SK+MED complaints at the Constitutional Court

Bratislava, 1 February 2018The suppliers of medical devices and special medical materials represented by the Slovak Association of Medical Devices Suppliers (SK+MED) filed a complaint with the Constitutional Court of the Slovak Republic in Košice. In the complaint, the Association claims violation of fundamental rights and freedoms guaranteed by the Constitution of the Slovak Republic, including violation of the Charter of Fundamental Rights of the European Union.

The debt discharge concept proposed by the Slovak Ministry of Health constitutes direct discrimination of creditors, violates the fundamental right to own property, infringes on the right to conduct business and also violates the Charter of Fundamental Rights of the European Union whereby Slovakia, through the Government of the Slovak Republic, National Council of the Slovak Republic and the Slovak Ministry of Health, grossly violates the Late Payment Directive of the EU.

It is not possible for the state to require creditors, after they have previously gone through the referencing of prices, electronic tendering, delivery of the goods and waiting for years to receive payments, to provide any additional rebates on their money. It is immoral and clearly in conflict with both the European and Slovak law.

The European Commission has already take notice of the problem. It would be a surprise to see the Commission satisfied with such a pretended fight against late payments, which has been pursued by the Slovak Government and the Slovak Ministry of Health for years at the expense of creditors through continued discharging of debts, the true essence of which has been to solve the issue of late payments solely at the expense of suppliers.

The arguments of SK+MED members are supported, among others, by the case-law of the EU Court of Justice concerning the interpretation of the Late Payment Directive, according to which it is admissible to waive late interest and debt recovery costs in exchange of immediate repayment of overdue receivables, while it is not possible to require waiver of any further amounts. The SK+MED members have not been receiving payments for years and now they are even forced to waive a portion of the principal, up to 20%, in exchange of receiving partial repayment of their money. As of 31 December 2017, the receivables held by SK+MED members amounted to EUR 178 million, of which the state-run hospitals owed almost EUR 170 million.

SK+MED has also filed the complaint against the Ministry of Health of the Slovak Republic with the Regional Court in Bratislava for the unlawfulness of the Ministry’s actions. At the same time, the Association has proposed to ask the EU Court of Justice to answer the question whether or not the Debt Discharge Concept, which among others requires a rebate on the principal as a prerequisite for including a creditor in the debt discharge process, is in violation of the Late Payment Directive. Under the Late Payment Directive, a creditor may waive the recovery of late interest and the debt recovery costs in exchange of immediate payment of the principal on due receivables. The answer by the EU Court of Justice shall be binding on the courts of the Slovak Republic, as well as on the Ministry of Health of the Slovak Republic.