Corporate & Commercial

The payment deadline between economic operators is set out in the contract, but it may not be longer than 60 days, or may be longer only exceptionally, if the length of the deadline is agreed in writing and such deadline does not constitute an unfair agreement.

Notwithstanding the foregoing, the new intervention act provides that payment deadlines are 60 days when the creditor is a public authority (which includes majority state-owned legal entities). The 60-day payment deadline remains in effect for one year after the epidemic is declared to be over.

In contracts for the supply of goods or provision of services or execution of works concluded between private-law entities and public-law entities that are users of the state public budget (state, municipalities, public agencies, funds, etc.) provisions on contractual penalties for delays do not apply during the duration of the epidemic and all contractually agreed deadlines are extended for the duration of the epidemic.

This does not apply where the procurement relates to the supply of goods constituting the protective equipment necessary to fight the epidemic.

If the contracting authority is a constituent part of a municipality (local, village or district community), the public procurement contract may be concluded independently, since the new intervention act stipulates that the provision regulating public procurement procedures for the needs of the constituent parts of the municipality does not apply until April 15, 2021. Also, the constituent part of the municipality is considered as an independent contracting authority for the purpose of calculating the estimated value of public contracts until April 15, 2021.

In the present case, the provisions of the Public Procurement Act do not apply, since the intervention act has intervened on the field of public procurements of goods and services and stipulated that until November 15, 2020, the Public Procurement Act in the general field would apply only to public procurement contracts, the assessed value of which excluding VAT is equal to or higher than 40.000 EUR for the public supply or service contract or project contest and 80.000 EUR for the public works contract (the general rule in Article 21 of the Public Procurement Law sets these thresholds at 20.000 EUR and 40.000 EUR respectively).

In tax enforcement procedures that are governed by the Tax Procedure Act (ZDavP-2), the enforcement of enforcement orders is postponed from the day the extraordinary measures act enters into force. The tax authority will execute the order after the end of the validity of the intervention measures act, i.e. on 31 May 2020 or on 30 June, 2020, in case of extension.

In enforcement proceedings under the Claim Enforcement and Security Act, the enforcement of such orders is postponed from the day the extraordinary measures act enters into force. The enforcement will thus be halted by the bank and will continue after the end of the validity of the intervention measures act, i.e. on 31 May 2020 or on 30 June, 2020, in case of extension.

All income paid under the new intervention act (basic income, wage compensation for temporary waiting for work, etc.) is exempt from enforcement under the Claim Enforcement and Security Act and also from tax enforcement.

All income paid on the basis of the intervention act are exempt from the bankruptcy estate in the procedure of personal bankruptcy.

The court may postpone ruling on the creditor’s proposal for the start of the bankruptcy procedure for 4 months.

The measure is used in bankruptcy proceedings proposed by the creditor, which are filed by the creditor no later than two months after the termination of the measures, i.e. until 31 July 2020 or until 31 August, 2020, in case of extension.

The insolvency of a company is deemed to be the result of the declaration of an epidemic if the company carries out an activity for which it has been declared with a governmental, ministerial or municipal regulation or act that the carrying out of the activity (services or sale of goods) is temporarily prohibited or substantially restricted due to the epidemic.

If the company bodies are due to the objective consequences of the declaration of an epidemic unable to publish a call for subscription and payment for shares in a timely manner, they must do so at the latest within one month after the termination of the measures, i.e. until 31 May 2020 or until 30 June, 2020, in case of extension.

If the company bodies are due to the objective consequences of the declaration of an epidemic unable to convene a general meeting in a timely manner, they must convene it at the latest within one month after the termination of the measures, i.e. until 30 June 2020 or until 31 July, 2020, in case of extension.

The new Intervention Measures Act sets for the that a legal person, sole proprietor or private person has become permanently illiquid also in the case that the payment of wages and social contributions to employees has been delayed by more than one month since the reimbursements of wages and social contributions under the intervention acts have been received.

The presumption of insolvency is applicable for four months after the termination of the measures, i.e. until 30 September, 2020 or until 31 October, 2020, in case of extension.

If the insolvency occurred as a result of the declaration of an epidemic, you are not obliged to file a proposal to start a compulsory settlement or a proposal to start the bankruptcy procedure of the company. The aforementioned is applicable for three months after the cessation of measures under the intervention act. 

The insolvency of a company is deemed to be the result of the declaration of an epidemic if the company carries out an activity for which it has been declared with a governmental, ministerial or municipal regulation or act that the carrying out of the activity (services or sale of goods) is temporarily prohibited or substantially restricted due to the epidemic.

If you have exercised the right to reimbursement of wage compensation for employees on temporary waiting for work, the right to reimbursement of wage compensation for employees, who cannot perform work due to force majeure, an exemption from payment of social contributions or extraordinary assistance in the form of monthly basic income, it is necessary to return these received funds, together with statutory late interest, in case that you have in the year 2020 since the day of entry into force of the intervention measures act, distributed profits, paid out parts of salaries for business performance or paid out rewards to the management.

Any legal or natural person pursuing an activity (including sole proprietors and private persons engaged in performing business activities) and classified as a micro, small, medium or large company with its registered office in the Republic of Slovenia is considered as a eligible borrower.

The guarantee of the Republic of Slovenia can be obtained for credit agreements concluded after March 12, 2020 and no later than December 31, 2020 with a loan maturity not exceeding five years and intended solely to finance the borrower’s primary business activity, either financing new ones or completing already performed investments (investments), financing of working capital or financing the repayment of obligations arising from credit agreements concluded in the period from March 12, 2020 until the law enters into force if they meet the conditions under the ZDLGPE law. The loan should not be intended for financing affiliated companies or companies domiciled abroad.

No. A guarantee obtained allows you to obtain credit on more favorable terms or to obtain a loan that you would not otherwise be able to obtain.

The law sets certain limits, namely that the maximum allowed total amount of the principal amount of a loan of an individual borrower responsible for the fulfilment of which the Republic of Slovenia is responsible can be up to 10% of sales revenue in 2019 and may not exceed the amount of labor costs for 2019.

In the event that the borrower is granted a deferred payment of obligations for newly concluded credit agreements in accordance with the law governing the emergency measure of deferred payment of borrowers (ZIUOPOK), the amount of his deferred payments shall be included in the maximum allowed total amount of obligations of an individual borrower.

The Republic of Slovenia accepts the guarantee only if the borrower was not considered as a firm in difficulty on 31 December 2019 and that after 31 December 2019 the borrower is faced with liquidity problems for business reasons related to the consequences of COVID-19 in the Republic of Slovenia. Likewise, a borrower must not be considered a defaulter on March 12, 2020, and a borrower must not have significant delays in settling its obligations to the bank as of March 12, 2020. 

The lender must also not do business or be registered in a European Union country with jurisdictions that are not willing to participate for tax purposes (eg Cayman Islands, Fiji, Panama) and must not have an owner from such country and as of the date of submission of the settlement of the overdue payments arising from compulsory contributions, taxes and other charges and included in the system of compulsory multilateral offsetting.

In the above case, despite the negative capital, an entity may apply for a guarantee for its credit obligation if it also fulfils the other legal requirements.

In applying for credit, the borrower must provide the bank with the most recent financial statements and a description of its business position due to the consequences of COVID-19, together with an indication of the total proceeds of the borrower’s sales in 2019 and the amount of labor costs for 2019. The Borrower must determine the amount, maturity and purpose of the credit required. The lender must also provide a statement that the loan will be used to fund the core business. 

In the event that the borrower also has a loan that is subject to a deferral under the law governing the emergency measure of deferring the payment of the borrower’s obligations, the borrower must also provide information on the amount of the borrower’s obligations under this loan.

No. The amount of the guarantee for an individual loan is 70% of the loan principal given to a company classified as large, or 80% of the loan principal given to a company classified as micro, small or medium-sized enterprises. 

In the case of the gradual repayment of the borrower’s obligations, for which the Republic of Slovenia has assumed a guarantee obligation, the liability of the RS as a guarantor shall also be reduced proportionally.

No. An annual premium is calculated on the basis of the guarantee obtained. 1 basis point equals 0.0001 the amount of the principal outstanding at the relevant time.

If the borrower is classified as micro, small and medium-sized enterprises, the annual premium for the first year is 25 basis points; 50 basis points for the second and third years and 100 basis points for the fourth and fifth years.

If the borrower qualifies as a large company, the annual premium for the first year is 50 basis points; 100 basis points for the second and third year; 200 basis points for the fourth and fifth years.

For a borrower who has been granted a loan by a bank that receives measures under the ZDLPE law, the following prohibitions apply from the time the loan application is submitted to the expiration of the bank’s right to exercise the right to a guarantee:

– prohibition of payment of profits,

– prohibition of payment of business performance awards to members of management,

– the prohibition on the purchase of own shares or shares, and

– prohibition of payment of other financial liabilities to parent or affiliated companies or owners.

In principle the answer to your question is yes, unless the lease agreement explicitly regulates such a situation differently.

If the lease agreement regulates a situation in which due to force majeure, state measures, epidemics, etc. the tenant is unable to use the space, the terms of the lease agreement are primarily applicable. Otherwise, the applicable legislation governing lease relationships, as well as case law, must be considered. The Business Buildings and Business Premises Act (ZPSPP) and the Obligations Code (OZ) do not explicitly stipulate the legal consequences for cases where the lessee cannot carry out business activities in the leased premises without his fault (as well as without the fault of the lessor). Thus, in our opinion, the legislation does not provide a direct basis for non-payment of rent. Generally, none of the statutory provisions that would justify a lessee’s claim for a reduction in rent would be applicable in our opinion as well. OZ namely foresees a reduction in rent only for the following cases, i.e. if the object of the lease is partially destroyed or damaged, if the lessee’s right to lease the property is restricted due to a right of a third party, if the object of the lease is defective at delivery or if a defect occurs during the lease term, etc.

Notwithstanding the above, it is of course necessary to take into account all circumstances of each individual case, as situations may vary significantly and legal assessment of the case could, due to materially different facts of the case, also be different. There is also the possibility that the legislature will soon regulate the legal implications for such cases, similarly to some other EU Member States.

In principle the answer to this question is yes, however for a definite answer the provisions of the lease agreement and all of the circumstances of the particular case need to be considered.

The lease agreement usually stipulates in which cases the lease relationship may be terminated at the will of the lessee. The Business Buildings and Business Premises Act (ZPSPP) must also be taken into consideration, as it contains a number of obligatory provisions regarding the leasing of business premises and termination of the lease relationship between the parties. In view of the obligatory provisions of the ZPSPP, it is also important whether the lessee has concluded a lease agreement for a fixed or for an indefinite period, since the ZPSPP regulates the respective types of contracts differently.

As ZPSPP stipulates that a lease agreement which is concluded for an indefinite period must be judicially terminated with a one-year notice period and that a lease agreement which is concluded for a fixed term generally cannot be terminated before the expiration of the term for which it is concluded, it is from the lessee’s point of view due to the consequences of the declared epidemic all the more important that the Obligations Code (OZ) regulates the legal construct of changed circumstances.

This legal construct allows that in case if after the conclusion of a contract circumstances arise that render the performance of obligations by one party more difficult or owing to which the purpose of the contract cannot be achieved and in both cases to such an extent that the contract clearly no longer complies with the expectations of the contracting parties and in the general opinion it would be unjust to retain it in force as it is, the party whose obligations have been rendered more difficult to perform or the party that owing to the changed circumstances cannot realise the purpose of the contract may request the rescission of the contract.

However, the lessee can only invoke the legal construct of changed circumstances if he at the conclusion of the lease agreement could not have foreseen or taken into account the occurrence of the current circumstances or could not have avoided them or could not have prevented the consequences thereof.

The key question that the court will have to answer in such disputes is therefore whether the occurrence of an epidemic and the inability to conduct business activity are risks that the lessee would have to take foresee and take into account when concluding the lease agreement. It is equally as important whether the lessee during the epidemic did everything to avoid or mitigate as much as possible its negative consequences.

The COVID-19 epidemic will undoubtedly raise questions for a lot of companies whether the provisions of the Slovenian Obligations Code regulating change of circumstances and (Article 112), force majeure (Article 116) and uncertainty of performance (Article 102) could be relied on in cases where the fulfilment of contractual obligations will become difficult, uncertain, delayed or altogether impossible or prevented due to the COVID-19 epidemic and the strict measures adopted in its response.

Although the Obligations Code represents the general law applicable to all contracts it needs to be considered that the Obligations Code in line with the principle of contractual freedom gives a lot of options to the contracting parties to regulate their contractual relationship as they wish. This means that although the COVID-19 epidemic might represent a circumstance which could justify rescission of a contract or its amendment, deferment of performance, an objection of threatened performance or expiry of obligations, the exact terms of each particular contract need to be examined thoroughly before any conclusion on the fulfilment of conditions for these possibilities on the basis of general principles of the law of obligations can be made.

In the area of loans, the newly passed Intervention Measure of Deferral of Borrower’s Obligations Act orders banks to grant deferrals of payments (repayments of principal, interest, default interest, costs, etc.) from credit agreements for 12 months to all borrowers who apply for a deferral and fulfil certain conditions. This Act is applicable for all banks with registered seat or with branch office in Slovenia as well as for all foreign banks which perform bank services in the territory of Slovenia directly. 

An application for deferral of loan payments will have to be submitted to the bank no later than six months after the epidemic will be cancelled, and the act itself will be valid for 18 months since the end of the epidemic.