Euro, highway and civil law

AMONG laws adopted by Slovakia last year, measures linked to the adoption of the European single currency, amendments to speed up highway construction, the Press Code and new regulations related to pricing in the energy sector all attracted international attention.

AMONG laws adopted by Slovakia last year, measures linked to the adoption of the European single currency, amendments to speed up highway construction, the Press Code and new regulations related to pricing in the energy sector all attracted international attention.

Legal experts operating in Slovakia say that laws are still needed to address lobbying activities, support renewable energy sources, and oversee internet domain names. The Slovak Spectator spoke to lawyers Martin Magál, a partner at Allen & Overy Bratislava, Julián Juhász, from Squire Sanders, and Katarína Pecnová, from Salans, for the following brief survey.

The Slovak Spectator (TSS): Which were the most significant laws adopted in the Slovak Republic in 2008?

Martin Magál (MM): The adoption of the Lisbon Treaty in April 2008 and the legislative package for euro implementation as of 1 January 2009. For private individuals, the most noteworthy laws are likely to be the amendments to the existing consumer protection legislation, creation of the commission for assessment of terms in consumer contracts, the introduction of consumer loans interest caps calculated from average market rates from July 2008, the establishment of 100-percent protection of funds deposited in bank accounts effective as of 1 November 2008, and 100-percent protection of client financial instruments in custody effective as of 1 January 2009.

The various amendments to the second pillar pension saving system we also consider significant.

For companies, the amendment to the Commercial Code on cross-border mergers effective as of 1 January 2008, the act on European Grouping of Territorial Cooperation, and the act on disproportionate commercial terms were particularly relevant.

Interesting developments occurred in the regulated sectors. There is a new insurance act, and in the energy sector there is the act on price requests by commercial companies which introduced a condition that general shareholder meetings (rather than boards) have to approve all price requests addressed to the network industries regulator.

Julián Juhász (JJ): These include the revision to the Civil Procedure Code, which brings not only significant changes but simultaneously introduces some new measures. In a similar vein, there was a change to preliminary rulings.

New measures include for example a new type of verdict in the event that proceedings need to be shelved, as well as a new special proceeding relevant to generally binding directives by municipalities and higher territorial units.

We also regard the revision to the Civil Act as a positive development. It widens the definition of inappropriate terms in consumer contracts.

Katarína Pecnová (KP): The most important new legislation includes the revision to the Civil Procedure Code, which introduced some new institutions (for example in so-called petty-cash disputes, or in disputes over property ownership), the revision to the Civil Procedure Code effective as of October 15, 2008 which amended a number of aspects of procedural law (for example inheritance procedure) and laws and regulations pertaining to the adoption of the European single currency, even though the general law on euro adoption in Slovakia was passed in 2007.

Regarding the legislation on euro adoption, a quite large defect is that under the umbrella of “harmonization of laws due to the transition to the euro” various other regulations not directly related to euro adoption were affected, but the result of these changes has been difficult to determine.

TSS: Which important laws or legal norms does Slovakia lack?

MM: Despite heavy legislative activities and massive implementation of EU legislation, there is a long-lasting legal vacuum with respect to [internet] domain names in the Slovak Republic. Moreover more detailed legislation on the third sector and public-private partnership (in particular on concession dialogues) would be much appreciated.

JJ: Legislation, or a legal norm, is still absent with respect to arranging lobbying activity, which might regulate its existence and define its basic rules. Slovak legislation does not even recognise the term lobbying.

Also, laws pertaining to the support of renewable energy sources are inadequate. Even though Slovakia has prepared a Strategy on Higher Usage of Renewable Energy Sources, this does not fill the gap left by the absence of an independent law, which neighbouring countries have already passed.

A law would itself contribute to the general development of business in the alternative energy sector, with a positive impact not only on the energy sector but also the general development of Slovakia.

TSS: Which laws need to be revised in the future?

MM: Despite several amendments to the Civil Code and the Civil Procedure Code, a complex recodification of the civil law system appears overdue. Partial amendments, e.g. allowing an effective pledge over an entire enterprise, or the reinstatement of the possibility to wind up asset-free companies without liquidation would be welcome as well.

JJ: A number of revisions to individual acts will result only in a partial improvement of the existing state, but will be unable to solve systemic problems.

Instead of partial changes a number of acts require more far-reaching changes because despite numerous amendments many acts do not fully reflect all the needs of the present time.

Several acts require complex revision, for example the Construction Act, which was adopted in the 1970s under different social and economic conditions. Numerous revisions of it have brought only marginal solutions.

One of the inevitable changes is also re-codification of the Civil Code, which should be joined with family and commercial law. Codification of private law into a coherent form would make the legal order more transparent.

KP: These are civil law regulations pertaining to real estate, in particular the Civil Code (adoption of a new code, a complex revision of the law relating to rental of lands, buildings, apartments, and non-housing premises).

The act on ownership of apartments and non-housing premises is non-transparent, confusing and does not provide legal certainty and the latest revisions have only deepened the uncertainty in some cases.

Also, revision of the Competition Act, to allow, for example, the possibility of companies to announce their intention to merge, would be appropriate.

The civil codes (Civil Code and the Civil Procedure Code), which unlike many other important acts from the 1960s (Labour Code, the Act on Family, the Criminal Act and the Criminal Code) have not yet been re-codified, also require revision.

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