No Match Found
The measure of reviewing foreign direct investment, adopted based on the Intervention Measures Act for Mitigation and Elimination of the Consequences of the COVID-19 Epidemic (Official Gazette of the Republic of Slovenia, No. 80/20, with amendments), will cease to be applicable on 30 June 2023; nevertheless, the mere obligation of submitting the FDI notification will not cease. The National Assembly of the Republic of Slovenia has adopted a proposal for an amendment to the Investment Promotion Act, which, as of 1 July 2023, still mandates reviewing FDI notifications, while introducing significant novelties.
On January 1st, 2023, a Law on Due Diligence of Companies in Supply Chains (ger. Gesetz über die unternehmerischen Sorgfaltspflichten in Lieferketten) will come into effect in Germany. This law binds larger German companies, meaning companies with at least 3,000 employees (by 2024, this number shall be lowered to only 1,000 employees), to adopt measures to ensure a more sustainable operation of their company and likewise monitor the measures of their direct and indirect suppliers in this area.
As Germany is Slovenia's largest trading partner, it is likely that this law will impact Slovenian companies in the supply chain of larger German companies, as well.
In early 2020 the Covid-19 pandemic caused drastic changes that significantly affected our daily lives and many contractual relationships. As a result, majority of shops, restaurants, accommodation facilities, sports, wellness and other services were practically closed overnight. The consequences of restrictive measures have raised a number of legal issues, including in the area of contract law. One of the most common question raised in practice was whether the announcement of pandemic and imposed restrictive measures enables the contractual parties to claim an exception from the pacta sunt servanda principle ("duty to fulfil contractual obligations") due to force majeure.
The act amending the Housing Act (SZ-1E), which entered into force on 19 June 2021, introduced an important new feature, namely that the Act on Business Buildings and Business Premises (hereinafter referred to as “ZPSPP") ceased to be in force with the application of this amendment.
However, the act in question still applies to agreements concluded on the basis thereof before its entry into force. Consequently, as of 19 June 2021, the provisions of the Obligations Code (hereinafter referred to as the “OZ”) and the provisions of the lease agreement itself are observed for leases of business premises. For the parties of the lease agreement this means greater freedom in regulating the lease relationship as the detailed and mandatory rules of the ZPSPP no longer apply.
(Only) 5 Months Left to Comply with the Legal Obligation of Entering the Company's E-mail Address into the Register
In accordance with the latest amendments to the Companies Act (ZGD-1K, Official Gazette of the RS, No. 18/2021 as at 9 February 2021), capital companies, limited partnerships, economic interest groupings and branches of foreign companies applying for their first entry in the court register, shall also provide the company's e-mail address. The existing companies shall enter their e-mail address in the register within 1 year of the entry into force of the respective amendment, that is until 24 February 2022.
The European Council (EC) adopted SRD II in June 2017 to encourage shareholders engagement in listed companies in the EU and improve the transparency of related processes, including proxy voting. SRD II is an update to SRD I, and adds requirements related to remunerating directors, identifying shareholders, facilitating the exercise of shareholder rights, transmitting information and providing transparency for institutional investors, asset managers and proxy advisors. SRD II aims to stimulate shareholders’ long-term engagement, increase transparency in the voting process in relation to both proxy voting and shareholder identification, and to improve issuer-investor dialogue.
The Member States of the EU were obliged to transfer the majority of the provision of SRD II into national law by June 2019. SRD II is extensive and will entail significant as well as costly changes related to process reforms and transparency requirements, which will affect issuers, asset managers, custodians, central securities depositories and a range of other intermediaries and service providers. In addition, SRD II affects also third-country firms providing certain services.
To sum it up, shareholders’ identities will be disclosed when they hold more than a threshold share of issued capital. By default, this threshold is set at minimum 0.5% of an issuer’s capital, but EU Member States may opt out of this threshold. Investors and shareholders will have increased rights at general meetings, access to investment strategy information, as well as better insights into proxy advisors’ actions and into establishment of voting instructions.
SRD II, as an amending Directive, will require transposition into each EU Member State’s national law. EU Member States shall adopt laws, regulations and administrative provisions necessary to comply with SRD II by 10 June 2019. Slovenia has already transposed the provision of the SRD II into the new proposal of the Companies Act (ZGD-1K), which is currently in public discussion and awaiting for a final confirmation.
The Trade Secrets Act (Official Gazette of RS, no. 22/19 dated 5th of April 2019), which redefines the definition of trade secrets, will enter into force on 20 th of April 2019. So far, trade secrets have been regulated by the Companies Act (CA-1) and other sectoral laws.
The new law transposes the Directive (EU) 2016/943 into the Slovenian legal order. Its transposition into the national legal orders of the Member States of the European Union should ensure that there are no major differences between their arrangements of this field. The Trade Secrets Act is a substantive and procedural regulation that defines the definition of trade secret, as well as procedures and measures in the event of violations.
The purpose of the law is to regulate the field of trade secrets in a comprehensive and unified manner, thus defining a new definition of trade secrets which replaces previous definition set forth in the CA-1 and the Employment Relationships Act (ZDR-1). Trade secret covers undisclosed expertise, experience and business information that is secret and not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question, has a commercial value and it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.
The Trade Secrets Act further distinguishes between the lawful and unlawful acquisition, use and disclosure of trade secrets and stipulates judicial protection. In order to immediately stop the unlawful acquisition, use or disclosure of trade secrets (even in the case of services), before a meritorious decision, the law also allows the issuance of a temporary injunction.
On 11 December 2018, the Grand Chamber of the European Court of Human Rights issued a judgment in the case Lekić v. Slovenia at a public hearing, declaring that there was no violation of Article 1 of Protocol No. 1 to the European Convention for the Protection of Human Rights and Fundamental Freedoms (Protection of Property). The complainant complained that Slovenia, by adopting the legal system on the basis of which the company whose company member was erased from the court register and who personally became responsible for its debts, violated his right to peaceful enjoyment of property.
The Court found that the measure which determined that the complainant was personally liable for the debts of the erased company of which he was a partner, was undoubtedly an interference with the peaceful enjoyment of property, however, the measure in question was lawful. The main purpose of the State's intervention in the rights of the complainant was in the public interest since it wanted to ensure financial stability in the economic market in a transitional period from a socialist to a free market economy through a newly adopted legal system.
In light of the above and taking into account the other circumstances of the particular case, the court found that the transfer of responsibility for the company's debts to the complainant did not constitute a disproportionate measure and not an excessive individual burden for the complainant.
On 27 April 2018, the Act on the Termination of Proceedings Against Shareholders of Deleted Companies entered into force, under which all civil, administrative and enforcement procedures were terminated in which creditors or creditors of the erased companies claimed claims against shareholders or members of such company or their legal successors or successors who have not yet finished. According to the decision in the relevant judgment where human rights violations have not been established and in accordance with Article 2, paragraph 1 of the APMLD, it is expected that the interrupted proceedings will continue in the short term.
Read the whole decision here.
Sanja Savič M.Sc.
Director, Legal, PwC Slovenia