article 12 it is established that "land

taken into the state land fund for establishing a farmer's

holding shall be bought out provided that at present it is

leased by persons who are actually engaged in farming and

have structures used for economic activity, but may not

restore this land in kind."

It was the Law "On Farmer's Holding in the Lithuanian

SSR", adopted on 4 July 1989, which at the end of Soviet

period for the first time established the allocation of land

for farmer's holdings. Those who desired to engage in

farming were allotted land free of charge from the land fund

designed for farmer's holdings. This fund appropriated land

from the state reserve, state forest fund, State farms,

collective farms as well as other enterprises and

organizations (Article 7 of the Law "On Farmer's Holding in

the Lithuanian SSR").

Said provisions were not nullified upon the adoption

of the 11 March 1990 Law "On the Provisional Basic Law" in

Article 3 of which it is established that: "Laws and other

legal acts heretofore in force in Lithuania which do not

conflict with the Provisional Basic Law of the Republic of

Lithuania shall remain in effect in the Republic of

Lithuania. With the presence of such norm, Land Code of the

Republic of Lithuania, in accordance with the Law of 5 April

1990, was appended by Article 48-1 providing for the

appropriation land into the land fund designed for farmer's

holdings. Under this Law, plots of land were appropriated

into the fund disregarding the right of ownership of former

owners, although the institute of private property had

already been returned into the legal system of the state.

The allocation of land according to the Law on Farmer's

Holding had not been terminated until the day of the

enforcement of the Law on Land Reform of the Republic of

Lithuania, i. e. until 1 September 1991 (Paragraph 1, item 1

of the Resolution of the Supreme Council "On the Procedure

for the Enforcement of the Law on Land Reform of the

Republic of Lithuania" of 25 July 1991).

The provisions of item 1, Article 8 of the Law on

Land Reform meant , that the citizens, having received land

under the Law on Farmer's Holding, had to buy out or lease

from the State an additionally acquired plot. Such

provisions show that the State took the obligation to

protect the rights of citizens who had acquired land

according to the Law on Farmer's Holding, and to pay an

appropriate compensation for the former owners.

Thus, the State by laws provided the conditions for

persons who acquired land into the ownership under the Law

on Farmer's Holding, to settle on this land, engage in

farming, as well as to have various structures there.

Failing to provide the possibility for the State to buy out

such land from the former owners, the contents of legal

relations already regulated by laws, would be changed. That

would mean retroactive validity of Article 12 of the Law "On

the Procedure and Conditions of the Restoration of the

Rights of Ownership to the Existing Real Property" of 18

June 1991, because it would be applied to juridical facts

and legal consequences which appeared on the basis of the

Law on Farmer's Holding. Item 15 of Article 12 has

eliminated the clash of laws, therefore it does not

contradict the Constitution.

Conforming to Article 102 of the Constitution of the

Republic of Lithuania as well as Articles 53, 54, 55 and 56

of the Law on the Constitutional Court of the Republic of

Lithuania, the Constitutional Court has passed the following

ruling:

To recognize that concerning the Law of the Republic

of Lithuania "On Appending and Amending the Law of the

Republic of Lithuania "On the Procedure and Conditions of

the Restoration of the Rights of Ownership to the Existing

Real Property" ", adopted 15 July 1993:

1) those parts of item 3, by which Parts 5 and 6 of

Article 4 of the Law "On the Procedure and Conditions of the

Restoration of the Rights of Ownership to the Existing Real

Property" of 18 June 1991 have been amended, do not

contradict the Constitution of the Republic of Lithuania;

2) the provision "may be" of item 14, by which

Article 12 of the Law "On the Procedure and Conditions of

the Restoration of the Rights of Ownership to the Existing

Real Property" of 18 June 1991 has been appended by item 10,

contradicts Article 23 of the Constitution of the Republic

of Lithuania. Other provisions of this item do not

contradict the Constitution of the Republic of Lithuania;

3) item 15, by which Article 12 of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991 has

been appended by item 11, does not contradict the

Constitution of the Republic of Lithuania;

4) item 16, by which Article 12 of the Law On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991 has

been appended by item 12, contradicts Article 23 of the

Constitution of the Republic of Lithuania;

5) item 17, by which Article 12 of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991 has

been appended by item 13, contradicts Article 23 of the

Constitution of the Republic of Lithuania;

6)item 18, by which Article 12 of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991 has

been appended by item 14, contradicts Article 23 of the

Constitution of the Republic of Lithuania;

7)item 19, by which Article 12 of the Law "On the

Procedure and Conditions of the Restoration of the Rights of

Ownership to the Existing Real Property" of 18 June 1991 has

been appended by item 15, does not contradict the

Constitution of the Republic of Lithuania.

This Constitutional Court ruling is final and not

subject to appeal.

The ruling is promulgated on behalf of the Republic

of Lithuania.

Justices of the Constitutional Court:

Algirdas Gailiūnas	Kęstutis Lapinskas

Zigmas Levickis	Pranas Vytautas Rasimavičius

Stasys Stačiokas	Teodora Staugaitienė

Stasys Šedbaras	Juozas Žilys