Bundesverfassungsgericht

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Application in Organstreit proceedings on railway-owned real estate held inadmissible Parliament has no right of approval with regard to the sale of Deutsche Bahn AG assets

Press Release No. 85/2011 of 28 December 2011

Order of 22 November 2011
2 BvE 3/08

At the beginning of 1994, the Deutsche Bundesbahn (German Federal Railway) and the Deutsche Reichsbahn, the railway of the former GDR, were merged in the course of the railway reform to form a special fund of the Federation without a legal personality (the Federal Railways Fund - Bundeseisenbahnvermögen), and Deutsche Bahn AG, a corporation under private law, was founded. When the real property was divided between the Federal Railways Fund and Deutsche Bahn AG, not only what is known as real property necessary for railway operation (bahnnotwendige Liegenschaften) but also some real property not necessary for railway operation was transferred to Deutsche Bahn AG. In order to part with the real property that was not, or no longer, regarded as necessary for railway operation, Deutsche Bahn AG founded subsidiaries to which it sold the real estate in question, which mainly included administration buildings that were no longer needed. In 2007, Deutsche Bahn AG intended to sell the subsidiaries to a consortium in their entirety. The sales contract on this, which was officially recorded by a notary in September 2007, was entered into under the condition precedent of approval by the Federal Government. The sale of the subsidiaries was deliberated afterwards in the German Bundestag's Transport Committee, last on 10 October 2007, before the Federal Government declared its consent in November 2007.

On 23 May 2008, the DIE LINKE parliamentary group in the German Bundestag made an application in Organstreit proceedings [proceedings relating to a dispute between supreme federal bodies] seeking, in a general sense, a declaration that the Federal Government had violated the rights of the German Bundestag under Article 110 of the Basic Law (Grundgesetz - GG) by not obtaining parliamentary approval of its consent to the sales transaction.

The Second Senate of the Federal Constitutional Court dismissed the application because it is inadmissible in several respects. For one thing, the German Bundestag's participatory right alleged by the applicant does not come into consideration under any conceivable constitutional-law aspect. Furthermore, the application in the Organstreit proceedings was not made in due time. Apart from this, it lacks the required need for legal protection.

In essence, the decision is based on the following considerations:

1. A parliamentary right of approval neither arises from Article 110 GG nor under the aspect of a "flight from the budget" alleged by the applicant or on the basis of an unwritten requirement of parliamentary approval (Parlamentsvorbehalt).

Article 110.2 GG provides that the budget shall adopted by the Budget Act. According to Article 110.1 GG, all revenues and expenditures of the Federation, i.e. of the Federation as a territorial authority, shall be included in the budget. However, the provision does not cover revenues and expenditures of federal legal persons under public law or of corporations under private law which are owned by the Federation or in which the Federation holds participations. The sale of the Aurelis companies is hence not covered by the provision, for the owner of the companies sold was Deutsche Bahn AG, not the Federation, which did not receive any funds from the sale.

Furthermore, Article 110.2 sentence 1 GG prescribes that the budget shall be adopted by a law, but it does not assign the Bundestag any right of approval of budgetary measures taken by the executive power. Should, due to any subsequent deviations from the budget, the participation of the Bundestag be required under the provisions of the Basic Law which concern the federal budget, the participation will take the shape of a Supplementary Budget Act.

The Federal Government was also not obliged to obtain parliamentary approval under the perspective of a "flight from the budget". Under constitutional law, the budgetary autonomy of Deutsche Bahn AG is legitimised by the insertion of Article 87e.3 sentence 1 GG. According to this provision, federal railways shall be operated as enterprises under private law. The intention of this provision was to secure the commercial orientation of the railways and to assign an area of entrepreneurial self-determination to them. It would be incompatible with this objective to impose parliamentary supervision on the individual business decisions of the enterprise.

From Article 87e.4 GG, no precepts under constitutional law that establish a right of approval on the part of the Bundestag concerning the sale of assets of Deutsche Bahn AG can be inferred either. According to this provision, the Federation shall ensure that in developing and maintaining the federal railway system as well as in offering services over this system, due account is taken of the interests and especially the transportation needs of the public. To the extent that according to this provision, details shall be regulated by a federal law, the German Bundestag is to render its share in performing the duty arising from the provision by way of its legislative activity. If over and above that, the Bundestag were granted participatory rights in individual entrepreneurial decisions of Deutsche Bahn AG, this would considerably impair the latter's ability to act according to a market-economy rationale, as is intended under constitutional law. Furthermore, the provision under Article 87e.4 GG is factually restricted to the area of railway infrastructure and railway traffic services. In contrast, the sale of the subsidiaries exclusively concerns real property not necessary for railway operation.

2. Apart from that, the application of 23 May 2007 was filed after the expiration of the time-limit applying in Organstreit proceedings according to § 64.3 of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz - BVerfGG) because it was not made within six months of the contested measure becoming known. The fact that the sales contract had been entered into, as well as the circumstance that the Federal Government did not want to make its authorisation of the contract contingent on a parliamentary declaration of approval, was known to members of the Transport Committee in the last committee meeting on 10 October 2007 at the latest. The knowledge of a committee is attributable to the German Bundestag and thus to the parliamentary groups as well, so that the time-limit for filing an application ended at the end of 10 April 2008.

3. Finally, the application is inadmissible because it lacks the required need for legal protection. Contrary to its duty, the applicant has omitted to invoke the participatory right allegedly due to the German Bundestag before instituting the Organstreit proceedings.