REPUBLIKA SLOVENIJA USTAVNO SODIŠČE

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1 REPUBLIKA SLOVENIJA USTAVNO SODIŠČE U-I-60/ D E C I S I O N At the meeting of 16 July 1998 concerning the proceedings for the evaluation of constitutionality commenced on the initiative of Janez Rozman from Ljubljana and Dr. Ksenija Rozman from Ljubljana, represented by her authorized representative Janez Rozman, of Dr. Rajko Turk, Dr. Josip Turk and Milica Abram from Ljubljana represented by Igor Dernovšek, layer in Ljubljana, of Dr. Johannes Attems from Vienna, represented by Rok Fink, lawyer in Celje, of Cecilija Pavlin, Amalija Murn and Hinko Kirn from Ljubljana, represented by Irena Polak - Remškar, lawyer in Ljubljana, of Amalija Likar and Peter Bedjanič from Ljubljana represented by their authorized representative Novica Novaković from Ljubljana, of Franc Gerden from Trebnje, represented by Hranislav S. Đurković, lawyer in Koper, and Stanko Prijatelj, lawyer in Ljubljana, of Julija Zaletel, Olga Zaletel and Magdalena Betetto from Ljubljana represented by Irena Polšak - Remškar, lawyer in Ljubljana, of Tom Knez from Ljubljana, represented by Nataša Vidovič, lawyer in ljubljana, of Dr. Aleksander Majdič from Bled, represented by Nataša Vidovič, layer in Ljubljana, of Dr. Ljubo Sirc from Kranj, represented by Nataša Vidovič, layer in Ljubljana, of Dr. Igor Levstek from Ljubljana, represented by Nataša Vidovič, lawyer in Ljubljana, of Jure Filipčič and Mladen Terčelja from Ljubljana, Miha Jemc from Zug, Switzerland, represented by Aleš Rojs, lawyer in ljubljana, of Alojzija Farič, Anica Cimperc, Alojzija Osvald and Mirko Lemež jun., all from Maribor and represented by their authorized representative Igor Osvald from Maribor, and of Franc Zdolšek from Maribor, Milan Zdolšek from Dobje pri Planini, Marko Zdolšek from Šentjurje, Terezija Zdolšek from Šentjurje, Marija Rep from Maribor and Emilija Zdolšek from Šentjurje, all represented by Dušan Pungartnik, lawyer in Šentjurje, the Constitutional Court made the following decision: 1. Articles 145. a and 145. c of Punitive Sanctions Enforcement Act (Official Gazette of SRS, Nos. 17/87, 23/82, 41/87, 32/89 and 8/90); Official Gazette of RS, Nos. 12/92, 58//93, 71/94, 29/95 and 10/98) are not in conflict with the Constitution. 2. Provision 5 of article 145. b of the same statute is not in conformity with the Constitution in so far as failing to set a time limit by which a special law on the issuance of bonds should be passed. 3. Article 3 of the Act on Amendments and Supplements to Punitive Sanctions Enforcement Act (Official Gazette of RS, No. 10/98) is not in conformity with the Constitution in so far as failing to stipulate that unjustly convicted persons, or their heirs, who have initiated proceedings for the return of property or the payment of compensation prior to its coming into force shall have the right to the remuneration of the costs of proceeding also with respect to that part of the claim which, having regard to article 3 of the Act, cannot be successful. 4. The identified non-conformity mentioned in sections 2 and 3 of this disposition shall be eliminated by the legislator not later in than six months from the day of the publication of this Decision in the Official Gazette of the Republic of Slovenia. 5. The initiative for the evaluation of constitutionality of paragraph 3 of article 145. and article 145. č of Punitive Sanctions Enforcement Act is rejected.

2 2 R e a s o n s : A. 1. The petitioners mentioned in the introductory part of this Decision dispute Punitive Sanctions Enforcement Act (Official Gazette of RS, No. 10/98 - hereinafter: the revised ZIKS) in its entirety or just with respect to individual provisions (Janez Rozman and Dr. Ksenija Rozman, Dr. Rajko Turk, Dr. Josip Turk and Milica Abram, Cecilija Pavlin, Amalija Murn and Hinko Kirn). The petitioners claim that provisions of articles 2, 3, 8, 14, 15, 22, 26, 30, 33, 153 and 155 of the Constitution have beeb violated. All the petitioners claim that the principle of equality has been violated and point out that the disputed amendments to Punitive Sanctions Enforcement Act (hereinafter: the ZIKS) obviously treat discriminatorily the citizens which were unjustly convicted prior to 1958 in comparison with those convicted subsequently, as well as in comparison with those to whom material compensation for confiscated property was adjudged by final decision even though they had been convicted prior to All the petitioners propose also that the Constitutional Court should stay the implementation of the disputed provisions. They justify their proposals by the occurrence of such consequences as would be hard to repair, namely: - unnecessary work of the courts which are under a heavy burden already and additional financial costs - on the basis of the amended substantive law, courts would supposedly start to issue decisions on the rejecting of claims, to appoint new experts for the assessment of property on the basis of the ZDen and secondary legislation; - the petitioners and other rightful claimants would supposedly incur great costs by filing their claims and actions for which no compensation is envisaged by the disputed statute, and rightful claimants would supposedly even have to pay the costs of litigation to the Republic of Slovenia as defending party in the case of the rejecting of their claims; - rejection of claims would supposedly imply, assuming that the Constitutional Court would annul retrospective effect (article 3), further delays in the solving of these cases in courts and thus constitute a violation of the right to due process of law under article 23 of the Constitution, which has already been violated by lengthy procedures and moratoriums; - in the case of abrogation of the disputed provisions, even greater confusion, additional costs and problems would supposedly occur in courts. 3. Individual petitioners in their claims also assert the following: - The petitioners Janez and Dr. Ksenija Rozman consider that the ZIKS is a law which has been in force already since 1978 and that it guarantees the constitutional right to rehabilitation of unjustly convicted persons. Any associating of the ZIKS with the ZDen is in the opinions of the petitioners inadmissible and without a legal basis, for each regulates its own legal field. They further state that the Parliament intentionally violated the Constitution, because by the disputed statute it reintroduced a system which the Constitutional Court had already abrogated by its decision U-I-10/92. The reasons for passing the disputed statute are in the opinion of the petitioners in conflict with the principle of law-governed state, for it is supposedly evident from legislative materials that, for the legislator, anticipated revenue is a value which is superior to the compliance with the Constitution. - The petitioners Dr. Rajko Turk, Dr. Josip Turk and Milica Abram state that in the extrajudicial proceeding no. Nz 394/94 it was already decided that Ljubljana Urban Municipality was obliged to pay to the petitioners compensation in the amount of SIT 5,225,035 for confiscated property. The said decision, however, is not final yet, for the opposite party filed an appeal, and this has not been decided yet. On the basis of article 3 of the revised ZIKS, this proceeding, which was brought to an end already two years ago at first-instance level, should have been returned to the first-instance level, and their request would supposedly be considered in accordance with the ZDen, by which smaller rights are

3 3 granted to petitioners. In the opinion of the petitioners, such conditions as are determined in paragraph 2 of article 155 of the Constitution concerning retrospective effect of legislation do not exist, which is why, by determining that the revised ZIKS should be applied in the case of all proceedings where final decision has not been reached yet, the legislator has interfered retrospectively with relations in violation of article 155 of the Constitution. - The petitioner Johannes Attems states that the amending of the ZIKS is in disagreement with the principle of law-governed state, for the state cannot change a law for its benefit after many parties have already been successful in their claims and have gained back the confiscated property. To the petitioner himself 1400 hectares of forests have already been returned through denationalization proceeding, but he has withdrawn his claim and has requested that the return be effected in accordance with the ZIKS then in force. The petitioner also asks who will refund the huge costs of experts which must be covered in the denationalization proceeding by the obligor and in extrajudicial proceeding by the petitioner himself. In the supplement to his initiative, the petitioner considers that by passing the disputed law the state has again imposed upon him the sanction of confiscation of property such as is not envisaged in any statute whatsoever. - The petitioners Cecilija Pavlin, Amalija Murn and Hinko Kirn state that on they filed an action in which they requested that they be paid compensation for the loss of profit incurred as the result of confiscation of property of their legal ancestor. Without a logical and material reason, the legislator is claimed to have denied the right to compensation for damage precisely to the persons convicted and punished most rigorously during the period of the greatest revolutionary euphoria, and for acts which they had never committed. They draw attention to the very high costs which rightful claimants have already incurred in the filing of their actions (taxes and costs of layers). - The petitioners Anamarija Likar and Peter Bedjanič as legal successors to the late Dr. Hermina Bedjanič state that the redress of wrongs done to the unjustly convicted persons should not be based on the ZDen, for unjustified sentencing was a violation of basic human rights resulting in great distress, humiliation and degradation in society. Claimed to be in disagreement with articles 28 and 155 of the Constitution is article 3 of the disputed statute, for it determines a new procedure, manner and scope of the returning of unjustly confiscated property with retrospective effect. - The petitioner Franc Gerden filed two initiatives, in which he states that the right to compensation for damage arose at the moment when the sentence of confiscation of property has been annulled by final decision, and that he was at that time on the basis of the ZKP entitled to full compensation for damage, that is, also to compensation for the loss of profit. - The petitioners Julija Zaletel, Olga Zaletel and Magdalena Betetto state that the competent court with its resolution of already decided that the Republic of Slovenia should pay to the heirs to Franc Zaletel compensation amounting to SIT 54, , and that the decision is not final yet. They consider that with the passing of the disputed amendments they are no longer entitled to the return of the actual value of confiscated property; in fact, that they are no longer entitled to anything whatsoever, for the disputed provisions only provide for the passing of a special law which should regulate the issuance of bonds used for the payment of compensation. Such regulating of the rights that have been recognized already would supposedly cause legal uncertainty, for nobody knows when the said special law will in fact be passed, and it is also an unconstitutional way of regulation, of which the legislator makes use more and more frequently. In the opinion of the petitioners the burdening of national economy does not justify the violation of the rights guaranteed by the Constitution. They point out that, taking into consideration the legal system in force and the decision of the Constitutional Court U-I-10/92, they decided to enforce their claims on the basis of the ZIKS and thus took upon themselves the high costs of experts and the lawyer. - The petitioner Tomo Knez in his initiative states that the disputed amendments and supplements mean a returning to the time prior to the passing of the constitutional amendment XCVI and the abandoning of the principles of article 29 of the Universal Declaration of Human Rights. He points out that the disputed provisions interfere with final court decisions and the accrued rights and that they create discrimination in the treatment of unjustly convicted persons. - The petitioner Dr. Aleksander Majdič in his initiative states that the disputed provisions of the ZIKS alter his position in these proceedings. He points out that amendment XCVI to the Constitution of the

4 4 Socialist Republic of Slovenia established equality in the treatment of unjustly convicted persons and thus did away with the ideological barrier to the redress of wrongs done to victims of postwar conditions. - The petitioner Dr. Ljubo Sirc claims also that the European Convention on the Protection of Human Rights in connection with the resolution 1096 of of the Parliamentary Assembly of the Council of Europe has been violated. He thinks that the right to compensation for damage arises at the moment when an unjustified sentence has been annulled, and not as late as on the occasion of a final decision on the return of property, as stated in the reasons for the proposed text of the disputed law. In the opinion of the petitioner, the assertions in the reasons for the proposed text of the disputed law to the effect that "wrongs cannot be remedied entirely, that the burdening of economy would be too great, that Slovenia is a social state, that new wrongs should not be committed" do not justify why the legislator should not return the confiscated property in its entirety or give for it " fair material compensation". The petitioner further points out that in reference with retrospective effect of the disputed provisions the legislator is not justified in invoking public interest. In the opinion of the petitioner, it is precisely public interest and the principle of social state which require that property be returned as soon as possible to those who are capable of managing it and producing greater effects. He warns that the aim of confiscation in criminal proceedings had not been solely to take away property but to bring shame on entrepreneurs, and that those proceedings cannot be compared with nationalization proceedings. However, he considers that it would nevertheless be necessary to equalize the return of property to all rightful claimants. It would be necessary to apply the principles of the law on compensation, and the return should comprise the market value of confiscated property, and not the value established on the basis of laws and regulations. This is why the petitioner has also filed an initiative for the evaluation of constitutionality of the ZDen. The Constitutional Court has excluded this initiative and will consider it as an independent case no. U-I-137/98. - The petitioner Dr. Igor Levstek states that the disputed amendments to the ZIKS are a return to the time prior to the passing of the constitutional amendment XCVI and a departure from the principles of article 26 of the Universal Declaration of Human Rights. As the disputed provisions no longer recognize the right to the return of the profit lost, they supposedly reestablish the inequality which the Constitutional Court already abolished by abrogating article 92 of the ZDen. - The petitioners Jure Filipič and Mladen Terčelj state that the disputed law reestablishes the system which applied prior to the passing of the constitutional amendment XCVI. This supposedly constitutes a departure from the principles contained in article 29 of the Universal Declaration of Human Rights, and is justified by a facile conclusion that we are in the phase of transition, which should supposedly allow less rigorous abiding by constitutional and statutory provisions. They consider that the ZIKS, as a piece of legislation which regulates the execution of penal sanctions and is a sort of "professional " law, cannot interfere with provisions of article 13, paragraph 2 of article 539 and article 540 of the ZKP. - The petitioner Miha Jemec disputes article 145.c, for it no longer makes him entitled to full compensation for confiscated property as determined by Criminal Proceedings Act and Bonded Relations Act. He thinks that the modified arrangement is in conflict with article 30 of the Constitution and that, because of budgetary problems and the principle of social state, the legislator should not have interfered with the right of unjustly convicted persons to full compensation as recognized by all civilized nations. - The petitioners Alojzija Farič, Anica Cimperc, Alojzija Osvald and Mirko Lemež jun. in addition to articles 145.a and 145.c also dispute paragraph 3 of article 145 and article 145.č. In their initiative they also make reference to article 15 of the Constitution. They think that the disputed provisions hinder the exercising of the rights granted in articles 26 and 30 of the Constitution and deny the right to the elimination of the consequences of the violation of human rights and fundamental freedoms (paragraphs 1 and 4 of article 15 of the Constitution). They think that the legislator did not have any grounds which would allow, in accordance with paragraph 3 of article 15 of the Constitution and the positions of the Constitutional Court, the limiting of the rights grated by articles 26 and 30 of the Constitution. The rights of others, which the disputed provisions supposedly protect (the right of citizens to a certain state service which is financed from the budget or any other right) are not "of the same rank" as the rights under articles 26 and 30 of the Constitution. They point out that interference with the rights under articles 26 and 30 is not indispensable and appropriate. The state should cover

5 5 by other measures, in particular by reducing its expenditure and more efficient control, the increase in the costs resulting from the payment of compensation amounts. - Franc Zdolšek, Milan Zdolšek, Marko Zdolšek, Terezija Zdolšek, Marija Rep and Emilija Zdolšek think that the provision of article 145.a is in fact the provision of article 92 of the ZDen which the Constitutional Court has annulled, and that the legislator does not have any grounds for making their position equal to the position of denationalization claimants. The petitioners stress that their claim is exclusively a claim under civil law of compensation and that it is in no way connected with the nationalization of private property and subsequent denationalization. In the case of unlawful penal sanction of confiscation what is involved is unlawful acting on the part of a state body or a concrete judge, for which in relation to the injured party the responsibility lies with the state. They propose that the disputed provisions be annulled ab initio. 4. The National Assembly (reply of the Secretariat for Legislative and Legal Matters of , following the discussion at the Committee for Internal Policy and Judicature) considers that the disputed arrangement does not constitute a violation of the Constitution. In the case of the disputed arrangement, the legislator has taken into account the principle of the social state and the principle of equality of all persons whose property has been confiscated or nationalized after WW2, and the capacity of the community to fulfil all the obligations arising from the return of confiscated property. As the first major reason in reference with the evaluation one should take into account the fact that, with the disputed amendments relating to the return of confiscated property, the legislator has established equality between all the injured parties. He has taken account of the fact that the property of the injured parties would, in the case if there had not been any criminal sentence, become state property on the basis of some other legal provision. The other important reason, which supposedly justified the disputed arrangement, is the principle of the social state, which demands that the general financial situation in the state be taken into consideration. The state must act so that because of individual interests public interest will not be affected, and must consequently regulate the repairing of special damages according to the principle of proportional balancing of burdens, such as is appropriate for a social state, between the state and tax-payers. Special arrangement is also justified by the fact that more than 40 years have passed from the damage causing events and that during that period many changes of and instances of actual interference with confiscated property have occurred. Moreover, the explanation gives the information about the number and amounts of claims which, although incomplete, draws attention to the danger of insolvency of the state. The excluding of claims for the return of the profit lost was dictated also by the nature of this instrument of the law of compensation, which admits the return of benefit which the injured party would enjoy in normal circumstances and on the basis of reasonable and justifiable expectations. As of the period one cannot say that normal circumstances had been in existence and that they had involved the normally anticipated benefits of the injured party, the amount of the profit lost becomes questionable, for what is involved is the return of damage caused in quite specific circumstances. The assertions of the petitioners, that the disputed provisions interfere with accrued rights, are in the opinion of the opposite party unjustified. The legal basis for a claim for damage is established only after the annulling of the sentence of confiscation of property, which, however, does not imply that in this way one has acquired the right to a certain amount of compensation. The said right is acquired only on the basis of a final court decision, and this is why the disputed amendments and supplements do not interfere with the accrued rights of the injured parties. 5. The explanations of the opposite party was sent by the Constitutional Court to the petitioners, who on filed their initiatives for the evaluation of the disputed statute. In their replies, the petitioners stick to their initiatives, they repeat and supplement the statements in their initiatives and reply to the positions and reasons provided by the opposite party. The Constitutional Court sums up just those statements of the petitioners by which they reply to the positions and reasons provided by the opposite party. From the replies it is evident that for the petitioners the positions of the opposite party are unacceptable, or, they consider them to be in disagreement with the principle of lawgoverned state. In reference with the position, that the disputed amendments make equal the position of all persons from whom property has been confiscated after WW2, they point out that the state had considered the injured parties to be criminals and had confiscated their entire property, all of which had taken place prior to agrarian reforms and nationalization. In reference with the position, that the property of the injured persons would have been nationalized also in the absence of criminal

6 6 sentence, so that they would be entitled to request that the return be carried out on the basis of the ZDen, the petitioners point out that in many cases such finding is not true, in particular in the case of those who had owned small business plants, for these could no have been nationalized on the basis of Private Industrial Enterprises Nationalization Act (Julijana Zaletel, Olga Zaletel and Magdalena Betetto as well as Cecilija Pavlin, Amalija Murn and Hinko Kirn). They consider that the opposite party cannot invoke the principle of equality, for it the amendments themselves that have created inequality between those to whom confiscated property has already been returned on the basis of the ZIKS and those to whom it has not been returned yet. In the opinion of the petitioners the invoking of the principle of social state is also unfounded. The National Assembly took into consideration incorrect data, for the amounts actually requested are not that high, and the difference between the compensation amounts paid on the basis of the ZIKS and the ZDen is not so blatant. The amounts requested in actions (for damages), by which the opposite party justifies its insolvency, do not yet imply such damage amounts as are awarded, and it is inadmissible to use them in justifying the concern for social state.the consequences of the return of confiscated property should be dealt with by the state by different legal solutions, and not by abolishing the right to full compensation (Dr. Igor Levstek, Tomo Knez, Dr. Aleksander Majdič and Dr. Ljubo Sirc). In connection with the position, that the disputed provisions do not have retrospective effect, the petitioners in their replies insist that they acquired the right to compensation for damage on the basis of the legislation in force at the moment when they filed against the state actions for damages and petitions in the framework of nonjudicial proceedings, and that the disputed provision of article 3 interferes with their accrued rights. They point out that any amending of the ZIKS and equalizing of the same with the ZDen is a violation of article 155 of the Constitution, for the rights of the unjustly convicted persons are being reduced. B. - I. 6. The Constitutional Court in addition to the information specified in the legislative materials also took into consideration the information provided by the Supreme Court and the Ministry of Justice. 7. From the report of the Supreme Court the following is evident: - that the Supreme Court does not keep special records concerning the reopening of criminal proceedings which had been decided by final decisions prior to , in which the sentence of confiscation of property had been pronounced, so that information could only be collected by examining more than 1000 files; - that in the period (subsequent to , the Supreme Court is no longer competent to decide concerning the reopening of proceedings - article 557 of the ZKP), it adjudicated concerning the reopening of 9 requests for reopening criminal proceedings and allowed the reopening to take place for the benefit of 29 convicted persons (in 7 cases, confiscation of property was pronounced as the sentence); - that in the period , in reference with requests for the protection of legality (383 were filed during that period) it decided in favour of 774 convicted persons and that, having regard to the legislation then in force, which prescribed as mandatory the pronouncement of the sentence of confiscation of property, it is reasonable to conclude that the sentence of confiscation of property had been pronounced also in the case of a large number of convicted persons who were acquitted of all charges by the Supreme Court or where the same annulled the disputed sentence ab initio, this being the reason why it did not specifically decide concerning the sentence of confiscation of property; - that in 1997 three requests were filed for the protection of legality against final sentences dating prior to in which confiscation of property had been pronounced. All the requests were filed by the State Prosecutor's Office of the Republic of Slovenia, and the deadline for filing such requests by convicted persons and their relatives has already expired (article 559 of the ZKP); - that in 1997, it accepted requests for the protection of legality in 18 cases, in which the confiscation of property had been pronounced - in 5 cases it annulled the disputed sentences ab initio, in 10 cases a sentence of acquittal was pronounced and in 2 cases the sentence was changed, while in one case

7 7 the criminal proceeding was stopped; among these cases there were also such as concerned several convicted persons. 8. The Ministry of Justice informs that no information exists concerning the number of criminal sentences in which confiscation of property had been pronounced in the years 1945 and The information about subsequent years are as follows: year , year , year , year , year , year , year , year , year , year , year , year The Ministry further informs that the court should examine all the files, to be able to determine the number of reopenings which were decided by courts of first instance in which the sentence of confiscation of property was pronounced. By way of example, the Ministry states that at the circuit court in Ljubljana, in the period between and , 214 requests were filed for reopening the cases and that 111 requests were accepted. The Ministry also states that at the end of 1997 approximately 387 extrajudicial proceedings were in progress concerning the return of confiscated property and that in individual cases claims for compensation amounts were extremely high. Concerning the requests for compensation for the profit lost the Ministry also provides the information that the amount of claims sought by action, which was at the level of SIT 31 billion during the legislative procedure, has increased, for action has also been instituted in reference with the loss of profit in the amount of SIT 11 billion. 9. The Constitutional Court for reasons of joint consideration and adjudication joined the initiatives mentioned in section A of this Decision. All the petitioners satisfy the requirement of standing for disputing the revised ZIKS. From the initiatives and appended materials it is evident that all the petitioners demand before competent courts the return of confiscated property or the payment of compensation, and that court proceedings have not been brought to an end yet. In the case of the petitioner Dr. Aleksander Majdič, the Constitutional Court found that he satisfied the requirement of standing for disputing the revised ZIKS, for, on the basis of the decision of the Constitutional Court U-I- 249/96 of (Official Gazette of RS, No. 29/98), also those whose property had been confiscated on the basis of article 28 of the Act on Confiscation of Property and Execution of Confiscation (Official Gazette of DFY, No. 40/45) shall be entitled to lodge a request for reopening the proceeding in accordance with provision of article 416 of the ZKP, and will be entitled, if successful in the said proceeding, to request the return of the property in accordance with provisions of the ZIKS. 10. With conditions specified in paragraph 4 of article 26 of Constitutional Court Act (Official Gazette of RS, No. 15/94 - hereinafter: "the ZUstS") fulfilled, the Constitutional Court accepted the initiatives and immediately proceeded to decide on the merits of the case. However, it dismissed the initiatives of Alojzija Farič. Anica Cimperc, Alojzija Osvald and Mirko Lemež jun. in the part where they dispute the provisions of paragraph 3 of article 145 and article 145.č of the ZIKS. 11. Bearing in mind that the return of confiscated property has already been stayed twice by statute, and these are questions which should be resolved as soon as possible, the Constitutional Court at its meeting of resolved not to decide separately on proposals for staying the implementation and to consider the case as one with priority. Review of articles 145.a and 145.c of the ZIKS B. - II. 12. Article 30 of the Constitution provides that any person unjustly convicted of a criminal offence or arrested without due cause shall be entitled to rehabilitation, to compensation for damage and to such other rights as are afforded by statute. The said constitutional provision determines strict liability of the state for the damage in the case where, for any reason whatsoever (because of guilt or lack of it, lawful or unlawful reason), one was unjustly convicted or arrested without due cause. The right to the return of property which was confiscated by the pronouncement of the sentence of confiscation of property is not a special right but makes part of a single constitutional right granted in article 30 of the Constitution. Although the return of confiscated property under article 145 of the ZIKS by its substance does not constitute "the return of property" in the sense of rules governing the law of compensation but

8 8 means a special manner of regulating the institute of unjustified acquisition1, this right is constitutionally protected in the framework of article 30 of the Constitution, which grants to those persons who have been unjustly convicted of a criminal offence a universal right to the return of all damages. The said assumption was also used as the starting point by the legislator, which is evident from reasons given for the proposed text of the revised ZIKS, as well as from the provisions of paragraph 4 of article 145, which mentions "compensation" in the case where the return of confiscated property or individual parts of it is actually or legally no longer possible. 13. The right to compensation for damage resulting from unjustified sentence is the constitutional right of such person as has been injured by the consequences of an unjustified criminal sentence. What is involved is a special personal right, which can only be enforced by the unjustly convicted person. If, after his death, a person has been found to have been unjustly convicted, his heirs shall succeed to the right to compensation for damage in accordance with provisions of the ZKP and the general principles of the law of compensation2. The right of heirs to compensation for damage due to unjustified sentencing of their ancestor does not arise from article 30 of the Constitution but is constitutionally protected under articles 33 and 67 of the Constitution. 14. The sentences of confiscation of property had been pronounced by military courts already during the war on the basis of ordinances, decrees and instructions issued by military authorities and later on the basis of the Decree on Military Courts of (Gazette of the Headquarters of the National Liberation Army and Territorial Committees of Slovenia, no. 6/44). Confiscation of property was defined as the so called preservative injunction (article 16 of the Decree) and used to be pronounced in addition to the punishment. With the Act on the Types of Sentences (Official Gazette of DFY, No. 48/45 and Official Gazette of FPRY, No. 66/46), confiscation of property was defined as one of the sentences which could be pronounced by military and civil courts (article 1). It could be pronounce as the main sentence and as secondary sentence, and in just those cases where it had been expressly prescribed by statute. The court had to pronounce the sentence of confiscation of "all property" if it had pronounced a judgement of loss of citizenship. It implied compulsory seizure of all or part of property of a person for the benefit of the state and without the possibility of return. It was expressly provided that the sentence of confiscation of property could be pronounced against natural and legal persons (article 14 of the Decree). The sentence of confiscation of property as secondary sentence was prescribed by substantive criminal law until the adoption of the Penal Code of the Republic of Slovenia (Official Gazette of RS, No. 63/94), which no longer contains the sentence of confiscation of property. 15. The right to the return of confiscated property in the case of annulment of the sentence of confiscation of property was in the former legal system recognized already before the recognizing of the special right to rehabilitation and compensation for damage of the unjustly convicted persons (section 25 of this reasoned opinion), namely in the Act on the Execution of Sentence, Security Measures and Reformatory Measures (Official Gazette of FPRY, No. 47/51). The statute in article 91 contained substantially the same provision as is contained in the still applicable article 145 of the ZIKS and is, in accordance with the latest revision of the ZIKS, applied for the purpose of returning the confiscated property, if the (annulled) sentence of confiscation of property had been pronounced subsequent to The said statute and the subsequent Punitive Sanctions Enforcement Act (Official Gazette of SFRY, No. 3/70 - rectified text - came into effect on 1 July 1968) in their transitional provisions also did not exclude the return of confiscated property, if the sentence of confiscation of property was pronounced by a final criminal sentence prior to and was subsequently annulled. 16. By its content, article 145 of the ZIKS is a provision of substantive law which provides that confiscated property shall be returned to the convicted person or his heirs; if the return of confiscated property or individual parts of it is actually or legally no longer possible, the rightful claimants shall be entitled to "compensation"3, which shall represent the actual value of the confiscated property as per the time of the issuance of the decision on the return of property and in accordance with the situation obtaining at the time of confiscation. The provision of article 145 of the ZIKS, then, excludes the application of provisions of Bonded Relations Act (hereinafter: "the ZOR") on unjustified acquisition, which in the case where return is no longer possible grant just the possibility of compensation for the value of the benefit achieved, and it independently regulates the scope and manner of the return of

9 9 confiscated property after the sentence of confiscation of property has been annulled by a final decision. 17. The disputed article 145.a provides that in the cases where the sentence of confiscation of property pronounced prior to has been annulled on the basis of extraordinary legal remedies, concerning the forms and scope of the return, concerning the restrictions relating to the return and concerning the valuation of property, the general provisions of article 145 of the ZIKS on return of confiscated property shall not apply, and that the provisions of Chapter III of the ZDen, which contain special criteria regarding the valuation of property (article 44), restrictions regarding the return in kind (articles 19 and 27) and the excluding (as a rule) of the payment of damages - material compensation (articles 42, 43, 45, 46, 47, 48 and 50) shall be used on mutatis mutandis basis. 18. The disputed article 145.c excludes the recognition of "claims for damages arising from the impossibility of use or management and arising from the maintenance of real property, as well as those arising from any other claims relating to the loss of profit in accordance with the rules of the law of compensation", and thus excludes the application of general rules of the law of compensation, which grant, within the scope of compensation for ordinary damages, also the right to compensation for the profit lost. The claims arising therefrom are based on provisions of Chapter XXXII of the ZKP, which, with regard to compensation for damage due to unjustified sentencing, does not contain any special provisions, so that the general rules o the law of compensation on compensation of damages are used. This means that the unjustly convicted person is entitled to request the return of the entire material damage - the ordinary damage and the loss of profit. A similar provision as that of article 145.c of the ZIKS is also contained in the ZDen, in paragraph 2 of article 72, which also does not admit claims for damages arising from the impossibility to use or manage property and those arising from the maintenance of real property in the period from nationalization until the coming into force of the ZDen. The disputed article 145.c, then, represents a special regulation concerning the return of material damage in reference with the return of confiscated property (exception), which means that the general provision concerning the compensation for damage due to unjustified sentencing as determined in the ZKP and the ZOR are not to be applied. 19. As in the case of both of the disputed provisions what is involved is an independent, special manner of regulation of the question of the return of the property unjustly confiscated in the period until , the assertions of the petitioners to the effect that they are not in conformity with the ZKP and that the ZIKS in so far as "implementing law" should not regulate the return of confiscated property, are unfounded, which is why the Constitutional Court did not take them into consideration. 20. As is evident, the disputed provisions interfere to a certain extent with the constitutionally protected right to compensation for the damage due to unjustified conviction (article 30 of the Constitution); as for the cases where the return of confiscated property and compensation for material damage in the form of the profit lost in connection with confiscated property are enforced by heirs to the unjustly convicted person, the disputed provisions interfere with the right to own and inherit property (articles 33 and 67 of the Constitution). 21. The right to compensation for damage under article 30 of the Constitution is a right set in the Constitution without any statutory reservation. On the basis of paragraph 3 of article 15 of the Constitution, it may only be limited when this is necessary for the protection of the rights of others. The right to own and inherit property is in general guaranteed in article 33; paragraph 1 of article 67 then adds that the manner in which property is acquired and enjoyed shall be regulated by statute so as to ensure the economic, social and environmental benefits of such property, and paragraph 2 of the same article adds that the manner in which property may be inherited, as well as the conditions under which it may be inherited, shall be determined by statute. 22. The constitutionally guaranteed right to own property as a human right grants the individual the liberty in the field of property. Property is a basic human right, which is closely linked with the protection of personal liberty. Its function is to protect the freedom of action of the individual in the field of property, thus making it possible for everybody to freely and responsibly shape his life. As such it is a constituent part of the constitutions of democratic countries. According to the Universal UN Declaration of Human Rights as the first international codification of human rights, each person shall

10 10 have the right to own property either himself or together with others. The Convention on the Protection of Human Rights and Fundamental Freedoms (Official Gazette of RS, International Treaties, no. 7/94) - "the EKČP"), which determines a minimum common denominator for the protection of human rights in Europe, guarantees to each natural and legal person the right to the respect for his property (article 1 of the first Protocol). 23. The constitutional guarantee of property presupposes the existence of property as a legal institution. The subject of private property and the property entitlements which are protected are determined by the legal system by taking into consideration economic and social circumstances in general. In this connection this system must conform to the aim of the constitutional protection of property, that is, the ensuring and the realizing of personal liberty. That an essential component of such liberty is the disposing with things and rights associated with property has been decided already by the European Court for Human Rights (decision in the case Marckx versus Belgium of ), Publications, A.31, p. 27). The content of the property as legal institution depends at the same time on the functions assigned to it by the legal system. The fact that the individual is not unrestricted in his exercise of his property entitlements but must take into consideration also the interests of other members of the community and of the community as such already comes within the concept of property right according to the Roman law.4 The definition of property according to the Slovenian Constitution includes the social, economic and environmental functions of property (paragraph 1 of article 67). In determining the manner of acquisition and enjoyment of property and the conditions relating to the inheriting of the same, the legislator is thus obliged to balance the individual and community aspects of property. 24. In several decisions already, the Constitutional Court has adopted the position that interference with constitutional rights is subject to rigorous constitutional review in accordance with the so called test of proportionality. According to the latter, interference is admissible only in the case of being indispensable (unavoidable) in the protection of other human rights; neither may such interference be excessive, which means that only the most mild from among the possible forms of interference, which can ensure the constitutionally admissible and desired aim - the protecting of the equally important rights of others, is admissible. The legislator must prove that he cannot entirely protect the said right because by doing so he would interfere with other human rights. Even in the case where the Constitutional Court leaves it to statute to determine the manner of regulating a certain constitutional right (within the meaning of the provision of paragraph 2 of article 15 of the Constitution, or on the basis of the constitutional provision which specifically provides that the manner of exercising a right shall be regulated by statute), this does not mean that the legislator is not restricted in this connection. The principle of law-governed state (article 2 of the Constitution) requires that in this connection the legislator should act in conformity with the principle of proportionality. The legislator is in particular bound to act in such a manner where with a view to protecting other rights he restricts human rights and fundamental freedoms. Also, the legislator must always observe the principle of equality under article 14 of the Constitution and should in determining the manner of exercising, or in restricting individual human rights and freedoms not act in discriminatory manner. 25. In the case under consideration, the Constitutional Court first had to assess whether with regard to the limiting of the right to compensation for damage - to the excluding of the return of the loss of profit having occurred as the result of the confiscation of property, and with regard to the limiting of the right to the return of the actual value of confiscated property - indispensable (unavoidable) conditions were in existence. In the course of such assessment it took into consideration the reasons stated in legislative materials, and it also based its evaluation on other reasons as derived from individual historic sources and information of the Supreme Court and the Ministry of Justice. 26. From legislative materials (EPA II - expedited procedure, Journal, No. 5, of 20 January 1998) it is evident that the legislator interfered with the said constitutional rights due to the fact that, because of the extremely great number of annulled sentences of confiscation of property as pronounced in the early postwar years, full scope of compensation in reference with the confiscated property "is from the viewpoint of the burdening of national economy unacceptable", and that the principle of the social state dictates that a balance be established between parties entitled to the return of confiscated property an/or payment of compensation and those who will be under the obligation to fulfil the obligations arising from the right to the return of confiscated property and/or payment of compensation.

11 11 The legislator took as his starting point the assumption that also court proceedings, which had been based on criminal legislation and the sentencing policy of that time, were a means used in nationalizing the means of production. For this reason it is in connection with the redress of wrongs not decisive whether property had been nationalized on the basis of administrative or court (criminal) proceeding. The wrongs done through unjustified confiscations should thus be redressed in the context of redressing the wrongs of the past period, that is, according to identical criteria applying to all from whom property had been confiscated in any way whatsoever on the part of the state. For this reason to all those who had been sentenced to confiscation by final sentence pronounced in the period up till 1958 and subsequently annulled, property should be returned just in the framework of provisions of the ZDen, which uniformly regulates the redress of wrongs from the past.the legislative materials also provide the information of State Attorney's Office about the amount of the claims resulting from the impossibility of the return in kind (in 253 cases in total amounting to approx. SIT 37 billion), as well as about the amount of the claims arising from the profit lost (in 253 cases in total amounting to approx. SIT 31 billion). Further, the legislative materials also draw attention to the great number of pronounced sentences of confiscation of property, in particular in the early postwar years (year , year ), that confiscations included about 200 greater and smaller businesses and that confiscations resulted in the nationalization of approx. 41,000 hectares of agricultural land, 51,000 hectares of forests, 837 residential buildings and 874 business premises. It is also pointed out that former criminal legislation did not recognize the right to compensation for damage to persons unjustly convicted prior to Those persons have only acquired this right on the basis of the constitutional amendment XCVI to the Constitution of the Republic of Slovenia. 27. The Constitutional Court finds that the right to compensation for damage in the past used to be regulated differently and that the right to full compensation for damage in conformity with rules of the law of compensation was only admitted in the period when criminal legislation was made to include the basic principles of criminal law which guaranteed the legality of criminal proceedings (principle of legality, presumption of innocence) and which prevented the abuse of human rights and fundamental freedoms The right to compensation for damage was recognized in reference with unjustly convicted persons by Criminal Proceeding Code passed on 10 September 1953 (Official Gazette of FPRY, No. 40/53 - hereinafter: "the ZKP/54"). The unjustly convicted persons had the right just to the return of material loss. After the death of the rightful claimant, the compensation for damage was allowed to be requested by his/her spouse and relatives whom the unjustly convicted person had been obliged to maintain, but just to the extent of their suffering deprivation as regards their maintenance. In article 7 of the Introductory statute to the ZKP/54, the right to compensation for damage was recognized only to those who had been unjustly convicted prior to 1 January On the basis of article 6 of the Introductory statute, for reopening the proceedings decided by final sentence prior to provisions of ZKP/48 were applied, which, however, allowed the reopening just on the basis of a proposal by the Public Prosecutor of the Republic and Federal Public Prosecutor.6 The Constitution of FPRY of 1963 (Official Gazette of SFRY, No. 14/63) defined the rights to rehabilitation and compensation for damage as a human right. In paragraph 6 of article 50 it provided that the person who has been unjustly convicted for a criminal offence or who has been deprived of his liberty without a justified reason shall have the right to obtain compensation from public funds for the damage done to him. 29. The right to compensation for damage within such scope as is determined by the present provisions - the return of material and non-material damage - was admitted to the unjustly convicted persons as well as to those who were deprived of their liberty without justified reason by the Constitution of SFRY of In paragraph 4 of article 181, it provided that unjustly convicted persons and those who were deprived of their liberty without justified reason shall have the right to rehabilitation and compensation for damage from public funds and other rights determined by statute. 30. This provision was followed by Criminal Proceedings Act of 1977 (Official Gazette of SFRY, Nos. 4/77, 14/85, 74/85, 74/87, 57/89 and 3/90 - hereinafter: "the ZKP/77"), which in provisions concerning compensation for damage for unjustly convicted persons not only extended this right also to nonmaterial damage but also extended the right of heirs. Inheritability of the right to compensation for material damages was no longer limited only to the married pairs and relatives whom the person was