Legislative developments in Slovenia
Markus Bruckmüller and Branko Cevriz
Wolf Theiss
Ljubljana
Markus Bruckmüller (Bio)
Branko Cevriz (Bio)
By means of recent legislative developments, the legislator in Slovenia is striving to revive the economy, which is still affected by major liquidity issues. The electronic modernisation of submissions to court and financial innovation efforts are further attempts to encourage new investments, and foster economic growth.
Act on Prevention of Late Payments
With the intent to enhance payment discipline and reduce delays in payment, the new Act on Prevention of Late Payments (the Act) has been passed, which implements EU Directive 2011/7/EU on combating late payments in commercial transactions. The Act is applicable to payments agreed upon in commercial contracts for delivery of goods or services between business operators and between business operators and public authorities. It does not apply to financial contracts. The Act limits contractual freedom by stipulating a mandatory length of deadlines for payments (30 days for public entities, 60/120 days for business operators) and providing for voidance of grossly unfair contractual provisions. It further introduces a duty for debtors to register due monetary obligations electronically via a website of the Slovenian agency AJPES (www.ajpes.si) in a compulsory multilateral set-off mechanism. The Act also includes a new register of bills of exchange that have been protested due to non-payment, which is open to the public.
Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act
Numerous misuses of compulsory composition proceedings with the aim to postpone inevitable bankruptcy proceedings have triggered an amendment to the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (the Insolvency Act). Therein, a debtor in compulsory composition proceedings has to offer payment of at least 50% of the outstanding debts and may propose a delayed payment for a maximum period of four years in the financial restructuring plan.
Land Register Act
Recent amendments to the Land Register Act mean a step towards abolishing the traditional procedure for registration forms to be submitted to the land register courts. The relevant amendments have enacted the mandatory submission of registration forms with appendixes in electronic form to the courts. Primarily, the submissions should be entered via a notary public acting on behalf of the applicant. However, the amended Land Register Act still provides that the vast majority of registrations may also be submitted directly by the applicant (natural person or legal entity) or attorneys and real-estate agencies. Simultaneously, the amendments have transferred the responsibility for depositing original documents (e.g. contracts) that were attached to the submissions from the courts to the notary, whereby the notary's confirmation of authenticity renders the evidence value of the electronic version equal to that of the original. The amendments enable free access via a web-portal to the contents of the land register, including pending notations, and to land register extracts, neither of which were free of cost prior to the reform. However, please note that the electronic land register extracts do not provide current information on any notations pending with the land register court where registration proceedings have been initiated before May 1 2011. With respect to the aforementioned pending proceedings, it is still necessary to inspect the documentation at court.
Companies Act
Recent amendments to the Companies Act, which became effective in May 2011, address a common issue of conflict of interest in corporate governance. The new provision prescribes that a member of the management board, a holder of a special statutory authority or a CEO of a corporation or limited liability company is statutorily obliged to obtain the consent of the supervisory board, the board of directors or, if the company does not have either of these, the consent of the shareholders meeting, before concluding a contract with another company of which they or one of their close relatives hold 10% or more interest in the share capital, of which they or one of their close relatives are a silent partner or where, due to any other legal ground, they or one of their close relatives participate in the distribution of profits. In cases where the interest in the share capital of the relevant other company does not reach 10%, the respective addressee is only obliged to inform the aforementioned bodies within three working days of the conclusion of the contract. The civil sanction for the absence of such consent is voidance of the contract, whereas conclusion of the contract without this consent and failure to give notice (in the case of share capital below 10%) also constitutes an offence.
Enforcement Act
Amendments to the Enforcement Act aim at easing enforcements in cases where creditors face evidently unsubstantiated objections in enforcement proceedings. This concerns the enforcement of claims based on bills of exchange and checks where the debtor raises an objection, and also enforcement proceedings grounded on other statutorily defined documents (e.g. invoices) where the debtor's objection merely and generally denies the existence of any contractual obligation. In both cases the creditor is granted the option of filing for a preliminary injunction. Thus, the creditor gains collateral for his claim, which effectively strengthens his position in the proceeding.
Financial Collateral Act
Slovenia also amended the Financial Collateral Act by implementing the Directive 2009/44, inter alia, Directive 2002/47 on financial collateral arrangements with regards to linked systems and credit claims. These amendments have introduced credit claims as available financial collateral and have added them as eligible collateral to cash and financial instruments (shares, bonds and other securities). The amendments will be applicable as of June 30 2011. Pursuant to the provisions of the amendments, credit claims are pecuniary claims arising out of an agreement whereby a credit institution granted credit in the form of a loan. However, in accordance with Directive 2009/44, consumer loans are excluded as eligible financial collateral unless the lender is a certain credit institution as defined by law (central bank of one of the Member States, the European Central Bank, IMF, European Investment Bank, etc.). Furthermore, according to the amendments, in cases of a default, the collateral taker is entitled to keep the credit claims, to sell or to set them off against its secured claims.