Special regimes of the right of lien in other Slovak legal regulations and their relationship to the Civil Code

The regime of the right of lien is uniform in the Slovak legal order. There are, however, certain special regimes of the right of lien as regards particular specific areas that require such a special approach. Special regimes of the right of lien in legal regulations other than Act No. 40/1964 Coll., the Civil Code, as amended (hereinafter the "CC"), stand in relation to the CC, which contains the general regime, as lex specialis. The general regime of the right of lien contained in § 151a et seq. of the CC applies wherever a special act does not lay down a special regime.

The right of lien over a business share

The creation of a right of lien over a business share is addressed in § 117a of Act No. 513/1991 Coll., the Commercial Code (hereinafter the "ComC"). The validity of a contract to create a right of lien whose subject is a business share must be examined within the meaning of § 117a ods. 3 of the ComC. Although this provision states that these are conditions relating to the creation of the right of lien, they are primarily conditions necessary to assess the validity of the contract to create the right of lien. These conditions are subsequently examined by the registration court.[1] The basic condition that must be met is that the memorandum of association permits the transfer of the business share. Indeed, if the transfer of the business share were excluded under the memorandum of association, the creation of a right of lien would not come into consideration either. If, however, the memorandum of association permits the transfer of the business share but, for example, conditions it on the consent of the general meeting, then in that case the creation of the right of lien will also have to be approved by that body. The same applies to the fulfilment of other conditions that the company's founding document might require for the transfer of the business share. The first condition for the creation of a right of lien over a business share is therefore the consent of the general meeting, if the memorandum of association requires it, or the fulfilment of the other conditions stated therein. Meeting these conditions gives the creditor the ability to realise their right of lien more easily in the future. The consent of the general meeting is then no longer required for the transfer of the pledged business share upon the exercise of the right of lien. The next step will be the conclusion of a written contract to create a right of lien over the business share with officially certified signatures, and finally the right of lien must be entered in the Commercial Register. The right of lien arises only upon entry in the Commercial Register, which is one of the special registers. Under the act, both the lien creditor and the pledgor are entitled to file the proposal for the registration or deletion of a right of lien created by contract. The proposal for registration must be accompanied by all documents attesting to the fulfilment of the conditions for the creation of the right of lien, i.e. the lien contract, the company's memorandum of association not excluding the transfer of the business share, a document attesting to the consent of the company's body to the creation of the right of lien, if it is required under the memorandum of association, or to the fulfilment of other conditions required by the memorandum of association. The act provides that, during the existence of the right of lien over the business share, the rights associated with participation in the company are exercised by the member. The member thus cannot be restricted in the existing exercise of their rights arising from their business share. Not even in the disposal of it – they may, for example, sell it – but in any case they must respect § 151i of the Civil Code, under which the pledgor may use the pledge in the usual manner but is obliged to refrain from anything that would diminish its value.

The right of lien in employment relationships

Act No. 311/2001 Coll., the Labour Code (hereinafter the "Labour Code"), establishes the subsidiary application of the Civil Code to its first, general part. The essential provision as regards the right of lien is § 20, which lists it as one of the possible instruments for securing obligations that have arisen from employment relationships. A right of lien created in this way has its specific features. A fundamental difference between the constitution of a right of lien under the Labour Code on the one hand and under the Civil Code on the other is also the pledge itself, which under the Labour Code can be exclusively immovable property already owned by the employee, whereas under the Civil Code it can also be other, movable things and rights, i.e. values that may otherwise be the subject of civil-law relationships. The legal title for creating a right of lien over immovable property owned by the employee is only the lien contract. Under the Labour Code, only a relatively narrow range of the employer's claims can be secured by a right of lien. Under § 20 ods. 4 of the Labour Code, the employer may, by a written contract to create a right of lien over immovable property owned by the employee, secure with the employee only the claim for compensation for damage to entrusted values that the employee is obliged to account for, and the claim for compensation for damage that the employee caused the employer intentionally. Such a narrowly conceived possibility of security does not give the creditor (the employer) broad room for manoeuvre. A valid contract to create a right of lien may be concluded not only during the term of the employment relationship, but also after its termination. Since the Labour Code regulates the area of the right of lien in employment relationships only marginally, with a single provision, it is necessary to apply the provisions of the Civil Code. This concerns not only the substantive requirements of the lien contract, but above all the manner of exercising the right of lien.

The right of lien under Act No. 566/2001 Coll., the Securities Act

In its provisions, the Securities Act distinguishes between a statutory and a contractual right of lien. A statutory right of lien over securities is governed by the provisions of a special act, such as the act on the administration of taxes and fees. In registering it, however, the state authority must follow the provisions of this act. A contractual right of lien (§ 45) also arises upon registration, namely in the special record of pledged securities, which is usually maintained by the central depository. In its provisions, the act deals mainly with those circumstances connected with the nature of securities and distinguishing them from other subjects of lien relationships, while creating new rights and obligations for the pledgor as well as the creditor. In other respects, a contract to pledge securities is governed by the provisions of the Commercial Code and the Civil Code on the right of lien. „Since the general legal regime of the right of lien in the ComC has in the meantime been repealed, only the subsidiary application of the CC comes into consideration.“[2] The only substantive requirement designated by the act is the written form of the contract.

Other forms of the right of lien

When we speak of a right of lien governed primarily or subsidiarily by the provisions of the CC, we must not forget that the Slovak legal order also recognises certain other forms of the right of lien which, however, have essentially nothing in common with the right of lien created under the CC, apart from its purpose and nature. These are, in particular:

a) the tax right of lien created under Act No. 563/2009 Coll. on the administration of taxes (the Tax Code), which the tax administrator creates to secure a tax arrear as well as to secure a certain tax claim that will arise in the future, where there is a justified concern that a tax that is not yet due or has not yet been assessed will not be paid,

b) the enforcement right of lien created over immovable property under Act No. 233/1995 Coll., the Enforcement Code, over immovable property for the purposes of enforcement proceedings.

Such forms of the right of lien are characterised by their full regulation in the specific act as regards the creation, arising, rights and obligations, subject, and also the exercise of the right of lien itself. The only point where this regime intersects with the regime in the CC is their registration, which affects the priority position of the lien creditor when exercising the right of lien. Until the last amendment to the CC took effect, which established the current form of the right of lien, the legislator gave preference, in the exercise of the right of lien, to the position of the state, by giving certain forms of the right of lien a priority position. Today's regime, however, does not recognise such a priority position. The priority position belongs to the creditor, regardless of their nature, who has their right of lien registered earlier (or which arose earlier). This principle is also confirmed by the judgment of the Supreme Court, file no.: 1Sžo 26/2008: „If a contractual right of lien was created earlier for the enforced claim, the ranking of the enforcement right of lien follows the ranking of that contractual right of lien. It was the legislator's will to establish an equal legal position for those entitled under a right of lien, regardless of whether it is a contractual right of lien or a tax or enforcement right of lien.“

[1] VOJČÍK, P. et al. 2009. Občiansky zákonník : stručný komentár. 2nd edition. Bratislava : Iura edition, 2009. 1234 pp. ISBN 978-80-8078-249-8

[2] LAZAR, J. et al. 2006. Občianske právo hmotné 1. 3rd edition. Trnava : Iura edition, 2006. 607 pp. Textbook series. ISBN 80-8078-084-6