The Constitutional Court of the Republic of Croatia
(hereinafter RC Constitutional Court) chaired by Jadranko Crnić, president of the Court,
and judges Zdravko Bartovčak, dr. Velimir Belajec, Dr. Nikola Filipović, Ante Jelavić
Mitrović, Mr. Vojislav Kučeković, Jurica Malčić,
Mr. Hrvoje Momčinović, Ivan Marijan Severinac, Milan Vuković and Mladen Žuvela, in a
procedure to establish the constitutionality and legality of the Act on Compensation for
the Property Seized During the Yugoslav Communist Rule, at the session held on 21
April 1999, passed the following
DECISION AND RESOLUTION
1. Following the claim are annulled, and following the petition to
start a procedure to establish the constitutionality, the following provisions of the Act
on Compensation for Property Seized During the Yugoslav Communist Rule (hereinafter: The
Compensation Act), The Official Gazette, hereinafter OG, NO. 92/96, shall not apply:
a) Article 9, Paragraph 1.
"The provisions of this Act are granted to physical person - a former owner,
that is, to lawful heirs by first descent (hereinafter: former owner), that on the
day this Act entered into force held Croatian citizenship."
A part that defines: "that on the day this Act entered into force held
Croatian citizenship" shall not apply;
Article 11, paragraph 1.
"The provisions of this Act are not granted to foreign physical and
legal persons."
The part that defines: "...physical and," shall not
apply;
Article 11, paragraph 2.
"As an exception from the provisions in Paragraph 1 of this Article, the
rights granted by this Act shall also be granted to foreign physical and
legal persons if so determined by the international agreements."
The part that defines: "...physical and," shall not
apply.
b) Article 29, Paragraph 1.
"In the event of the subsequent real legal management with a purchased
apartment, former owner holds the first right to purchase."
This Article is completely annulled.
c) Article 65, Paragraph 3.
"Former owner shall file a claim no longer than six months after this Act
entered into force, except in case specified in Article 26 of this Act."
The provisions specifying the terms for filing claim by a former owner, when they
concern former owner - a foreign physical person, shall not apply.
Article 65, paragraph 4.
"A claim filed after the specified term in paragraph 3 of this Article is
groundless, and claimant shall lose all rights provided by this Act."
The provisions specifying consequences in case when the claim has not been filed on
time, if they refer to former owner - a foreign physical person, shall not apply.
2.
a) A petition for a procedure to establish the constitutionality of the
Compensation Act shall be repealed as inapplicable:
- in section disputing the enactment procedure of the Compensation Act
(formal unconstitutionality);
- in relation to Articles 1, 2, 3, 7, 9 (in relation to a section that is not
invalidated), 12, 16, 17, 19, 21, 22, 57 and 63.
b) The following proposals for a procedure to establish the constitutionality of the
Compensation Act are abjured:
- the proposals that dispute the Compensation Act in general, except those provisions
not referred to in a text as being annulled;
- the provisions of Articles 1, 2 3, 4, 6, 7, 9 (section that is not annulled), 12, 14,
16, 17, 19, 21, 22, 23, 24, 25, 26, 27, 28, 29 (section that is not annulled), 30, 31, 32,
33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 48, 49, 50, 51, 52, 53, 54, 55,
56, 57, 58, 59, 60, 61, 63, 66, 67, 77 and 79.
3. The overruled legal provisions in paragraph 1 a), b) and
c) shall be null and void pending issuing and enacting of an act by the Croatian State
Parliament that will promulgate new provisions to replace those overruled, no later than
one year (1) after this Decision and Resolution is promulgated in the Official Gazette.
4. This Decision and Resolution shall be published in the
Official Gazette.
EXPLANATION
I.
(1) Pursuant to Article 13, alinea 2 of
the Constitutional Law on the Constitutional Court of the Republic of Croatia (OG No.
13/91, hereinafter Constitutional Law) the 24 Representatives of the House of Županije of
the Croatian State Parliament have submitted a proposal for the procedure to
establish whether the Compensation Act confirms with the RC Constitution.
(2) Under the provisions of Article 15, Paragraph 1 of the
Constitutional Law proposals for the procedure to establish the constitutionality of the
Compensation Act, have submitted the following persons: A.
Miličević from Makarska, M. Turković and others from Zagreb, Š. Pavlović from Zadar, I. Heim from Zagreb, V. Duplančić from
Split, A. Nakić from Šibenik, Z. Ljubičić and
others from Zagreb, E. Valić from Split, V. Kristl
from Hamburg, M. Grisgono from Split, P. Korčulanin from Dubrovnik, M. Gašparović from Karlovac, H. Huptfeld from Karlovac, Dr. V. Jenko
from Rijeka, R. Dorić from Split, M. Mance from Varaždin, S. Lazar and others from
Varaždin, SUVLAH: S. Lazar for Varaždin Association, S. Lazar and 77 others, SUVLAH
Varaždin, Varaždin Association for Property Return, Split-Makarska Bishopric represented
by lawyer M. Vukasović, Zagreb-Ljubljana Orthodox
Eparchy - The Board of Trusties of the Eparchy and Serbian Orthodox Church Borough in Zagreb and others (16 claimants),
The Jewish Borough Zagreb, The Tenants' Association
Zagreb, D. Štimac from Zagreb, M. Mojsović, Lj.
Salveter, M. Matijević-Krstić, Dr. M. Ribić from Zagreb, D. & M. Zubović from
Zagreb, M. Stanić from Rijeka, D. Urbanetz-Linderholm
represented by lawyer Dr. Z. Zaninović, I. Jelčić and others represented by lawyer Dr.
Z. Zaninović, B. Hrženjak represented by lawyer A. Vukorepa, N. Kršinić from Zagreb, lawyer M. Očić from Zagreb, S. Ružić from Rijeka, V. Korenčić from Zagreb, Lj. Zubić from Zagreb, Š. Mrkonjić from Zagreb, The Barristers' Association Porobija-Porobija, D. Visina I B. Tomažić, J. Nest
from Split, J. Juras and others from Omiš,
Association for Property Return, S. Bambir from Zagreb,
T. Uroda from Zagreb, l. Teofilovich, Ž. Petričić, Society for Denationalization Split,
Dr. B. Božinović from Split, Dr. S. Kukolja from Lynchburg and the Croatian Tenants
Association from Zagreb.
(3) Several proposals dispute the constitutionality of the entire
Compensation Act, that is, the provisions referring to compensation for and restitution of
seized property.
(4) The singled out disputed provisions of the Compensation Act listed
in claims and proposals refer to the following articles: 1, 2, 3, 4, 6, 7, 9, 11, 12, 14,
16, 117, 19, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39,
40, 41, 42, 43, 44, 45, 46, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 63,
66, 67, 77 and 79.
(5) The claim register under which the Court settles proposals of the
listed claimants, and a concise reference of the specifically disputed articles of the
Compensation Act by the listed claimants, shall be found in chapter IV and onward of this
Explanation.
II.
(6) Pursuant to Article 18 of the
Constitutional Law, S. Ružić, S. Lazar and Dr. Lj. Zubić, V. Korenić, M. Mance and
others, SUVLAH Zagreb, Varaždin and F. Grošinić and
others, have submitted proposals to temporary suspend the implementation of the disputed
Compensation Act.
(7) These proposals the Court has settled in the Resolution issued on
23 January 1997, under Reg. Nos. U-I-756/1996, U-I-768/1996, U-I-924/1996, U-I-925/1996,
U-I-926/1996, U-I-927/1996, U-I-933/1996, U-I-941/1996, U-I-955/1996, U-I-771/1996,
U-I-19/1997. The proposals were abjured, and this Decision was promulgated in the Official
Gazette No. 8/97.
(8) In the procedure No. U-I-139/1998,
the Court has rejected the claim to exempt Jadranko Crnić, the President of the Court,
Mladen Žuvela, vice-president of the Court, and judge Dr. Nikola Filipović.
(9) The claimant, Josip Sabljić
(U-I-685/1996), has since withdrawn his proposal for a procedure to establish the
constitutionality of the Compensation Act, and therefore, the procedure regarding this
case has been adjourned.
III.
(10) In a proposal to determine the constitutionality of the disputed
Act (U-I-673/1996), the claimants foremost refer to an alleged unconstitutionality, or
rather, the formal transgressions in the course of the Compensation Act's enactment
procedure.
(11) The claimants dispute the following violations in the course of
this Act's enactment procedure:
(12) Pursuant to Article 81 alinea 2 of
the Constitution, the House of Županije shall discuss and pronounce opinions related to
any matter within the sphere of duty of the House of Županije.
(13) Pursuant to the provisions of
Article 81, alinea 3 of the Constitution, the House of Županije shall submit to the House
of Representatives preliminary opinion concerning an enactment procedure for those
laws that regulate national rights, and define citizens human rights and freedoms provided
for in the RC Constitution.
(14) At the session held on 19 June 1996
the House of Županije promulgated the preliminary opinion regarding the Act on Return of
and Compensation for Seized Property.
(15) However, the House of Representatives of the Croatian State
Parliament, at the session held on 11 October 1996, voted into force the Act on
Compensation for the Property Seized During the Yugoslav Communist Rule, for which the House of Županije did not issue the preliminary opinion
pursuant to Article 81 of the Constitution.
(16) Taking into account not only the different title, but textual
differences, the claimants allege that the adopted law is in fact - an entirely different
law.
(17) The Rules of Procedure of the House of Representatives of the
Croatian State Parliament (OG No. 55/95) recognize such a possibility that following an
act's enactment the text might be significantly changed, but do not require, that in such a case, it ought to be returned to the House of Županije for
deliberation.
(18) In this context, Article 83 of the Rules of Procedure provides
the following:
"The president of the House of Representatives, no
later than one day after the law has been enforced in the House of Representatives, shall
deliver the enforced law to the president of the House of Županije.
Exceptionally, and provided that after the enactment of the amended text the final
law proposal is significantly changed, the president of the House of Representatives shall
deliver an enacted law no later than two days after its enforcement."
(19) Their arguments against an enacted law the Representatives shall
express, pursuant to Article 83 of the Rules of Procedure that directs that the decision
on returning an enacted law to the House of Representatives for further reading shall be
decided by a working body of the House, or, one third of the House Representatives, as has been done in relation to the disputed
act. However, the House of Županije had dismissed the Representatives' proposal.
(20) Such a proposal shall be promulgated
in the House of Županije in compliance with Article 87 of the Rules of Procedure:
"After the House debate, a decision on issuing the decision on returning a law for
further reading to the House of Representatives shall be issued."
(21) In the Opinions issued on 13
February 1996 and on 20 June 1996 the House of Županije thereby endorsed the
enactment of the Compensation Act and the subsequent amendments.
(22) The House of Županije has informed
the House of Representatives of the Croatian State Parliament that the House of Županije
did not issue a decision on returning the Compensation Act to the House of
Representatives for further reading.
(23) The Constitutional Court has reached a conclusion that the Act
entered into force in accordance with the provisions of the Constitution and the Rules of
Procedure of the both Houses of the Croatian State Parliament, and there were no formal
violations in the disputed Act's enactment procedure.
(24) Therefore, the claimants demands concerning the above issue -
i.e. respect for the provided constitutional enactment procedure in issuing the disputed
act - are groundless.
(25) 1/1. The Republic of Croatia, in accordance with the State's
continuity and succession from the former Socialist Republic of Croatia and the former
Socialist Federal Republic Yugoslavia, has in principle adopted regulations and other acts
of these two states, pending issuing of the new laws, or rather, until these are conformed
with the Croatia's own legal system. Under the provisions of Article 4 of the
Constitutional Law on the Implementation of the Constitution of the Republic of Croatia
(OG No. 110/96) laws, other regulations and general acts must be conformed with the
Constitution no later than 31 December 1997 (the same provision appears in all earlier
amendments and supplements of the Constitutional Law, taking into account that the
conforming terms refer to other amendments (OG Nos. 56/90, 8/91, 59/91, 27/92, 34/92,
clarified text 91/92, 62/93, 50/94 and 105/95).
(26) The same reaffirms Article IV paragraph 2 of the Constitutional
Decision on Sovereignty and Independence of the Republic of Croatia (OG No. 56/90).
Pursuant to this article, in the Republic of Croatia in force are only laws adopted by the
Parliament, and until the secession is completed, federal laws that were not repealed.
(27) These comprise those regulations and other acts which were
enforced to seize - in a formally legal although unfair manner - the original owners'
property during the Yugoslav communist rule.
(28) Through these expropriations the original owners have lost their
ownership rights over things, that is, their rights over other holdings, and this
fundamental legal fact, also advocates the Republic of Croatia. The Act on Compensation
for Property Seized During the Yugoslav Communist Rule, as emphasized in Paragraph 1 of
Article 1 of this Act, derives from the above mentioned fundamental fact:
"This Act regulates the conditions and procedures relating to compensation for
property seized from the original owners during the Yugoslav communist regime, that was
transformed into public, communal property, or, into societal or conjoint ownership
(herein after communal property) through confiscation, nationalization, agrarian
amelioration and other regulations and procedures provided for in this Act."
(29) The Compensation Act does not annul (ex tunc) all regulations and
acts on property expropriation (nor does it grant to owners an uninterrupted ownership
title or other rights from the moment of expropriation). However, going from the actual
legal and factual conditions, it attempts to regulate a volume of and presuppositions for
the restitution of and compensation for expropriated property.
(30) It should be mentioned that the Compensation Act has much wider
capacity than its tile implies. Chapters 3 and 4 of Article 2 of this Act specifies that
compensation provisions shall also apply to property that owners had to abandon in the
course of occupation, and to these seized by occupiers and their assistants. This means
that this Act provides compensation for property that was expropriated prior to, and not
only during Yugoslav communist rule (see chapter 3/1 and 3/2 of the explanation).
(31) Application of compensation volume the Legislator is widening to
those properties that were seized without any legal grounds or without grounds specified
in the legal regulations (paragraph 2, Article 2 of the Compensation Act), though, in
these cases, application of the provisions relating to general ownership regulations might
be more advantageous.
(32) 1/2. Opposite view in one of the proposals (U-I-933/1996), that
is, that original owners are still the legal owners of property of which they were
deprived, this claimant bases on the following invalidated provision in Article 9a,
paragraph 2 of the Constitutional Law for the Implementation of the RC Constitution from
1991 (OG No. 8/91 and 31/91):
"The federal laws, other regulations and other acts of the federal organs that do
not conform with the RC Constitution and the laws of the Republic of Croatia are thereby
null and void in the Republic of Croatia."
(33) This provision, although neglected in an amended text of the
Constitutional Law (OG No. 34/92), was also omitted in the amendments and supplements of
the constitutional laws that entered into force herein after, and it is thereby null and
void (OG No. 91/92, 62/93, 50/94, 105/95 and 110/96).
(34) The cited proviso on amending and supplementing the
Constitutional Law from 1991 cannot affect the established legal standpoint. While in
effect, it was exempting from actual application certain earlier regulations that were not
compliant with the legal system in the Republic of Croatia; however, it did not provide
for abolishment of the legal consequences of these regulations, that took place when they
were in force in the former SFR Yugoslavia and SR Croatia. Anyhow, these regulations are
largely consumed, so today we can no more speak about their actual applicability.
(35) 1/3. The legislative system of the Republic of Croatia does not
recognize or acknowledge the institute of communal property, consequently, the
Constitution provides for and guarantees the inviolability (of individual) of property
that belongs to particular physical (individual, ed.) or legal (company, ed.) person
(Article 3 of the Constitution: the inviolability of ownership is, among other, one of the
highest values of the constitutional system in Croatia; paragraph 1, Article 48 of the
Constitution: the right of ownership is guaranteed). In view of that, the so-called
communal property - directly, based on legal regulations or within various privatization
procedures - has been turned into the State?s property, property of local self-governments
and administrations, companies, institutions and other physical and legal persons.
(36) Accordingly, the Compensation Act is establishing certain
physical or legal persons within whose property belongs property that should be restored
to former owners: the Croatian Privatization Fund that shall pay compensation for seized
property in securities or shares, and the Seized Property Compensation Fund that shall pay
compensation for seized property in currency or with RC bonds (Article 13).
(37) 1/4. Thereby, the numerous complains filed by persons demanding
and proposing a judgment of the constitutionality are unfounded. Especially those alleging
the unconstitutionality of Article 1-3 of the Compensation Act (but also others connected
with it), based on the assumption that the former owners still hold their former rights.
As already explained (in chapter 1/1/ of this Decision), laws and legal acts that entered
into force during the Yugoslav communist regime had disowned former owners of their
ownership, or, the various ownership rights, and therefore, these rights - since they do
not exist any more - could not be violated by the enactment of the Compensation Act.
Therefore, those litigations which are challenging the constitutional rights pursuant to
chapter 1 of Article 48 and chapter 1 of Article 50 of the Constitution are unfounded
(only under the law it is possible, in interest of the Republic of Croatia, to limit and
repeal ownership by paying a market value price).
(38) These proposals allege that (only) the disputed Compensation Act
provides for expropriating former owners? property once over; that this Act legalizes new
expropriations that are taking place without owners? consent or will to part from their
property, an act of imposing a handicap in a will; that the State is falsely acting as
owner of such property, since the former state was expropriating property contrary to
chapter 1 of Article 48 and chapter 1 of Article 50 of the RC Constitution; that the State
manipulates with property against the will and consent of lawful owners, and that the
State acts as a real estate agent who also determines property price, thus taking over the
rightful owners? status; that the State restores property to some and not to the others;
furthermore, that the State acts as an owner of property that it does not possess; that
the State is not in possession of nationalized property because it did not obtain that
property in legitimate way, and therefore, it cannot sell it; that the Act deceitfully
uses the term "former owner," so all provisions that are using this term have
been disputed (Indictment No. U-I-756/1996, U-I-768/1996, U-I-771/1996, U-I-924/1996,
U-I-925/1996, U-I-926/1996, U-I-927/1996, U-I-933/1996, U-I-941/1996, U-I-955/1996,
U-I-139/1998 and others).
(39) 1/5. The RC Constitution, enacted on 22 December 1990, is being
applied only to those legal actions that occurred after its promulgation and entering into
force.
(40) Although legal acts of the former SFR Yugoslavia and SR Croatia
referring to property expropriation are unquestionably incompatible with the fundamental
principles and rules concerning the protection of human rights provided for in the
Constitution, the Constitution has no relation with them whatsoever. The provisions of the
RC Constitution do not apply directly to legal acts of the former state, nor can their
constitutionality be judged through the provisions of this Constitution, provided they
were not transferred into the legal system of the Republic of Croatia by the Act on
Adopting the Federal Laws (OG 53/91).
(41) The Compensation Act is not incompatible with the Constitution
just because it does not fully provide for the rights of former owners; the
constitutionality or unconstitutionality of its provisions should be established through
the provisions of the effective Constitution, and not in comparison with the unjustifiable
or ideologically motivated laws of the former regime.
(42) 2/1. Considering these cardinal issues - and this also pertains
to disputing of many other provisions of the Compensation Act - we underline that the RC
Constitution does not provide for denationalization, that is, restitution of or
compensation for expropriated properties.
(43) Consequently, its direct constitutional-legislative obligation to
legally regulate the compensation for seized property, or rather its restitution, is nil.
Issuing of regulations and those issues referring to the assessment of compensation volume
or property recovering, depend entirely on the Legislator?s own will and judgment, thereby
these provisions are not commonly liable to an assessment of their constitutionality.
(44) 2/2. Furthermore, neither is the State under an appropriate
international legal obligation nor international law provides for the restitution of
expropriated property, that is, methods, volume or an amount of compensation for such
property.
(45) The following parties: U-I-768/1996, U-I-924/1996, U-I-925/1996,
U-I-926/1996, U-I-927/1996, U-I-933/1996, U-I-957/1996, U-I-121/1997, are presuming that
the following international agreements and other international acts can support their
claims: Universal Declaration of Human Rights (Articles 2, 10 and 17), International
Covenant on Civil and Political Rights (chapter 1, Article 2 and Article 26),
International Covenant on Economic, Social and Cultural Rights (Paragraph 2, Article 2),
European Convention for the Protection of Human Rights and Fundamental Freedoms (chapter
1, Article 6 and Article 14), Document of the Copenhagen Meeting of the Conference on the
Human Dimension of the CSCE (Article I/5.9) and Declaration on the Protection of
Fundamental Rights for Victims of Crime and Misuse of Power, and Annex, Paragraph 19 and
21).
(46) 2/4. These international documents do not specify anything
whatsoever that concerns restoration of or compensation for expropriated property, but
provide general guidance to ensure equality of people, prevention against discrimination
and public and fair trials before courts of law. Thereby, those claims that are supported
by these provisions in connection with the provisions of Article 1-3 of the Compensation
Act, are without any legal grounds. The only exception is Paragraph 19 of the Annex of the
Declaration of Fundamental Principles for Victims of Crimes and Misuse of Power that
instructs states to consider incorporating the provisions on punishment for misuse of
power and provide suitable legal measures for victims of misuse of power into their
national laws, especially "...return and/or compensation and necessary material
and psychological support..." Nonetheless, this provision too is general in
character, and it is not incompatible with the provisions of the Compensation Act.
(47) The cited provisions are wholly incorporated into the provisions
of the Constitution in Articles 14 (freedom from discrimination and equality before law),
Article 26 (equality of citizens and foreigners before courts of law and other bodies) and
alinea 1 of Paragraph 1, Article 29 (the right to a fair trial, that according to this
Court?s opinion is applicable to all legally regulated actions, and not only to court
procedure).
(48) Therefore, referring to the mentioned international documents for
that purpose (especially in connection with Articles 1 to 3) is meaningless, and possible
violations of the constitutional right to equality shall be discussed in the following
text together with the suitable objections of those litigants who had filed complaints and
proposals.
(49) We should mention, that only those international agreements which
have entered into force, and that are agreed upon and ratified in conformity with the RC
Constitution, and promulgated, partake in the legislative system of the Republic of
Croatia and hold a legal power above laws (Article 134 of the Constitution), so they
themselves directly formulate the interchangeable rights and obligations between the State
and citizens, and other legal subjects. Other international acts, especially declarations,
do not have a direct legal effect on citizens and other legal subjects, but provide an
obligation for the Republic of Croatia to incorporate the provisions of these acts into
her laws, other regulations and the State?s offices practice.
(50) This also pertains to the "Conditions for Accepting the
Republic of Croatia into the Council of Europe" of 15 March 1996, that claimants in
the case U-I-121/1997 name in their Proposal.
(51) 2/5. Not one transitional country in which the denationalization
is being legally regulated and effected (in a broadest sense) holds the economic power to
provide for natural restitution of all seized property (if this was legally and
realistically feasible) and to compensate for all damaging consequences of these
deprivations. Because of that, in all national laws relating to denationalization appear
identical limitations (in different substance and degree), especially those referring to
the line of lawful successors (heirs) that shall have restored to them and to be
compensated for property which cannot be restored to them, and extent of such
compensations.
(52) All laws (therefore, the Compensation Act too) are based on the
fundamental principle that the amending of old wrongs should not provoke new, weighty
injustice. All principal provisions of the Act derive from compromises and from the
conflicting rights and interests of former owners, occupants holding the acquired rights
over seized property and economic and other interests of the State and society. Because of
that - and especially having continually in view the significant time lapse from the
moment when property was expropriated - the absolute justice and equality among subjects
who are successors in a property compensation process, that is, restitution, is
unfeasible.
(53) With the same objective in mind were issued some other laws that
are attempting to amend the wrongdoing caused during the Yugoslav communist rule, for
example, the Political Prisoners Act (OG, clarified text, No. 34/95).
(54) The claimants allege that an illogical and impertinent sequence
of issuing the particular laws (for example, the Privatization Act, OG No. 21/96 and
71/97, the Act on Transformation of Communal Companies, OG No. 19/91, 83/92, 84/92, 94/93,
2/94, 9/95, 21/96), before the Compensation Act has entered into force, has substantially
diminished prospects for natural restitution of seized property to former owners, since
under these laws the seized property is already given to other title holders. However, in
such cases the problem is not whether the Compensation Act conforms with the Constitution,
but in dissimilarities or incompatibilities between particular laws, and those subjects
the Constitutional Court neither can judge nor sanction within its competence.
(55) 2/6. In that context, the system of legal regulations on
compensation for and restitution of property seized during the Yugoslav communist rule and
its principal provisions, as a whole, are not the subject to a procedure to establish
their conformity with the Constitution. It is not within competence of the Constitutional
Court to decide to whom and in which volume the rights for compensation for or restitution
of seized property shall be granted, since the State is not under the constitutional
legislative obligation whatsoever to legally settle these issues. The Constitutional Court
cannot decide whether the State has an economic power, and in connection with this, in
which volume and in which way compensation for or restitution of seized property was
supposed to be settled, which political issues or which interest groups should have had a
certain priority (for example, in a conflict between former owners and later occupants
over their rights relating to seized property). And finally, the Constitutional Court has
no authority neither to arbitrate relationships between other obligations of the State
(for example, concerning refugees and displaced persons and other victims of war, country?
reconstruction after war, pensioners problems, and other), nor the State?s political and
moral (but not legal) obligations to settle under the law the modalities for compensating
for seized property or its restitution.
(56) The compensation settlement for or restitution of seized property
is therefore under exclusive competence and responsibility of the Croatian State Sabor.
Whether the compromising stands, perceivable in the Compensation Act, are a result of an
accurate apprehension of all facts mentioned above and other relevant circumstances, the
time shall show.
(57) 2/7. To judge the constitutionality of particular provisions of
the Compensation Act is possible, however, only if within a framework of adopted
compensation or restitution system a particular group of potential compensation receivers
has been wrongly left out (that is, discriminated), or, if some of the constitutional
rights were wrongly denied or limited (that is, if this limitation is complying with law?s
purpose), if all interested subjects were not given an opportunity to participate in a
particular procedure, were not treated fairly or permitted to utilize all available legal
means.
(58) 3/1. The case U-I-121/1997 contests the constitutionality of the
provisions of Articles 1 to 4 of the Compensation Act, alleging that they do not provide
for restitution, that is, compensation for property seized during the fascist regime,
thereby violating Articles 3 and 5 (that proclaim the universal provision of
constitutionality and legality), Article 14 (on equality of all people, especially before
law), Paragraph 1 of Article 48 and Paragraph 1 of Article 50 of the Constitution, and the
constitutional provision in Paragraph 2 of Article 41 pledging the State?s protection and
support for religious communities.
(59) 3/2. The Compensation Act?s title refers to property seized
during the Yugoslav communist rule. However, its content is wider and includes, in an
indirect way, the property deprivation suffered earlier, that is, during the fascist rule.
(60) Paragraphs 2 and 4 of Article 2 of the Compensation Act regulate
compensation for seized property on the territory of the Republic of Croatia also on a
basis of the provisions of the Act on Regulating Property that Owners Were Forced to
Abandon During Occupation and Property that was Seized by Occupiers and their Assistants
(OG DFY No. 36/54) and on a basis of the Act on Enacting and Amending this Act (OG FNRY
No. 64/46, 105/46, 88/47 and 99/48). According to the provisions of these Acts seized
property should have been returned at once, however, there were also significant
exemptions when property was not to be returned, but instead it became the State?s
property.
(61) The Compensation Act in the mentioned provisions keeps in sight
these exemptions when the property, which in principle had to be returned, was definitely
seized from the owners based on the Yugoslav legislative regulations. The restitution of
property seized during the fascist rule was in a larger part, therefore, settled
heretofore by the Yugoslav laws. In those cases when Yugoslav laws did not provide for
restitution of such property, the restitution, or rather, compensation for this property
provides the Compensation Act. This indicates, that the dispute over property seized
during the fascist rule is completely settled.
(62) Claimants? allegations that the Compensation Act does not provide
for restitution of or compensation for property seized during the fascist rule are thereby
groundless.
(63) 4/1. Many proposals dispute the constitutionality of those
provisions of the Compensation Act that refer to confiscated property, alleging they
create inequality between citizens, because some shall have in principle their
(confiscated) property recovered to them, and others will get compensation (for property
seized through nationalization or otherwise). This allege the following claimants:
U-I-764/1996, U-I-768/1996, U-I-771/1996, U-I-924/1996, U-I-925/1996, U-I-926/1996,
U-I-927/1996, U-I-933/1996, U-I-160/1997, U-I-881/1998, U-I-185/1999 and others.
(64) They dispute the constitutionality of Articles 1, 4, 22, 24, 25,
29, 30, 32, 39, 45 and 48 of the Compensation Act, and allege that they are incompatible
with Articles 3, 5, 14 and 20 (liability of everyone who violates the provisions of the
Constitutional Law on Human Rights and Freedoms), Article 26 (on equality of citizens and
foreigners before courts of law and other bodies), Article 31 (that no one can be punished
before being charged), Article 35 (on guaranteed legal protection of everyone's personal
and family life, dignity and honor) and Articles 48 and 50 of the Constitution.
(65) 4/2. The former owners can reclaim confiscated property (or get
compensation for property which cannot possibly be restored to them) only under the
following conditions: property was confiscated by the court?s decision in a criminal
litigation and the sentence called for confiscation of property, or, property was
confiscated as a protective measure pertaining to verdict; if it concerns court sentencing
in the former Yugoslavia from 15 May 1945 to 25 June 1991; if it concerns political
sentencing or politically motivated criminal acts; if sentencing was instigated by misuse
of law or political power (Paragraph 4 of Article 1 and Paragraph 1 of Article 4 of the
Compensation Act).)
"The misuse of law or political power applies to those cases that in a sentencing
text or during a preceding procedure violate internationally recognized principles of
legal state and democratic society, or are contrary to the legislative system of the
Republic of Croatia." (Paragraph 2, Article 4 of the Compensation Act).
(66) 4/3. Therewith, the discrimination and breach of principles on
equality do not subsist, provided that the different rights and unequal positioning of
citizens are justified in the course of serious political, legal or moral issues. Those
citizens whose property was confiscated were generally suffering greater misfortune than
those whose property was seized on other grounds. They were also sentenced and punished
for criminal acts that, by character or definition of a preceding trial, contradict the
standards of civilized legal state.
(67) The legislator had authority to determine - judging by
priorities, or rather, by the weight of affliction suffered and an adequate satisfaction
level - a manner and volume of property de-confiscation, as provided for in these
provisions.
(68) Thus, these provisions (nonetheless others that claimants refer
to in connection to this) are not incompatible with the Constitution. They are also
compliant with the fundamental provisions of the Annex of the Declaration on the
fundamental principles of justice for victims of crime and misuse of power, Paragraph 19
thereto.
(69) 4/4. Paragraph 1 of Article 22 dispute claimants U-I-715/1996,
U-I-764/1996, U-I-185/199 and others, because it does not protect confiscated property
pursuant to the Act on banning transfer of the rights to occupy and utilize certain real
estate in communal property to other users, or, into ownership of physical (individual)
and legal (companies) persons (OG Nos. 53/90, 61/91, 25/93 and 70/93).
(70) The disputed article does not provide for a ban of transfer, but
other mentioned acts comprise these provisions, so this complaint against the
unconstitutionality cannot be applied to the Compensation Act. A procedure to establish an
eventual non-compliance of the Compensation Act with other acts, is not within the
Constitutional Court competence.
(71) 4/5. Claims U-I-715/1996, U-I-881/1998 and U-I-29/1999 dispute
the constitutionality of procedure to determine property that is confiscated and which has
to be restored to former owners (Paragraph 3 of Article 4 and Articles 32-39 of the
Compensation Act). It is alleged, that the procedure for rehabilitating persons who were
sentenced for a political offense must be processed in compliance with enacted laws; that
an administrative procedure by a local government (a municipal office where the property
is situated, Paragraph 2 of Article 64) cannot change the final and authorized courts?
decision, and that local administrative offices cannot be given authority to issue
judgments and decisions which have far-reaching consequences for the tenancy right
holders, if they are not allowed to participate in these procedures. This violates the
Constitutional provisions mentioned in the above paragraph of this text.
(72) The disputed Paragraph 3 of Article 4 of the Compensation Act
rules that all decisions on restitution of or compensation for confiscated property, under
the conditions provided by this Act, shall be issued after having obtained the opinion of
the State Attorney of the Republic of Croatia, and in problematic cases, the claimant that
seeks to reclaim property shall be advised to start a procedure for sentence annulment in
accordance with the enacted legal provisions.
(73) The allegations that cited provisions grant to administrative
offices an authority to change the enacted court decisions are groundless. The sentence
shall stay in force, regardless of the decision on restoring confiscated property issued
by an authorized municipal office, as long as former owner, through a regular court
procedure, does not achieve its annulment or modification.
(74) As provided by the provisions of the General Administrative
Procedure Act (OG No. 53/91, the Compensation Act grants to municipal offices the
authority to settle on their own compensation for or restitution of seized property,
unless law provides otherwise (Article 68). This authorizes municipal offices also to
settle the so-called preceded (prejudicial) issues (Articles 144-148 of the General
Administrative Procedure Act), including a question whether this identifies a concrete
procedure concerning confiscated property under Paragraph 1 of Article 4 of the
Compensation Act. Under the general rules to settle the preceding issues, an
administrative organ does not have to settle this question, but can advise the party
(former owner) to annul conviction through an appropriate court procedure.
(75) Therefore, the provisions mentioned in paragraph 4/5 of this text
are not incompatible with the Constitution.
(76) 4/6. In accordance with Article 49 of the General Administrative
Procedure Act the parties in an administrative procedure, besides a person who initiated
procedure or against whom the procedure takes place, are also those (third party) who in
protection of their rights or legal interests have the right to participate in a
procedure. Consequently, a question whether the tenancy right holders can participate in a
de-confiscation procedure is not challenging the constitutionality of the cited
provisions, but their interpretation.
(77) The result of an administrative procedure for restitution of
confiscated property determines the potential right of the tenancy right holders to
purchase an apartment under the provisions of the Act on selling apartments under the
tenancy right (OG No. 43/92, clarified text No. 69/92, 25/93, 48/53, 2/94, 44/94, 58/95).
Therefore, the Court rules that pursuant to the cited legislative provisions the tenancy
right holders could be a party in the first-stage administrative procedure for restitution
of confiscated buildings and apartments, that they could appeal the first-stage decision
(Article 71) and file an administrative appeal against the final administrative decision..
(78) 5. Lawsuit No. U-I-126/1997 disputes the constitutionality of
Article 6 of the Compensation Act which determines that the provisions of this Act do not
refer to property which became communal property under the Expropriation Act (OG No.
10/78, 5/80, 30/82, 30/82, 46/82 clarified text, 28/87 and 39/88). It specifies that the
so-called "righteous compensation" paid for expropriated property was bellow
real market value, and that this puts former owners into an unequal position in comparison
with the former owners of nationalized and confiscated property (Articles 3 and 14 of the
Constitution). The expropriation institute is not a distinctive institute of communist
regimes. It is applicable in various forms in all constitutional countries. Hence, the
expropriation cannot be compared with other legal basis for the property seizures listed
under Articles 2 to 4 of the Compensation Act. An expropriated property, for which
compensation was once paid (even below a real market value), shall not be compensated for
twice. Therefore, Article 6 is not violating the mentioned articles of the Constitution.
Besides, neither compensation payable under the Compensation Act always corresponds to a
real property market value, nor it reflects upon all seized properties or all aspects of
reimbursement.
(79) 6/1. The greatest number of proposals for determining the
constitutionality dispute, directly or indirectly, Article 9 of the Compensation Act, and
in that context, all other Articles of this Act that particularize or closely establish
its content and legislative impact. Also, there are certain noticeable interpretations of
Article 9 - relating to the determination of particular compensation for seized property
cases or concerning the principles of particular governmental bodies that participate in a
procedure - which breach the content and the objective of Article 9, and therefore, are
incompatible with the Act, and discriminatory in protecting the constitutional rights.
(80) Proposals to establish the constitutionality refer to Paragraphs
1 and 2 of Article 9, and dispute all components of their content: a realm of eligible
persons to be compensated for property, that is, those that shall have their property
restored to them; a specific limitation of eligible persons in connection with the first
succession lineage; exclusion of the willed heirs from a realm of eligible compensation
receivers, and the provision that eligible compensation receivers are only Croatian
citizens.
(81) 6/2. Article 9 of the Compensation Act states the following:
"The rights specified in this Act are granted to physical person - a former owner,
i.e., his or hers lawful heirs in the first succession lineage (hereinafter: former
owner), that on the day this Act enters into force have the Croatian citizenship.
In regard to the inheritance rights shall apply the provisions of the Inheritance Act, if
not otherwise provided by this Act.
The former owner's heirs are granted ownership over property, notwithstanding the
proprietorship allotment established by an earlier legal decision on inheriting, if they
do not otherwise agree (herein after found property)."
(82) 6/3. Practically all demands and proposals filed by the claimants
oppose Paragraph 1 of Article 9, which establishes a realm of eligible compensation
receivers, i.e., persons eligible to have their property restored to them, in such a way
that, it only provides for former owners and their lawful heirs that are all (not really
logically and consequently) called the former owners.
(83) They emphasize the following: this limits inheriting to the first
succession line; this rules out brothers and sisters from inheriting; this violates the
family protection as provided in the Constitution; this excludes the willed heirs; this
breaches the equality of legal and willed heirs; this limits the rights of catholic
priests who, because of their celibacy, cannot have direct heirs; and finally, that the
State takes over property if an application for compensation was not filed, or if it was
legitimately rejected (Article 77 of the Compensation Act), notwithstanding the possible
existing heirs not provided for in Article 9, and other (U-I-673/96, U-I-695/96,
U-I-756/96, U-I-768/96, U-I-771/96, U-I-924/96, U-I-925/96, U-I-926/96, U-I-927/96,
U-I-933/96, U-I-941/96, U-I-955/96, U-I-957/96, U-I-2/97, U-I-67/97, U-I-125/97,
U-I-147/97, U-I-149/97, U-I-150/97, U-I-160/97, U-I-638/97, U-I-670/97, U-I-704/97,
U-I-881/97, U-I-1342/97, U-I-309/98, U-I-466/98 and U-I-796/98).
(84) In connection with Article 9, claimants also dispute the
constitutionality of the provisions of some other articles of the Compensation Act (for
ex. Article 77), and some dispute the constitutionality of the entire Act without
specifying the particular provisions.
(85) 6/4. Their dispute of the provisions in Paragraph 1 of Article 9
claimants substantiate with the provisions of Articles 3, 14, 16, 26, Paragraph 2 of
Article 41, Article 48 and 50, and Paragraph 2 of Article 61 of the Constitution. They
claim that this provision is contradictory to the already cited provisions of the
international acts (chapter 2/3), and consequently, incompatible with Article 134 of the
Constitution (under which the international agreements, signed and settled in conformity
with the Constitution and promulgated, take part in the legislative system of the
Republics of Croatia, and by their legal force, are above laws).
(86) Most frequently claims refer to Paragraphs 1 and 4 of Article 48
(that guarantee ownership and inheriting rights), and Paragraph 1 of Article 50 (according
to which the ownership can only be taken away or limited under the law, and compensated
for real property value), and allege that not only Article 9 of the Compensation Act, but
the entire Act violates these provisions, and consequently, it is unconstitutional.
(87) 6/5. Paragraph 1 of Article 9 of the Compensation Act, in
indirect way - based on the provisions of the Inheritance Act on the first legal lineage
(Articles 10 to 12 and 23 to 26, if referring to the first legal succession line) - have
established a realm of legitimate compensation claimants, restitution of seized property
and their interrelationship. By legal descent these heirs are a spouse of a former owner
(whose property has been seized), their children (legitimate or illegitimate, legalized or
adopted children and their heirs, when so provided by law (Article 11 of the Act).
(88) In view of this, the Compensation Act evens former owners and
their so-called heirs by first legal descent, and names them all "the former
owners", although, those second ones, by logistics of things, are not so.
(89) However, the named legitimate claimants are not heirs in a legal
sense, since there is neither an object to inherit nor inheritance or property to be
compensated for or recovered. That is, property is not owned by the former owners, but by
the State or other legitimate subjects; heirs do not take possession of this property
after a "benefactor" (former owner) dies, but via legislative decision of an
authorized administrative body; and finally, heirs do not inherit things that formerly
belonged to their predecessor, but as a rule, get a compensation for these things. This
does not comply with the inheriting rights.
(90) Neither does the Compensation Act comply with the inheriting
rules in cases of the so-called subsequently found property (Article 232), after the court
decision on inheriting is promulgated, because the ownership shares are determined apart
from the court?s settlement of ownership (Paragraph 3 of Article 9).
(91) The so-called succession under Article 9 of the Compensation Act
complies with the legal inheriting rules only as far as it takes to determine a realm of
legitimate heirs by first legal descent and an agenda under which they are entitled to
realize their compensation for or restitution of property. In essence, this is not an
institute of the inheriting law, but a special legal institute of the Compensation Act
that combines this Act?s provisions with some of the inheriting rights principles.
(92) 6/6. The provisions of Article 9 comply with Paragraphs 1 and 4
of Article 48 and Paragraph 1 of Article 50 of the Constitution.
(93) Those persons whose property was seized in the former SFR
Yugoslavia are no more owners, that is, in possession of the ownership rights pertaining
to this property. Accordingly, the Compensation Act could not have been breaching their
rights (Paragraph 1 of Article 48 of the Constitution; see also chapter 1/1 of this
Decision?s explanation).
(94) The Constitutional Court?s standpoint in relation to position of
former owners of seized property and their heirs in the transformation (privatization)
procedure is as follows: "...the constitutional provision of Paragraph 1 of Article
48 that guarantees the ownership rights, combined with the fundamental provisions on
sanctity of ownership, social justice and the rule of law (Article 3 of the Constitution)
shall also be interpreted as the protection during a contriving procedure (returning),
i.e., as the protection of future ownership... Indeed, their (future) ownership rights
depend on those resolutions that, as stated before, are yet to be issued."
(95) These regulations have been issued and written into the
Compensation Act. This means that the protection, in relation to the cited point of view
of the Constitutional Court, shall enjoy only former owners mentioned in Paragraph 1 of
Article 9, since only they (if they filed a compensation claim, that is, if they started
an adequate procedure) shall count on obtaining a future ownership. All others are neither
owners nor should they expect to be compensated for or to have restored to them their
ownership, and therefore, they do not enjoy the constitutional legislative protection of
the sanctity of ownership.
(96) Because of same reasons, the provisions of Article 9 of the
Compensation Act are neither contrary to the constitutional provision in Paragraph 1 of
Article 50, nor to other provisions of the Constitution on which the claimants base their
claims. (See chapter 6/4)
(97) 6/7. As already mentioned (in chapter 2/1), the Legislator can
freely establish which property shall be compensated for or returned, in which volume and
to which persons, so such Legislator?s decision is not, in principle, subjected to the
constitutionality control. Furthermore, Article 9 of the Compensation Act does not provide
for inheriting, but determines a realm of legitimate compensation claimants using as the
legal basis the rules relating to the first legal succession line, pursuant to the
Inheritance Act (chapter 6/5).
(98) The Compensation Act had no intention to determine (or adopt) the
provisions of the Inheritance Act in order to compensate for or recover the seized
property, but - relying on some provisions of this Act - to determine a realm of the
legitimate compensation claimants. The willed heirs (same as all others) are in accordance
with the provisions of Article 9 of the Compensation Act excluded from receiving the
compensation for or having their property recovered to them, if they are not concurrently
the first legal successors. By taking into account actual the economic and other
possibilities of the State, especially, the substantial difficulties in determining
compensation based on a last testament, because of the long time-lapse since property
seizure took place - the Legislator has determined that the legitimate compensation
claimants are only the former owner?s spouse and the closest descendants. The Legislator
excludes from being compensated all other heirs (lawful, obligatory and willed), if they
do not come under the first succession line. Such a provision of the Compensation Act
neither violates the Constitution just because it excludes (some) entailed heirs from
getting a compensation, nor it is discriminatory because, in the same way, limits all
sorts of inheriting.
(99) 6/8. Paragraph 1 of Article 9 determines that legitimate
compensation claimants are the former owner or his or her legitimate descendants by the
first legal descent. Paragraph 2 establishes that in relation to the inheritance rights
(in fact, the compensation rights) shall apply the provisions of the Inheritance Act, if
the Compensation Act does not provide otherwise.
(100) In conclusion, for determining a realm of legitimate
compensation claimants shall apply only those provisions on the first legal descent
specified in the Inheritance Act (see chapter 6/5). And opposite, the application of the
Inheritance Act?s provisions on other succeeding descendants (Articles 13-22 of this Act)
is excluded: by these provisions a realm of legitimate compensation claimants can neither
be widened nor their rights limited or excluded.
(101) Under the first legal descent provision the heirs (legitimate
compensation claimants) are the spouse of the benefactor (former owner) and their children
(Article 10 of the Inheritance Act), persons legally equated to children (if under the
first legal descent provision, Articles 23 to 26), and their descendants under the lineage
of preclusion (that is, in the event when child dies before legatee, Article 11) of the
Inheritance Act, and the legacy is to be divided into equal parts.
(102) The provisions on the second legal descent specify that if a
legatee did not have direct descendants, spouse shall be exempt from the first legal
descent line (therefore and for fact, there are no more descendants of that lineage),
although the spouse shall appear as a beneficiary by the second legal descent, together
with legatee?s parents, and with a more advantageous legacy ratio (spouse inherits one
half of the legacy, Article 13 of this Act). Persons belonging to other legal succession
lineage are exempt from receiving legacy when the legatee?s spouse is still alive (or, if
there are other persons under the second legal succession, Articles 17 to 22).
(103) The provisions of the Inheritance Act obviously favor legatee?s
spouse, by insuring him or her a special position among other descendants. Therefore, it
is illogical and contrary to diction and dictum of law (whether of the Inheritance or
Compensation Act) the viewpoint accepted by some governmental bodies, that spouse of a
former owner, if they had no children, is not entitled to receive compensation, because he
or she comes under the second descent line. In other words, that spouse has the right to
receive compensation only when children born into the marriage with former owner are still
alive; and if they were childless or children have died, the spouse loses the right to
receive compensation.
(104) This conclusion derives from implementing the legal succession
rules applicable to the second descent (Article 13 of the Inheritance Act), and which
implementation the Compensation Act rules out. According to Paragraphs 1 and 2 of Article
9 of this Act persons by the first legal descent (spouse and children) are the legitimate
compensation claimants, notwithstanding the circumstances concerning the second legal
descent. Consequently, the right of former owner?s spouse to receive compensation for
seized property is not dependent on whether or not they had children.
(105) For this reason, the expressed legal standpoint (on excluding
spouses from the first legal descent) breaches Article 9 of the Compensation Act and the
constitutional guarantees in Paragraph 1 of Article 48 of the Constitution.
(106) This legal stand asserts petitioner No. U-I-673/1996. However,
this does not concern the constitutionality of the Compensation Act, but its
interpretation.
(107) 6/9. Heirs by first legal descent - therefore, the legitimate
compensation claimants - are also those that shall inherit under the lineage of preclusion
(representation), because this provision comes under the first legal descent rules (it is
under subparagraph "a/The First Legal Descent" of the Inheritance Act). Under
the lineage of preclusion estate of a deceased beneficiary shall inherit directly his or
her children (eventually other descendants, Article 11 of the Inheritance Act), but only
if the beneficiary by the first legal descent (a legitimate compensation claimant) had
died before the benefactor (former owner).
(108) The cited provision makes sense inside the succession order,
because heirs inherit immediately upon legatee?s death. So when (in an opposite case) a
legatee dies first, the heir has already taken possession of the estate, so after his or
her death inheriting shall continue.
(109) This rule does not comply with the provisions of the
Compensation Act. Pursuant to the Act?s provisions property shall be taken over only after
an authorized governmental body issues a legitimate compensation resolution. A direct
application of the provision on representation would lead to an unequal compensation for
property, since some descendants would have the right to receive compensation (if a lawful
heir by first legal descent dies before a former owner-benefactor), and others would not
have that right (if heir dies after a former owner).
(110) Because of that, the provision on the representation right ought
to be applied in such a manner that all descendants of legitimate compensation claimants
have the right to receive compensation for property, regardless of the death agenda of
descendants and beneficiaries.
(111) 6/10. In accordance with Article 77 of the Compensation Act
"the Republic of Croatia takes over the property rights over property that is an
object of compensation under this Act, when an application for compensation has not been
filed or has been legitimately turned down, if not otherwise provided by law."
(112) In compliance with this provision of the Act, in the cited case
the Republic of Croatia acquires the ownership right over seized property provided that
under some other law or legal act this property has not been already claimed by some other
title holder.
(113) 6/11. However, question is, what happens when one of legitimate
compensation claimants (heirs by first legal descent) dies after a former owner?s
(legatee) death, and other legitimate claimants file the compensation claims: whether in
that case (legitimately) this part of claim that relates to deceased legitimate claimant
should be rejected, or the entire property should be divided between living legitimate
claimants?
(114) In other words, whether in this case is created a specific
"forsaken" property (in accordance with the Compensation Act) that goes to the
State, or, the entire seized property should be compensated for (or returned) to living
legitimate claimants in equal parts, just as though the dead legitimate property claimant
(heir) has never existed.
(115) The first standpoint (that property in described case shall
belong to the State) advocate some state organs. The question is whether this complies
with the Compensation Act.
(116) The legal inheritance rule on forsaken property is not
applicable in this case, since it specifies that "an estate without successors shall
become the communal (today State?s) property" (Article 8 of the Inheritance Act).
Here however, pursuant to this Act at stake is not an estate without beneficiaries, since
the deceased heir is inheriting estate instantaneously after legatee?s death (Article 135
of the Inheritance Act). At his or her moment of death the descendants become heirs, and
provided there are none, inheritance passes on to parents, the deceased?s spouse, and
under the representation law, eventually to brothers and sisters of the deceased. In
conformity with the Inheritance Act, this is not property without beneficiaries.
(117) The Compensation Act (except for already cited provision of
Article 77) does not provide for "forsaken" property. A conclusion on
"forsaken" property (that is, that the seized property shall pass on to the
State) evidently causes the implementation of the provisions provided for the second and
successive inheritance lines: the deceased legitimate claimant has heirs, though they do
not come under the first legal descent (connected with former owner) and therefore, have
no right to receive compensation for seized property.
(118) Here too, the provision defined in chapter 6/8 is in force: only
the provisions connected with the first legal descent shall apply to establish the
compensation rights for seized property. The provisions for consecutive descent lines
shall not apply, and therefore, shall neither widen nor narrow a realm of legitimate
compensation claimants.
(119) Therefore, notwithstanding that some heirs have died after the
former owner (legatee), in conformity with the provisions of Paragraph 1 of Article 9 of
the Compensation Act and this Court?s opinion, the right to compensation for the entire
seized property shall have all surviving heirs by first legal descent in equal parts.
(120) 6/12. Provided that, while still alive, a previous owner has
submitted an application for the property compensation (Articles 64 and 65 of the
Compensation Act), he or she has established a valid claim against the State or any other
holder of seized property. Such a claim makes a part of former owner?s property; this is
not property seized from him or her during the Yugoslav communist rule (so it does not
come under the limitations of the Compensation Act), but the property created under the
provisions of this Act, that is, laws of the Republic of Croatia. The limitations (on
"inheritance") provided for in Article 9 of the Compensation Act shall not apply
to this property.
(121) For that reason, pursuant to the provisions of the Inheritance
Act in case of an applicant?s death (former owner), this claim is freely inheritable, and
enjoys the constitutional legislative protection under Paragraph 1 of Article 48 of the
Constitution, because it furthers the procurement of future ownership (See chapter 6/6).
(122) Different concepts, i.e., that such claims shall comply with the
provisions of the Compensation Act on "inheritance," which limit free inheriting
- would breach the fundamental, civilized standards of the rule of law. Having in view
slowness of the property compensation or restitution procedures, and former owners? age,
most probably many former owners (and their heirs), due to death, would not be able to
realize the rights granted to them in the Compensation Act. It is not acceptable that the
State or other persons in possession of seized property draw profits due to intricate
problems that slow-down the implementation of law, or because the state organs authorized
to administer compensation and restitution procedures drag behind.
(123) 7/1. Claims U-I-695/1996, U-I-957/1996, U-I-2/1997,
U-I-147/1997, U-I-486/1998 and others, dispute among other, the constitutionality of the
provisions of the Compensation Act that exclude individuals without Croatian citizenship
from being compensated for seized property. This firstly relates to Paragraph 1 of Article
9 that determines that legitimate compensation claimants are only those former owners
"who on the day that this Act entered into force had the Croatian citizenship,"
and secondly, Article 11 that particularizes that "Foreign physical and legal persons
do not enjoy the rights provided by this Act," except when otherwise determined by
the international agreements. Disputed parts of the provisions of Article 66 and 67,
requesting that claims for compensation shall contain documents or proofs of citizenship,
claimants base on the provisions of the Constitution cited in chapter 6/4.
(124) 7/2. It is unfair, and it cannot be justified under the pretext
of protecting some other important constitutional or other law, to discriminate former
owners based on their legal connection with a particular state (that is, according to
their citizenship) - and granting to some the compensation rights (to Croatian citizens),
yet denying this same right to others. Moreover, property has been seized from all, the
Croatian citizens and those who are not, in the same manner, at the same time and under
the same legal basis. Furthermore, provided it exists, their property is still inside of
the Republic of Croatia enjoyed by the State or other legal subjects.
(125) The differentiation between national and foreign citizens, in
regard to the volume of potential rights, is customary (and not incompatible with the
Constitution) provided it applies to legal relations regulated by civil law or by laws
applicable to employment issues. However, when such a differentiation pertains to legal
ownership issues in such general, universal terms, it is groundless and contrary to the
Constitution
(126) Consequently, the act that shall replace the invalidated one, to
the former owners who are not Croatian citizens should in principle grant the right to
receive compensation for non-recoverable property or to have restored to them their
property, or rather, to settle terms under which these persons will be granted the
compensation right. The foreigners? right to have their real estate restored to them
should comply with the provisions of other acts concerning the foreigners? right to obtain
real estate in the territory of the Republic of Croatia.
(127) The cited provisions in Paragraph 1 of Article 9 and Paragraph 1
of Article 11 (in a part that concerns individuals) of the Compensation Act is
incompatible with Article 14 of the Constitution. They do not respect the constitutional
guarantee that all rights shall be equally available to all Croatian citizens and persons
in the Republic of Croatia, but establish the discriminatory differences based on personal
and legal characteristics of individuals, that are not compatible with the Constitution or
laws conformed with the Constitution. Those provisions are not complying with the
international agreements and acts cited in chapter 2/3 of this Decision. Furthermore, they
are contrary to Article 134 of the Constitution because the international agreements, when
signed and enacted in compliance with the Constitution, and promulgated, augment the
integral legislative system of the Republic of Croatia, so the Compensation Act should
have been conformed with them.
(128) 7/3. The cited provisions of the Compensation Act in chapter 1a
of this Decision are therefore annulled.
(129) Since the term for filing compensation claims for seized
property lapsed (six months after the Compensation Act entered into force - Paragraph 3 of
Article 65), and a late claim would not only have to be rejected, but the claimant would
forfeit all rights provided for in this Act (Paragraph 4 of Article 65), in a chapter 1c
of this Decision the Court has annulled these provisions, so that the legitimate claimants
who are not Croatian citizens might exercise their rights.
(130) The annulled provisions should be replaced by new ones that will
establish a manner of compensation for or restitution of property to foreigners, and
time-terms for the applications. For this reason, the legal consequences of this Decision
shall be postponed, and the new provisions shall be issued no later than one year from the
promulgation of this Decision in the Official Gazette.
(131) 8. Claim U-I-673/1996 disputes the constitutionality of Article
12 of the Compensation Act. This article determines that the legal persons (companies,
ed.) or their legitimate successors whose property have been seized shall claim the
compensation provided they maintained until the Act entered into force a continuous
legitimate succession, did business and resided in the territory of the Republic of
Croatia (Paragraph 1). The Croatian Government might grant them the compensation right
regardless of these conditions, provided they were either prohibited or dissolved for
political reasons, and if they have been promoting the Croatian statal and national
interests (Paragraph 2).
(132) The claimants allege that the former state could not otherwise
seize the property, but through the abolition of legal persons, that is, through removal
of political parties. This also relates to community organizations, foundations and other
institutes. Without mentioning the particular provisions of the Constitution, the
claimants allege that this is incompatible with the constitutional guarantees of the rule
of law and the principles of statutory state.
(133) The Legislator had decided to grant the compensation right only
to those legal persons, that from the time property was seized to the time when the
Compensation Act entered into force, maintained an uninterrupted legal continuity. The
provisions and decisions of the former Yugoslavia on banning, that is, abolition of legal
persons - no matter how unfair and politically motivated - have established the particular
legal results, that is, abolition of legal persons and the elimination of their ownership
and other property rights, and after them there are no legal successors. Newly-established
legal persons, even if they kept the same appellation and area of business, are neither
identical to those earlier (abolished) nor they are their legal successors. An opinion
that they should not (all) get compensation for or have their property restored to them is
therefore legitimate. Each particular case, in accordance with the criteria provided by
the Compensation Act, should be decided independently.
(134) Accordingly, the provisions of Article 12 of the Compensation
Act are legitimate and exemplify the legal nature of legal persons, and therefore are not
incompatible with the fundamental values of the Constitution, that is, the rule of law
(Article 3 of the Constitution).
(135) 9/1. All other disputes mentioned in the filed demands and
proposals relate to the following issues: which former owners? property the provisions of
the Compensation Act apply to, what is to be restored or compensated for to the former
owners (the legitimate compensation claimants) and in which volume.
(136) Claim No. U-I-121/1997 disputes the constitutionality of Article
7 of the Compensation Act. This particular Article does not provide compensation for
property that on the day of this Act?s enactment does not exist in nature, despite the
fact that the conditions specified in Articles 2 and 3 have been met. This claimant
considers that the proviso whether some property still exists or not cannot excuse the
compensation suspension, and argues that this violates the highest constitutional values
of the Republic of Croatia specified in Article 3 and the constitutional rights provided
for in Article 14 of the Constitution.
(137) Claims Nos. U-I-768/1996, U-I-924/1996, U-I-925/1996,
U-I-926/1996, U-I-927/1996 and U-I-933/1996 emphasize among other, that Article 48 of the
Compensation Act violates the Constitution. In conformity with this Article former owner
can restore ownership of only those movables that have cultural, artistic or historical
value (Paragraph 1). Other movables will not be compensated for or returned to the former
owner (Paragraph 4). Claimants argue that this provision puts former owners into an
unequal position, because other valuable movables are neither compensated for or restored
to their owners (expensive furniture and other), and that this violates the constitutional
values and rights mentioned in a preceding chapter.
(138) The same claims and claim No. U-I-771/1996 dispute Article 51,
Paragraph 1 (according to which former owner that realizes the compensation right in
whatever form, neither has the right to be reimbursed for losses or expenses, nor the
right to receive payment for damages), and Articles 58 and 59 (that limit and determine
the total compensation amount) of the Compensation Act. These provisions neither redeem
nor respect the former owner?s capital invested into property that the State was taking
advantage of, nor do they establish accumulated profit losses. As a result, they violate
Paragraph 4 of Article 49 of the Constitution (according to which the rights acquired by
capital investment cannot be diminished by law or any other legal act). It is emphasized
that the cited provisions of the Compensation Act violate Article 134 of the Constitution,
and contradict various international agreements that the Republic of Croatia has signed or
adopted.
(139) Claims Nos. U-I-771/1996, U-I-160/1997 and U-I-8/1997 (as well
as in many others in direct or indirect way) are disputing the provisions providing an
amount and sum-total of compensation for seized property. These claimants dispute Article
28 (a manner of determining compensation amount for seized apartment), Article 45 and
other (a compensation for seized companies) and Articles 58 and 59 of the Compensation
Act. The general conviction is that the provisions on compensation are exceedingly unfair
because of the decisive figures and payment methods, and they are reasoning that by this
Act the State has now fully disowned former owners; that an established compensation
amount along with the established amount limits is unjust, because a former owner of
seized property of a greater value (as are, by rule, the religious communities) will get
smaller compensation than former owners of lesser property. This violates the
constitutional provision that guarantees the special protection to these communities.
Mentioned provisions of the Compensation Act therefore violate Articles 3, 16, 48, 49 and
50 of the Constitution.
(140) Claims U-I-748/1996, U-I-21/1997 and U-I-50/1997 dispute among
other, all provisions on compensation for and restitution of the seized property
(especially those on non-restitution or compensation payment below market value, a manner
of compensation payment, and the fact that nationalized property is not to be fully
restored) and emphasize, that all these provisions violate Articles 3 and 48 of the
Constitution.
(140) Case No. U-I-771/1996 disputes the provisions of the
Compensation Act
(141) that guarantee the compensation for seized property in currency
or securities first, and only exceptionally, the natural restitution of property
(Paragraph 2 of Article 1 and others). Claimants allege that these provisions violate the
conditions under which the Republic of Croatia was admitted to the Council of Europe, and
Paragraphs 19 and 21 of the Annex to the Declaration on fundamental justice for the
victims of crime and misuse of power, that bind the State to restore property seized
during the fascist and communist rule, and to officiate in accordance with the European
standards under which property shall be restored first based on the restitution principle,
and only subsequently, compensated for according to the market value principles.
(142) The same claimant disputes the constitutionality of Articles 21,
22, 24, 28, 57, 58, 60, 61 and 63 of the Compensation Act, and furthermore claim that the
ownership has been overruled or limited, not exclusively in the interest of the Republic
of Croatia (Paragraph 1 of Article 50 of the Constitution), but to benefit other physical
and legal persons. This was taking place particularly during the transformation from
communal into individual ownership procedure, notwithstanding the previous owners? will,
and without market value compensation. Thereby, the Legislator has violated the provisions
of Article 5 of the Constitution.
(143) Claimants Nos. U-I-232/1997 and U-I-233/1997 dispute the
provisions of Paragraph 2 of Article 16 and Paragraph 5 of Article 17 of the Compensation
Act, since under these provisions former owner cannot reclaim construction land that has
been put to use, that is, if something was built on it. They allege that this violates
Articles 3, 14 and 48 of the Constitution.
(144) The same claimants and No. U-I-244/1999, for the same reasons
dispute the constitutionality of Paragraphs 2, 3 and 4 of Article 41 and Paragraph 2 of
Article 42 because they favor occupants instead of the business space owners, since they
entitle occupants to make use of the business space for an extended time, nonetheless, to
occupy it for an unlimited time unless owner compensates such an occupant for funds spent
in this business space.
(145) 9/2. As far as these complaints are concerned - that relate to
the provisions of the Compensation Act providing for restitution of or compensation for
property, the volume of compensation and property - the already expressed opinion in
clause 2/5-7 shall remain in force. The Constitutional Court cannot judge whether the
provisions regulating the above issues are constitutional, whereas their settlement relies
mainly on the State?s economic power and other issues of political or moral nature, and
not on the issues of constitutional-legislative nature.
(146) The international acts on which claimants base their claims are
not international agreements, and therefore, they did not become an integral part of the
internal legal system of the Republic of Croatia, although, they might be affecting some
of her obligations within the international relations. Furthermore, some of these acts?
provisions on which the claimants base their claims, in their annotation are neither
contrary to the particular provisions of the Compensation Act, nor are these Act?s
provisions violating the Constitution.
(147) 10. Claim No. U-I-33/1997 disputes the constitutionality of
Article 2 and Paragraph 2 of Article 19 of the Compensation Act, for Article 2 does not
integrate the Act on Outlawing Agrarian Feudal Relations in the Dalmatian and Croatian
Seaside Territory, because of an amendment that, because of an alleged misinterpretation,
the Croatian State Sabor has adopted. Paragraph 2 of Article 19 grants compensation (and
not the restitution) for the unused construction land that has been seized under the
regulations on agrarian reform, and in Articles 52 to 55 of the Act exempt it from being
given into ownership.
(148) The constitutionality of law cannot, in principle, be disputed
because it does not regulate certain relations (that is, because it allegedly lacks
something), but only for the proviso subject matter. For these allegations connected with
the provisions on compensation for construction land (instead of recovery) applies the
explanation in clause 9/2.
(149) 11. Claims U-I-771/1996, U-I-232/1997, U-I-233/1997,
U-I-185/1999 and others dispute the constitutionality of the provisions of the
Compensation Act, because, the transformation of communal property into individual
ownership of physical or legal persons has been taking place based on various regulations,
and before the Act entered into force. This has prevented previous owners to partially
reclaim their seized property. For this reason, they particularly dispute Paragraph 1 of
Article 53 of the Act which rules out previous owner?s claim for restoring any kind of
ownership or holding over an unused construction land, provided the transformation has
been completed and this land entered the communal company?s capital. Claimants believe
that prioritization of transformation over denationalization is illegal, for it favors the
occupants ahead of damaged owners, that is, the would be owners have superior rights than
former owners.
(150) This pertains to establishing whether these two laws conform:
the Compensation Act and the Act on Transformation of Communal Companies (OG No. 19/91 and
83/92), or, the legal provisions concerning other forms of transformation (privatization).
For the conformity of those legal regulations that have an equal
constitutional-legislative power, the Constitutional Court is not competent.
(151) 12/1. Claims U-I-764/1996, U-I-715/1996, U-I-928/1996,
U-I-67/1997, U-I-988/1997, U-I-1268/1997, U-I-1327/1997, U-I-185/1999 and others, question
the constitutionality of Paragraph 4 of Article 29 of the Compensation Act, that
establishes that an owner of a purchased apartment (former tenant), in the event of a real
legal transaction (sale), is under obligation to offer this apartment first to former
owner for the same price that he or she paid for it. Claimants are emphasizing that the
ownership may be limited or taken away by means of law, only in the interest of the
Republic of Croatia and after paying a real market value indemnity (Paragraph 1 of Article
50 of the Constitution). They therefore allege that the cited provision violates the
constitutional rights guaranteed in Article 3 and 48 of the Constitution.
(152) As a rule, pursuant to the Compensation Act (Articles 22-31)
former owners cannot recover ownership of their apartments. The Act gives the purchasing
rights, under legal conditions (that was not possible under earlier laws), to occupants
(tenants) residing in these apartments.
(153) Thus, the law does not legalize the ownership of tenants
occupying the nationalized apartments, but makes feasible ownership to them via such an
apartment?s purchase. Consequently, Articles 29 to 31 - that regulate a previous owner?s
right to be the first purchaser of such an apartment in the event of sale - are not
limiting the existing ownership rights of former tenants (which at the time this Act
entered into force did not yet exist), but regulate modalities for the future ownership
and set some limits.
(154) Article 50 of the Constitution, found in chapter III of the
Constitution on Fundamental Freedoms and Human Rights of Citizens, only applies to the
existent subjective constitutional rights (ownership right). The ownership of some
physical or legal person can be limited exclusively under Article 50 of the Constitution,
however, this does not imply that law could not preclude (future) taking over the property
that is under some liability or limitation, if this is justifiable and opportune for
protecting interest of the third persons or for some other reason. The subjective
ownership rights (that belong to a subject) can be restricted only under the provisions of
Article 50 of the Constitution; the ownership right in objective sense (ownership
institute) can be subjected to specific limitations.
(155) The first purchase right is a legal institute established and
accepted in the legal system of the Republic of Croatia. Therefore, the provisions of
Articles 29 to 31 of the Compensation Act - and having in sight the expressed legal
standing - do not violate Paragraph 1 of Article 50 of the Constitution.
(156) 12/2. Regardless of an expressed opinion - that is, that law can
anticipate some limitations in the future take-over of some particular forms of ownership
- those limitations will affect an owner the moment when he or she obtains ownership over
things. The ownership itself generally upholds the right to make use of things, and among
other, sustains the right to sell things for a settled (market) price.
(157) The legal first purchase right may limit the right to make use
of things. However, this limitation must comply with the objectives for which it was
written into the Compensation Act. An objective of the first purchasing right is to
protect the former owners along with the legal system against improper gain, that an
apartment owner (a former tenant) can obtain through an apartment sale for a real value
price (after he or she bought it from the State or other subject for a tangibly lower, by
law determined price). Accordingly, for protection of former owner?s interests, a former
owner has a right to purchase back his or her sold apartment for the same price that
tenant paid for it, when this owner decides to make use of it in a real legal sense.
(158) To achieve this objective it is not necessary to establish the
first purchase right outside any terms, so it is not clear whether or not this liability
applies to real estate (apartment) notwithstanding who owns it; or, whether it lasts only
during the particular legal subject?s lifetime (and which subject: an apartment owner or
the original owner?). The objective of the first purchasing right could be also
accomplished through a reasonably limited time to exercise the first purchase right (that
is, by some longer term). An unlimited time provided for exercising the first purchase
right does not comply with the objectives this law wishes to accomplish. Furthermore, it
reveals a severe limitation of the owner?s rights; it might impede his or her socially
valid actions (for example, in solving family housing problems), and it may substantially
limit the real estate trade.
(159) The Constitution provides for the possible limitation of
freedoms and rights of individuals and citizens (for example in Article 16, Paragraph 2 of
Article 43, Article 50, Paragraph 3 of Article 59, Paragraph 2 of Article 60). However,
any limitation (even when necessary and based on the Constitution) characterizes an
exceptional state, since it exempts the universal rules on constitutional rights and
freedoms. For that reason, these limitations must not only comply with the Constitution,
but measure up to the objective and the purpose that law wants to accomplish, that is,
objective or purpose must be accomplished by the smallest possible transgression of
citizens? constitutional rights (indeed, provided these limitations can be defined by
degrees). This statute on equity of limitations and objective and purpose that law wants
to accomplish, represent an universal constitutional proviso that is dominant in all
constitutional provisions on freedoms and human rights.
(160) 12/3. The provision related to the first purchase right in
Paragraph 1 of Article 29 of the Compensation Act violates the Constitution, because its
vagueness and incompleteness threaten the legal security, and thus, one of the highest
values of the constitutional system of the Republic of Croatia - the rule of law (Article
3 of the Constitution). This refers to the undefined time limit for the first purchase
right and the incomplete legal rendition of the "real legal management" by an
owner - both established as grounds for realizing the first purchase right. These provisos
of the Compensation Act contradict themselves: Paragraph 1 of Article 29 provides for
(without reservation) the real legal authority over the purchased apartment, yet a sequel
of same article (and Articles 30 and 31) legislates solely the modalities for apartment?s
selling.
(161) 12/4. That is why clause 1b of this Decision invalidates the
provisions in Paragraph 1 of Article 29 of the Compensation Act, and in clause 3 postpones
entering into force of this Decision until the Croatian State Sabor has issued the new
provisions, no later than one year from the promulgation of this Decision in "The
Official Gazette."
(162) Under the assumption that the new provisions shall clarify the
proviso on the first purchase right (a real legal control, or selling only, or something
else), and that the time limit for the first purchase right shall be defined, all other
provisions in the Compensation Act that concern the first purchase right shall remain
unchanged.
(163) The Decision to promulgate this Decision and Resolution conforms
with the provisions of Article 20 of the Constitutional Law on the Constitutional Court of
the Republic of Croatia.
No. U-I-673/1996 and other
Zagreb, 21 April 1999.
The Constitutional Court of
the Republic of Croatia
President: Jadranko Crnić (hand-signed)
