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Tax & Legal Alert, March 2020, Issue 3
On 25 March 2020, the National Council of the Slovak Republic passed Act No. 62/2020 Coll. on Certain Emergency Measures in Relation to the Spread of the Dangerous Contagious Human Disease COVID-19 and in the Judiciary amending certain laws (“Lex Corona”), which entered into force and became effective on 27 March 2020 upon its publication in the Collection of Laws of the Slovak Republic.
As Lex Corona will impact the business environment and society as a whole, we would like to give you an overview of the changes and temporary measures it will introduce.
Lex Corona suspends until 30 April 2020 all statutory limitation periods (i.e. the deadline by which a party must bring its claim) and statutory extinction periods (i.e. deadline by which the concerned right expires). Deadlines between 12 March 2020 and 27 April 2020 will be renewed and will not fall sooner than 30 days after the entry into force of Lex Corona, i.e. on 27 April 2020. This measure is meant to ensure that individuals and businesses do not have to exercise their rights during the pandemic or worry about losing their rights as a result of statutory limitation periods or statutory extinction periods.
Procedural time limits set forth by legislation or determined by the courts are suspended until 30 April 2020. Therefore, the time limits set by law or by the court are suspended, including the time limit for filing an appeal, the time limit for completing a submission, and the time limit for commenting on a counterparty's submission. However, if a case cannot be delayed, the court will be entitled to apply the original procedural time period or set a new time period. It is expected that this measure will alleviate the pressure on parties to proceedings.
In criminal proceedings, the time limits will be suspended until 30 April 2020, but only with respect to the accused, their attorney, the injured party and the involved party. Procedural deadlines will not be postponed in relation to the state, as it is legitimate to expect the public prosecutor's office to function properly even during an extraordinary situation and state of emergency.
This measure intends to reduce the number of court hearings held during the extraordinary situation and the state of emergency to the indispensable minimum. Indispensable hearings that must be held include main trials in custody cases in criminal proceedings, hearings in juvenile custody cases, and other hearings in the absence of which irreversible damage, or other serious irreversible consequences may occur. Whether or not a hearing will be held will be decided by the concerned judge or senate.
In addition, new grounds for excluding the general public from court hearings, main trials and public sessions have been introduced, namely the protection of health in the state of emergency. In the event of excluding the public for this reason, the court is obliged to make an audio recording of the hearing, trial or session and make it available after the hearing.
The time period for filing a debtor's bankruptcy petition is extended from the current 30 days to 60 days if the debtor's bankruptcy occurred between 12 March 2020 and 30 April 2020.
During the extraordinary situation and state of emergency collective bodies of legal entities (established under civil law and commercial law) may adopt per rollam decisions, i.e. by correspondence voting, and may enable participation at meeting of these bodies by election even if this does not follow from their internal regulations or articles of association. In such a case, the provisions of Sections 190a to 190d of the Commercial Code shall apply mutatis mutandis.
In practice, these changes apply not only to decision-making at general meetings, but also to the decision-making of other collective bodies, e.g. the Board of Directors or the Supervisory Board. These meetings may also be organized by correspondence or electronically.
No right of pledge may be enforced until 30 April 2020. Any actions leading to the enforcement of a pledge performed between Lex Corona’s effective date and 30 April 2020 will be ineffective.
Lex Corona also introduces a temporary ban on auctioning, authorizing sale of property, organizing a bidding process or other competitive process, and enforcement by sale of property. If any of these actions are performed between Lex Corona’s effective date and 30 April 2020, they will be considered null and void.
Lex Corona also introduces a special regime for processing data that is otherwise protected by telecommunications secrecy (location data and personal data of the communicating parties: first name, surname, title, and address of permanent residence of an individual). Businesses providing telecommunications services must process the above data during the extraordinary situation and state of emergency, (i) in anonymised form for statistical purposes to prevent danger to life and health, (ii) for the purpose of identifying the users to who a message for the protection of life and health needs to be sent, and (iii) to the extent necessary to identify users to protect life and health, and shall provide such data to the Public Health Authority of the Slovak Republic on the basis of a justified request.
These data may be processed and stored by the Public Health Authority during the time of the extraordinary situation or state of emergency until 31 December 2020.
Another temporary measure, applicable during the extraordinary situation or state of emergency, lifts the ban on contracting with entities not registered in the Register of Public Partners Sector provided that (i) the requirements for a direct negotiated procedure are met, or (ii) the procurement procedure relates to a low-value contract. The aim of this amendment is to facilitate the procurement of goods and services, or construction services as necessary, during the extraordinary situation or state of emergency, in order to protect life and health.
Lex Corona also addresses the current situation in the Judicial Council of the Slovak Republic and the Supreme Court of the Slovak Republic:
The reasons for the dismissal of the President of the Judicial Council of the Slovak Republic have been extended so the Judicial Council may dismiss the President of the Judicial Council if their continued presence in office would seriously jeopardize the credibility or the good reputation of the judiciary.
If the office of President of the Supreme Court of the Slovak Republic becomes vacant, the oldest judge of the Supreme Court of the Slovak Republic will perform the essential duties of the President of the Supreme Court.
Partner, CEE TLP Clients & Markets Leader, PwC Slovakia