CEDH · CASELAW;DECISIONS;ADMISSIBILITY;ENG — 18 septembre 2012

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De Gaetano, judges, and Lawrence Early, Section Registrar, Having regard to the above application lodged on 29 August 2003, Having regard to the decision to examine the case simultaneously with the case of Pikielny and Others v. Poland (no. 3524/05), pursuant to   Rule   42 § 2 of the Rules of Court, Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicants, Having deliberated, decides as follows: THE FACTS 1.     The applicants, Mr Krzysztof Ogórek and Mr Karol Ogórek (the   applicants”), are Polish nationals, who were born in 1929 and 1928 respectively and live in Tarnów Opolski. They were represented before the   Court by Mr J. Forystek, a lawyer practising in Kraków. The Polish Government (“the Government”) were represented by their Agent, Mr J. Wołąsiewicz, succeeded by   Ms   J.   Chrzanowska, of the Ministry of Foreign Affairs. A.     The circumstances of the case 2.     The facts of the case, as submitted by the parties, may be summarised as follows. 1.     Background 3.     Before the Second World War the applicants’ father, Paweł Ogórek, owned a limestone plant which operated under the name “Limestone Plant Ogórek and Co.” ( Zakłady Wapienne Ogórek i Spółka ). The company also had a German name “ Kalwerke Ogórek et Co.” It was run by the applicants’ father before and during the war, until 1945. In 1945 the plant consisted of two furnaces, one limestone plant, a   smithy, an outhouse, office premises and 32 hectares of land, which included limestone deposits. 2.     Facts before 10 October 1994 [1] 4.     On 14 June 1948 the plant was nationalised by virtue of the Minister of Industry and Commerce’s ( Minister Przemysłu i Handlu ) decision (“the   1948 decision”) issued pursuant to section 3(1) and (5) of the Law of   3   January 1946 on the nationalisation of basic branches of the State economy ( Ustawa o przejęciu na własność Państwa podstawowych gałęzi gospodarki narodowej ) (“the 1946 Act”). The decision was published in the Cabinet’s Official Gazette ( Monitor Polski ) no. 58 of 26 June 1948 and took effect on that date. It was issued together with an annex listing companies, including the one belonging to the applicants’ father, which were subject to   nationalisation and stipulated that “... enterprises listed in the annex thereto shall be taken over by the State in return for compensation”. 5.     On 30 December 1990 the applicants asked the Minister for Economy ( Minister Gospodarki ) to declare the 1948 decision null and void. 3.     Facts after 10 October 1994 (a)     Proceedings for the annulment of the 1948 decision 6.     On 19 December 2001 the Minister for Economy refused the   applicants’ request of 30 December 1990. On 15 May 2002, following the applicants’ application for the matter to be reconsidered, the Minister upheld the original refusal. 7.     On 14 June 2002 the applicants challenged the above decision before the Supreme Administrative Court ( Naczelny Sąd Administracyjny ). On   an   unspecified date the case was referred to the Warsaw Regional Administrative Court ( Wojewódzki Sąd Administracyjny ). 8.     On 10 February 2004 the Warsaw Regional Administrative Court quashed the contested decision and the preceding decision of 19 December 2001 as being issued in breach of the law. It was stressed, in particular, that the Minister had failed to establish whether the nationalised enterprise had been capable of employing more than 50 persons on one shift, which was an   indispensable legal basis for nationalisation pursuant to section 3(1) B of   the 1946 Act (see also paragraph 38 below). 9.     On 30 July 2007 the Minister for Economy declared null and void the 1948 decision, finding that it had been issued in flagrant beach of the law since at the material time there had been no legal basis for the nationalisation of the applicants’ property. In the course of the proceedings, the authorities obtained expert reports determining the enterprise’s potential employment capacity on one shift vis-à-vis the technical equipment and its condition at the material time, bearing in mind war damage. It emerged from those reports that the plant had been partly destroyed and its potential production capacity had been severely limited due to the lack of electricity. This, in turn, justified the conclusion that its real employment capacity at   the material time had been not more that 42 people on one shift, not from 70 to 213 as estimated for the purposes of the 1948 decision. Consequently, nationalisation of the plant had been unlawful as, pursuant to section 3(1) B of the 1946 Act, it could only be effected in respect of enterprises employing a minimum of 50 persons on one shift. 10.     On 6 August 2007, relying on the above decision, the applicants asked the Minister for Infrastructure to annul the decision validating the acceptance protocol on taking over the nationalised property ( orzeczenie o   zatwierdzeniu protokołu zdawczo-odbiorczego ), issued by the Minister for Construction and Building Materials Industry ( Minister Budownictwa i   Przemysłu Materiałów Budowlanych ) on 29 November 1961. 11.     Since no action had been taken for some 17 months, on 21   January 2009 the applicants lodged a complaint with the Warsaw Regional Administrative Court, alleging inactivity on the part of the Minister for   Infrastructure. 12.     On 23 February 2009 the Minister for Infrastructure declared the   contested decision null and void, concluding that it had been issued in   flagrant breach of the law because it had been based on the 1948 decision found to have been ab initio unlawful. (b)     The proceedings concerning the alleged normative inactivity on the part of   the Prime Minister and the Cabinet (i)     Administrative proceedings 13.     On 11 February 2003 the applicants issued the Prime Minister a   legal notice, summoning him to “remove the state of infringement of   a   law” ( wezwanie do usunięcia naruszenia prawa ) by enacting the   Cabinet’s ordinance ensuring the proper implementation of the 1946 Act within 30   days from the date of service of that notice. The applicants relied on section 7 of the 1946 Act, by virtue of which a   Cabinet’s ordinance was to be issued in order to determine the rules governing the calculation and means of payment of compensation for nationalised property (see also paragraphs 39-40 below). They stressed that, despite the fact that although by that stage 57   years had elapsed from the   date of entry into force of the 1946 Act and despite the State’s legal duty to implement fully its provisions, the Cabinet had not yet enacted the   ordinance, thus making it impossible for the former owners to receive the promised compensation. They further maintained that the State authorities’ failure to act amounted to a constitutional tort ( delikt   konstutucyjny ) in the form of a legislative omission ( zaniechanie legislacyjne ) – for which both the former Prime Ministers of Poland and   the   current one had been responsible. Simultaneously, the applicants summoned the Prime Minister to pay them compensation in an amount of   30,000,000 Polish zlotys (PLN) [2] for the nationalised plant, together with statutory interest from 1 July 1949 (one year after the 1948 decision had taken effect) until the date of settlement. 14.     On 26 February 2003 the Prime Minister’s Chancellery, in its reply to the applicants’ notice, stated, among other things, the following: “In connection with [your legal notice] and acting on the Prime Minister’s instruction, I should inform you that there is no legal basis for the issuance of   the   ordinances referred to in sections 6 and 7 of the 1946 Act by the Cabinet. ... The statutory authorisation ( upoważnienie ustawowe ) to issue ordinances referred to   in section 7(4) and (6) [of the 1946 Act] sets out a range of matters for regulation. These are: the composition of the [compensation] commission, the rules for   the   appointment of its members, the quorum, the rules of procedure before the   commission, the rules for appeals against its decisions, the assessment of   circumstances relevant for compensation, the means of payment of compensation and determination of the amortisation of securities. It must be noted that the enactment of ordinances governing most of the above matters would be incompatible with the laws applicable at present. ... The matters regulated by [the 1946 Act] and [to be regulated] by the prospective ordinances relate to the constitutional right of property, a matter which is particularly designated for   regulation in the form of a statute. It is therefore doubtful that any statutory authorisation to issue an ordinance could transfer [to the Cabinet] the entirety of   the   matters included in the authorisation, the more so as there are already in place and in force statutory provisions enacted after the entry into force of [the 1946 Act]. Issuing today, on the basis of this Act, ordinances under its section 7(4) and (6) could lead to the incompatibility of statutory solutions (subsequent to the Act) with ordinances. ... [P]ursuant to Article 92 § 1 of the Polish Constitution, ... the enactment of   an   ordinance is admissible only on the basis of a detailed authorisation included in   a statute and in order to implement that statute. This authorisation must be   of   a   detailed nature in terms of the subject (must state an authority competent to   issue an ordinance), the object (must state the range of matters delegated for   regulation) and its content (must state the directions as to the content of   an   [ordinance]).... Pursuant to the Constitutional Court’s case-law, the absence of   directions is sufficient to consider the authorisation unconstitutional, even if   the   remaining requirements are met. ... First of all, the matters delegated in the [relevant] authorisation should have been addressed in [the 1946 Act] itself. The matter left by the legislature for regulation by   ordinances (e.g. the procedure for the appointment of members of the commission, the procedure for appeals, the amortisation of securities, questions of compensation) are of such importance for an individual and his or her constitutional rights and guarantees that they cannot be regulated by any means other than a statute. ... Moreover, the statutory authorisation in [the 1946 Act] does not contain directions. In sum, it should be concluded that in the light of the above arguments, it would not be legally admissible to issue the Cabinet’s ordinances on the basis of section 7(4) and (6) of [the 1946 Act].” 15.     On 11 March 2003 the applicants lodged a complaint under the   provisions of the law of 11 May 1995 on the Supreme Administrative Court (“the 1995 Act”) ( ustawa o Naczelnym Sądzie Administracyjnym) , alleging inactivity on the part of the Prime Minister in that the Cabinet had failed to issue an ordinance enabling the full implementation of   the   1946   Act. This, in their submission, was in breach of several provisions of the Constitution. 16.     On 21 May 2003 the Supreme Administrative Court rejected the   complaint as being inadmissible in law. It stated that under the   applicable laws its scope of jurisdiction over the State authorities’ actions or inactions was limited to their duties with respect to public administration and did not encompass any control of their competence in the sphere of the issuing of normative acts. (ii)     Proceedings before the Constitutional Court 17.     On 27 June 2003 the applicant’s lodged a constitutional complaint against the Supreme Administrative Court’s decision of 21 May 2003. They challenged the constitutionality of section 16(1) (1)-(4) of the 1995 Act in   so far as this provision denied them access to a court to seek compensation granted under the 1946 Act, in particular as it excluded the possibility of lodging a complaint about the inactivity of the Prime Minister, i.e. the legislative omission consisting in the failure to enact the relevant ordinance, as required by the 1946 Act. They further asked the Constitutional Court to declare unconstitutional section 7(1) (6) of the 1946 Act, in so far as it left to the Cabinet full discretion as to the date of payment and detailed procedure for   compensation and thereby deprived them of access to a court in order to   seek compensation for their nationalised property. Alternatively, they   asked the court to declare that 7(1) (6) of the 1946 Act was an illusory provision and as such could not be considered part of the legal order and,   on   the basis of this declaration, to discontinue the proceedings in   this   part. They invoked, in particular, Article 2 (rule of law), Article 21 (protection of ownership), Article 45 (right of fair trial), Article 64 (right of ownership) and Article 77 (right to compensation for unlawful action of public authority) of the Constitution and Article § 1 of the Convention and   Article   1 of Protocol No. 1 to the Convention. 18.     On 8 September 2004 the Constitutional Court discontinued the   proceedings. As regards the first limb of the complaint, it ruled so   on   account of the fact that section 16(1) (1)-(4) of the 1995 Act had lost its binding force. As regards section 7(1) (6) of the 1946 Act, it   discontinued the proceedings holding that ruling on the merits of this part of   the   complaint was inadmissible in law. In particular, it held that it could not review the constitutionality of section 7(1) (6) of the 1946 Act since, pursuant to Article 79 § 1 of the Constitution, a constitutional complaint could only be directed against provisions on the basis of which the courts or   administrative authorities gave a final decision on rights, freedoms or   obligations of the complainant. The contested provision was not a legal basis for the final decision examined by the Constitutional Court. Accordingly, it was prevented from dealing with the merits of this part of   the complaint. (iii)     Application to the Prime Minister for implementation of the 1946 Act or   decision 19.     On 20 October 2004 the applicants asked the Prime Minister to   ensure the enactment of an ordinance for the proper implementation of   the 1946 Act by the Cabinet or, alternatively, in case of his refusal to   do   so, to issue an individual, appealable administrative decision refusing to see to the enactment of that ordinance. 20.     On 20 November 2004 the Prime Minister gave a decision discontinuing the proceedings, relying on section 105 § 1 of the Code of   Administrative Procedure ( Kodeks postępowania administracyjnego ) by   virtue of which an administrative authority should discontinue proceedings if, for any reason, they had become devoid of purpose. In   essence, the reasoning was two-fold. First, the Prime Minister found that it was inadmissible in law to regulate the public authorities’ normative activity by means of administrative decisions. Such decisions could be   given only in the context of the application of the law, whereas normative acts were created in the completely distinct sphere of   law ‑ making. Secondly, the public authorities’ normative activity was their exclusive and, at the same time, sovereign competence and there were no grounds for interfering with this activity because, in his view, it would infringe the fundamental constitutional principles of the division of powers and the rule of law, as well as the competences of the constitutional authorities of Poland, namely the Cabinet. 21.     The applicants asked for the matter to be reconsidered. On   11   January 2005 the Prime Minister upheld the contested decision, reiterating that the issues raised by the applicants could not be addressed by   an individual administrative decision. 22.     The applicants appealed to the Warsaw Regional Administrative Court. 23.     On 12 August 2005 the court heard, and dismissed, the appeal. It   upheld the grounds given in the previous decisions, holding that an   administrative decision could be issued only in an individual case concerning a specific person and his or her concrete rights or obligations but not to compel an authority to enact a normative act, which in a general and abstract way regulates the legal situation of an unqualified number of   persons. It also held the following: “It should be stressed that the Supreme Court’s case-law underlines that the   Cabinet’s failure to discharge its duty arising from its competence to enact an   ordinance ensuring the proper implementation of a statute infringes the   constitutional principles of the functioning of a democratic state ruled by law (Articles 2 and 7 of the Constitution) and, accordingly, may constitute a constitutional tort. ... This court is of the opinion that the proper judicial protection of the applicants’ interests is secured in the provisions of the Civil Code. Article 417 1 of the Code invoked in the appeal makes it possible [for them] to seek damages caused by   the   legislative omission of the State Treasury.” 24.     The applicants lodged a cassation appeal with the Supreme Administrative Court ( Naczelny Sąd Administracyjny ), alleging a number of   procedural shortcomings on the part of the first-instance court and the   Prime Minister and a breach of Article 77 of the Constitution in that the   contested decisions had prevented them from pursuing their claim for damages arising from the state authorities’ unlawful acts – most notably their failure to enact the ordinance implementing fully the 1946 Act. On 8 November 2006 the Supreme Administrative Court dismissed the   appeal as lacking any legal basis. (c)     The applicants’ first claim for damages 25.     On 8 September 2003 the applicants sued the State Treasury, statio fisci the Prime Minister, before the Warsaw Regional Court ( Sąd Okręgowy ) for unpaid compensation for the nationalised company. They sought PLN   30,000,000 in damages, with statutory interest from 1   July 1949 until settlement, and PLN 24,000 by way of costs and expenses. They relied on   Article 77 of the Constitution and Article 417 of the Civil Code as   applicable on that date (see paragraphs 41-44 below). 26.     On 8 June 2004 the court gave judgment in default and granted the   applicants’ claims in their entirety. 27.     Following the defendant’s opposition, the case was reconsidered by   the Regional Court. The defendant asked the court to quash the judgment in default and to dismiss the applicants’ claims. 28.     On 9 December 2004 the applicants modified their claim for   payment of statutory interest, seeking payment only from 1 September 2004 until the date of settlement. 29.     On 21 February 2005 the court summoned the Minister for   the   Treasury to take part in the proceedings as the second defendant. 30.     In their pleading of 2 March 2006 the applicants altered the legal basis for their claims, stating that as those claims were based on a legislative omission on the part of the authorities consisting in their failure to enact an   ordinance pursuant to section 7(4) and (6) of the 1946 Act, they should be based on Article 417 1 § 4 of the Civil Code, which entered into force on   1   September 2004 (see paragraphs 42-43 below). 31.     On 14 March 2006 the Regional Court quashed the judgment in   default. It dismissed the applicants’ claims for PLN 30,000,000 in   damages and for costs and discontinued the proceedings in respect of   their claim for payment of statutory interest. The reasoning for the judgment was in essence based on the Supreme Court’s resolution of 24 November 2005 (cited below, see paragraphs 45-47 below). It read, in so far as relevant, as follows: “There is no dispute [between the parties] over the facts of the case ... The dispute is   limited solely to [the question] whether the claims brought in this case are   well ‑ founded in the light of the factual and legal bases relied on by the plaintiffs and to the amount of [compensation]. ... Considering the legal and factual basis invoked by the plaintiffs, their claims should be dismissed. Section 7 of the 1946 Act, on which they rely, in its original version provided that an owner of an enterprise taken over by the State would receive compensation from the State Treasury within 1 year from the date on which a notice of final determination of the amount of compensation due had been served on him. Such compensation was to be paid in securities, although in exceptional circumstances also in cash or other values, and its amount was to be determined by special commissions. ... Pursuant to section 7(4) and (6) the composition of the commissions, the rules for   the appointment of their members, the quorum, the rules of procedure and rules for   appeals against their decisions and the detailed rules for the calculation of   compensation and means of its payment and depreciation of securities were to   be   determined by the Cabinet’s ordinance. Despite [this] statutory authorisation, the above-mentioned ordinance (the failure to   enact it, which was to be the cause of the loss sustained by the plaintiffs) has never been enacted which, in consequence, made it impossible [for the authorities] to   establish the relevant commissions and to set up the procedure for   the   determination of the amount of compensation and its payment. Accordingly, this legislative omission, which has been relied on by the plaintiffs as   the cause of their loss, occurred in 1946 or, at the latest in 1947, assuming that in   general the absence of any time-limit for the enactment (a specific action) is   tantamount to a duty to enact an act implementing the law without undue delay. This opinion is supported by [the fact] that at the material time the Cabinet issued ordinances implementing other provisions of the 1946 Act. The same point of view was expressed by the Supreme Court in a resolution of 24 November 2005 ...[;] this court shares this point of view, and the applicants, when justifying their claims, have so far done the same. The provisions of the civil law as applicable at the material time, preceding the entry into force of the Civil Code, did not provide for the State Treasury’s liability for   legislative activity [or inactivity] of its agents. This situation did not change after the entry into force of the Civil Code on 1 January 1965, providing, in its Articles 417 and 418, for the State Treasury’s [tortious] liability, the scope of which did   not   encompass the State authorities’ legislative activity. ... By the same token, it cannot be assumed that the defendant’s civil liability for   the   consequences of the so-called legislative omission is based on Article 417, which, in contrast to what the plaintiffs tried to plead, does not embody the State’s legislative activity. This situation did not change radically on 17 October 1997, the date of entry into force of the new Constitution which, in Article 77 § 1, proclaimed the right to   compensation for any harm caused by an act of a public authority in breach of   the   law and the possibility of its direct application. While the above-mentioned provision of the Constitution undoubtedly refers to civil liability including the State authorities’ normative activity ..., this liability cannot be taken in the abstract from regulations concerning civil claims laid down in the Civil Code and specific statutes and, accordingly, cannot be an autonomous legal basis for this kind of claims. ... In view of the foregoing, the plaintiffs’ claims cannot be justified under Article   77   §   1 of the Constitution. ... Article 417 1 of the Civil Code, introduced ... on 1 September 2004 and invoked by   the plaintiffs could be a legal basis for their claim. This provision includes the defendant’s civil liability for the consequences of   the   so ‑ called legislative omission in case of a failure to enact a normative act, where there is a statutory duty to do so. However, pursuant to section   5 of   [the   relevant law amending the Civil Code], setting out the temporal scope of   the   operation of   [Article   417 1 ], excludes the possibility of its application to events and situations that occurred before the date of its entry into force, requiring [the   courts] to apply in   that regard the hitherto applicable provisions, including Article   417, which was   repealed by that law. It should therefore be concluded that both Article 417 and Article 417 1 of the Civil Code read in conjunction with Article 77 § 1 of the Constitution cannot be legal bases for granting the plaintiffs’ claims. ...” 32.     The applicants appealed to the Warsaw Court of Appeal ( Sąd   Apelacyjny ). On 5 December 2006 the appeal was dismissed. (d)     The applicants’ second claim for compensation for nationalised property 33.     On 8 April 2009 the applicants sued the State Treasury staciones fisci the Minister for Economy and the Minister for Infrastructure before the   Warsaw Regional Court, seeking damages arising from the   nationalisation of the limestone plant. They sought 26,000,000 [3] Polish zlotys (PLN) each and the costs of the proceedings. Later, they limited the   claim to PLN   16,756,228.50 [4] , an amount corresponding to the damage as   determined by experts appointed by the court. This sum included PLN   12,634,426.05 [5] for damage caused by exploitation of the limestone deposits by the State and PLN 3,895,607.25 [6] for damage caused by   nationalisation of the enterprise’s buildings, machines and technical equipment. 34.     On 20 June 2011 the Regional Court, relying on   Article   160   §§   1   and   2 of the CAP granted the applicants’ claim in   its   entirety. It awarded each applicant PLN 8,378,114.25 (i.e. the whole amount jointly claimed) with interest from 21   June 2011 and PLN   2,228 for   the costs incurred. The court held that there was no doubt that the   applicants had sustained loss that should be compensated by the State. That loss consisted in the value of the plant on the date of its nationalisation, the value of the limestone deposits exploited by the State and the costs involved in the rehabilitation of the nationalised land. 35.     The State Treasury appealed against the judgment 36.     The case was heard by the Warsaw Court of Appeal on 28 February 2012. The court fully upheld the Regional Court’s findings of fact and law and its assessment of evidence. It gave partial judgment. It rejected the   defendant’s appeal in so far as it concerned compensation for the value of the enterprise’s buildings, machines and technical equipment and upheld the award in this respect, granting each applicant PLN 1,947,803.62 [7] (i.e.   a   total sum of PLN 3,895,607.24). This ruling is final. The Court of Appeal postponed the examination of the remainder of   the   claim (compensation amounting to PLN 12,634,426.05 for damage caused by exploitation of the limestone deposits by the State). In   that   respect, it decided to obtain a fresh expert report in order to   determine the value of the loss actually sustained. The expert was appointed on 12 July 2012. The proceedings are pending. B.     Relevant domestic law and practice 1.     The 1946 Act 37.     Following the establishment of the communist regime in Poland nearly all branches of industry, as well as banking, insurance, transport and   commercial companies were taken over by the State under the 1946 Act which, in its section 1, stated the purposes of nationalisation as follows: “     In order to ensure the planned rebuilding of the state economy, the economic sovereignty of the State and to foster the general well-being, the State shall take over ownership of enterprises on the conditions laid down in this law.” Pursuant to section 2(1), only those industrial, mining, transport, banking, insurance and commercial enterprises that belonged to the Third Reich and the former Free City of Gdańsk, their citizens (except for those of   Polish or other nationality who had been persecuted by the Germans), German and Gdańsk legal persons (except for those set up under public law), companies controlled by German or Gdańsk citizens or administration or those owned by persons who had defected to the enemy were to be taken over by the State without payment of compensation. 38.     Section 3(1) of the 1946 Act (as amended) states that the owners of   the remaining enterprises were to be compensated for their nationalised property. That provision reads, in so far as relevant, as follows: “1.     The State shall compensate [the owners] for taking over ownership of   the   following: A.     Mining and industrial enterprises in the following sectors of State economy: 1)     mines and mining leases subject to mining law; 2)     oil and gas industry, including mines, refineries, gasoline production and other processing plants, gas pipes and synthetic fuel industry; 3)     companies that generate, process, transmit or distribute electricity ...; 4)     companies that generate, process, transmit or distribute gas ...; 5)     water supply companies serving more than one municipality ...; 6)     steelworks and non-ferrous metals smelting plants; 7)     armaments, aviation and explosives industry; 8)     coking plants; 9)     sugar factories and refineries; 10)     industrial distilleries, spirit refineries and vodka production plants; 11)     breweries with an annual output exceeding 15,000 hectolitres; 12)     yeast production plants; 13)     grain plants with a daily output exceeding 15 tons of grain ...; 14)     oil plants with an annual output exceeding 500 tons and all refineries of edible fats; 15)     cold stores; 16)     large and medium textile industry; 17)     printing industry and printing houses; ... B.     Industrial enterprises not listed in subsection “A” if they are capable of   employing in the production more than 50 persons on one shift. ... C. 1)     Transport enterprises (standard gauge and narrow-gauge railways, electric railways and aviation transport enterprises); 2)     communication enterprises (telephone, telegraph and radio enterprises). 39.     Section 7 lays down general principles for compensation to be paid for nationalised property. It states, in so far as relevant, as follows: “1.     The owner of an enterprise whose ownership has been taken over by the State (section 3) shall receive compensation from the State Treasury within one year from the date on which a notice of final determination of the amount of compensation due has been served on him. 2.     Such compensation shall in principle be paid in securities; however, in   exceptional and economically justified cases it may also be paid in cash or other values. 3.     The amount of compensation due shall be determined by special commissions. The persons concerned shall have the right to participate in proceedings before those commissions. If need be and in any case if so requested by the persons concerned, the   commission shall appoint appropriate experts. 4.     The composition of the commissions, the rules for the appointment of   their   members, the quorum, the rules of procedure before the commissions and   rules for appeals against their decisions shall be determined by an ordinance issued by the Cabinet. 5.     The following factors shall be taken into account in determining compensation: a)     general deterioration of the value of State property; b)     net value of the corporate property on the date of nationalisation; c)     deterioration of the value of the enterprise cause by war losses or losses incurred by the enterprise in connection with the war, occupation in the period from 1   September 1939 to the date of nationalisation; d)     value of expenditures made after 1 September 1939; e)     special circumstances affecting the value of the enterprise (concession terms, licenses etc.). 6.     A Cabinet’s ordinance shall determine detailed rules governing the calculation of   compensation, assessment of the circumstances listed in subsection 5 and means of   payment of compensation (subsection 2) and depreciation of securities.” 40.     Pursuant to section 10, the Cabinet and the relevant Ministers shall be entrusted with the implementation of the 1946 Act. However, since 5   February 1946, the date of entry into force of the 1946 Act, until the   present day the Cabinet has not yet issued an ordinance on   the   organisation of the compensation commissions and determination of   compensation referred to in section 7(4) and (6). 2.     The State’s liability in tort (a)     Provisions of the Civil Code applicable from 10 October 1994 to   1   September 2004 41.     Articles 417 et seq. of the Civil Code ( Kodeks cywilny ) provide for   the State’s liability in tort. In the version applicable until 1 September 2004, Article 417 § 1, which lays down a general rule, read as follows: “1.     The State Treasury shall be liable for damage caused by a State official in   the   performance of the duties entrusted to him.” (b)     Provisions of the Civil Code applicable from 1 September 2004 42.     On 1 September 2004 the Law of 17 June 2004 on amendments to   the Civil Code and other statutes ( Ustawa o zmianie ustawy – Kodeks cywilny oraz niektórych innych ustaw ) (“the 2004 Amendment”) entered into force. The relevant amendments were in essence aimed at enlarging the scope of the State Treasury’s liability in tort under Article   417 of the Civil Code – including the addition of a new Article 417 1 and provision being made for the State’s tortious liability for failure to enact legislation, a   concept known as “legislative omission” ( zaniechanie legislacyjne ). 43.     Following the 2004 Amendment, Article 417 1 , in so far as relevant, reads as follows: “4.     If damage has been caused by failure to enact a law [ akt normatywny ] where there is a statutory duty to do so, the incompatibility of the failure to enact that law shall be established by the court dealing with the claim for damages.” However, under the transitional provisions of section   5 of   the   2004   Amendment, Article 417 as applicable before 1 September 2004 applies to   all events and legal situations that subsisted before that date. (c)     Constitutional tort 44.     The concept of the State’s civil liability for a constitutional tort was introduced into the Polish legal order on 17 October 1997, the date of entry into force of the 1997 Polish Constitution. Article 77 § 1 of the Constitution states, in so far as relevant, as follows: “Everyone shall have the right to compensation for any harm done to him by any act of a public authority in breach of the law.” (d)     The Supreme Court’s case-law on compensation for legislative omission in   nationalisation cases (i)     The 2005 Resolution (no. III CZP 82/05) 45.     In its resolution of 24 November 2005 (“the 2005 Resolution”), the   Supreme Court ( Sąd Najwyższy ), sitting as a bench of three judges, dealt with the following legal questions submitted to it by the Warsaw Court of   Appeal ( Sąd Apelacyjny ): “     Is the State Treasury liable for damage caused by failure to enact a law [ akt   normatywny ] if the duty to enact that law, laid down in section 7(4) and (6) of   [the 1946 Act] was not fulfilled until the date of entry into force of   [the   2004   Amendment], and, if so, When this duty should have been performed and whether damages for failure to   enact the above law corresponds to unreceived compensation for the enterprise nationalised by the State, determined in accordance with the principles laid down in   section 7(2) and (5) of [the 1946 Act]?”. The question arose in the context of a case brought by a certain E.K., who sought damages for the nationalisation of her family’s printing house and, as one of the basis for her claim, invoked Article 417 1 of the Civil Code, relying on the State’s legislative omission consisting in its failure to   issue the relevant ordinance. 46.     The Supreme Court’s answer in the operative part of the resolution reads: “Until the date of entry into force of [the 2004 Amendment] the Cabinet’s failure to   issue an ordinance foreseen in section 7(4) and (6) of [the 1946 Act] did not constitute a basis for a claim by an owner of the nationalised enterprise for damages arising from [nationalisation].” 47.     The resolution contains extensive reasoning, the main thrust of   which reads as follows: “[As regards the time-frame for the issue of the ordinance]. The determination of   the   beginning of that situation carries with it a certain element of arbitrariness since [the 1946 Act] does not lay down any term within which the ordinance referred to   in   section [7] (4) and (6) should be issued. Assuming that in general the absence of   a term is tantamount to a duty to enact a law without undue delay, it can be   considered that the discharge of the statutory authorisation, assuming the existence of willingness of the authorised body (the Cabinet) should have taken place in 1946 or   in 1947 at the latest. This is supported by the fact that the Cabinet issued ordinances implementing other provisions (including section 2(7) of the Act, a   fundamental provision for the interest of the State). [As regards the State’s civil liability for legislative omission], ... it should be   concluded that before the entry into force of the 1997 Constitution the State had not been liable under civil law for the consequences of its legislative inactivity. ... 17 October 1997, marking the entry into force of the Constitution is the relevant date as its constitutes the beginning of the existence in the legal order of, inter alia , Article 77 § 1 of the Constitution, proclaiming the right of “everyone” to   compensation for any harm done to him by any act of a public authority in breach of the law .... Assuming that Article 77 § 1 does not contain a provision making it possible to   draw from it a direct basis for a claim for damages for the legislature’s inactivity, it   must be said that the rules for the State’s liability in the sphere of law-making should be established by means of an ordinary statute, determining in a more detailed manner than Article 77   §1 premises for an effective claim. ... Article 417 1 § 4 of the Civil Code, as introduced by [the 2004 Amendment] satisfies the requirement of detailed premises. The relevant temporal consequences have been clearly set out in its section 5, evidently indicating the prospective operation of   Article   417 1 § 4 of the Civil Code. A formulation laying down a non-retroactive character of the provision is telling in that it refers to “events and legal situation that subsisted before its entry into force” ... In consequence, the assessment of the effects of legislative omission subsisting before 1 September 2004 was governed by [earlier provisions]. The relevant Article 417, in its version before the amendment, did not include legislative omission as it was based on a completely different premise, namely, the absence of the State’s civil liability for the legislature’s acts. ... “ (ii)     The 2007 Judgment (no. I CSK 273/07) 48.     On 5 December 2007 the Supreme Court, sitting as a bench of three judges, dealt with a cassation appeal ( kasacja ) lodged by Lubelska Fabryka Maszyn i Narzędzi Rolniczych “Plon” , [8] a limited liability company which was at that time subject to a winding-up procedure. The appellant contested the judgment of the Warsaw Court of Appeal of 2 February 2007, rejecting its appeal ( apelacja ) against the judgment of the Warsaw Regional Court of   30 May 2006 whereby its claim for damages arising from the State’s failure to issue the relevant ordinance, pursuant to section 7(2) and (5) of   the   1946 Act, had been dismissed. The claim was based on Article   77 of   the Constitution and Articles 417 and 417 1 § 4 of the Civil Code. In dismissing the cassation appeal, the Supreme Court essentially reiterated the grounds stated in the 2005 Resolution (see paragraph   25 above), stressing that the impugned legislative omission occurred in 1946 or, at the latest