[Though the following post has nothing to do with Russia, I had been receiving some questions so I am making this information available to those interested. --Thanks, RA]
As announced in a press release dated 9 December 2009, my law firm, Amsterdam & Peroff, has been retained by RPG Industries to defend its fundamental rights and interests in the Czech Republic. The case, which already had a political dimension given the intervention attempt on behalf of a member of government, has taken on a much larger meaning in national politics as this week we announced at a press conference the introduction of a historic complaint before the Constitutional Court regarding the separation of powers and other basic guarantees.
It is my argument that certain members of the Czech Social Democratic Party (CSSD) are acting in violation of the constitution to carry out a classic populist tactic right before an election - promising voters an intervention against private property to purchase their support. Nevertheless, in legal terms, their claim is groundless.
Our firm working with Jan Kalvoda, one of the leading Czech constitutional specialists, to argue this important case, which I believe sets a significant precedent in striking a blow against a la carte respect for judicial independence. From a legal standpoint, the pleading is not only a clarion call for the separation of powers, but also seeks to open a national debate on relations between the public and private sectors.
The overall case involves the interpretation of a privatization agreement between RPG and the government of the Czech Republic regarding the acquisition of 45,000 apartment units of the former OKD mining company in Ostrava. Specifically, there has been a long simmering dispute over the interpretation of a clause in the agreement relating to a first right of refusal in the event of a sale. However, as 45,000 units represent more than 100,000 votes in a country where elections are won or lost on the slimmest of margins, some political opportunists have begun to spread lies and misinformation to the tenants about the contract.
Mr. Lubomir Zaorálek, a majordomo of the CSSD and the chairman of Parliament's Chamber of Deputies, has jumped into the dispute and used his offices to launch a public attack campaign against RPG. Mr. Zaorálek claims to speak on behalf of all the tenants, and, joined by party leader, Jiří Paroubek , has promised voters that if elected he would seize control of the properties and force their sale at the original discounted price - despite the 6 billion koruna investment made by RPG into renovations. The absurdity and illegality of Zaorálek's conduct is detailed in our constitutional complaint.
Our position is that RPG has fully complied with all the terms and requirements of the contract - a fact which is proven by the conclusion of an independent audit. Rather than allowing the audit results to stand, Mr. Zaorálek, without notice to RPG, places before the Chamber of Deputies certain resolutions which have essentially issued a decision that RPG had breached its contract with the state.
As the lawyers among you no doubt imagine, this act is ultra-vires, that is beyond the power of the legislature. It is not for the legislature to make legal filings with respect to a specific case, and thereby vitiate the separation of powers and as well clearly discriminate against the legislative victims. Nor is it common to see the legislature being used to personally attack and slander individuals.
Our legal theory is that Zaorálek had instrumentalized the Chamber, and in fact the State, for an improper purpose, which lacking any other motive, we can only presume is directed toward buying votes for the upcoming elections by promising to force a sale of private property. It is not an unprecedented measure for a populist politician to take, but it is surprising that it can still happen in a democratically mature and stable country with rule of law such as the Czech Republic.
Just a few hours following our announcement of the constitutional challenge, Mr. Zaoralek held a press conference in reaction. I was personally described as "a political mercenary," and he accused my client and I of attempting to squelch parliament's right to free speech. The CSSD's definition of free speech apparently means that parliament can usurp the powers of the judiciary when it chooses to do so.
I will continue to post updates on this case and other political trends in Central Europe, so stay tuned for more developments.
