Category: Slovenia

Former Schoenherr Ljubljana Co-Managing Partner Eva Skufca has established the eponymous Law Firm Skufca in Slovenia.

The new boutique firm focuses on competition, state aid, FDI regulations, and IP.

Skufca left Schoenherr in October 2022, after spending ten years with the firm. She first joined the previous team in 2012 as a Senior Associate and made Partner in 2015. She had served as the Co-Managing Partner in Ljubljana since 2017. Before Schoenherr, she worked for Miro Senica and Attorneys between 2007 and 2011.

“After having spent more than 15 years in the legal profession and ten years with Schoenherr, where I was delighted to co-manage the Ljubljana office, I decided it’s time for a new challenge,” Skufca commented.

On 15 December 2022, the Slovenian Parliament finally adopted the Data Protection Act (Zakon o varstvu osebnih podatkov, ZVOP-2, “ZVOP-2”), a national law implementing the EU General Data Protection Regulation (“GDPR”). The act had been several years in the making, with the earliest draft released for public consultation back in 2017.

Since the GDPR became directly applicable in 2018, the scope of applicability of the legacy Data Protection Act from 2004 (“ZVOP-1”) was reduced to a handful of topics, including CCTV and processing of biometric data. The failure to update the national data protection legislation following the enactment of the GDPR generated a fair share of practical issues. Notably, these included uncertainty about the possibility to impose fines for breaches of the GDPR. Initially, the prevailing view had been that these breaches cannot be sanctioned at all, whether by means of administrative penalties under the GDPR or by fines set out in ZVOP-1, before an implementing law has been enacted. This changed in 2021 when leading courts took the view that a breach of GDPR provisions may carry fines set out in ZVOP-1 after all (incidentally, these fines are considerably lower than those in the GDPR).

Key takeaways

Some of the most notable changes brought about by ZVOP-2 include:

• Data processing log (Art 22): separate from the data protection impact analysis (DPIA) governed by the GDPR, controllers will be required to keep a data processing log (dnevnik obdelave) for certain categories of data processing, including collection, change and disclosure. This obligation applies (i) where automized systems for large-scale data of special categories of personal data are used, (ii) where there is systematic and regular monitoring of individuals, (iii) where a DPIA has shown a risk that can be efficiently managed by keeping a processing log, or (iv) when otherwise so required by law (e.g. for CCTV). As a rule, processing logs must be kept for two years after the expiry of the calendar year when the corresponding processing was recorded. This can in some instances be extended to five years.
• Additional security requirements for “special processing” (posebne obdelave) (Art 23): ZVOP-2 introduces a new category of data processing, categorised as “special processing”, which covers specific large-scale data processing within information systems. This includes systems processing personal data of more than 100,000 individuals on the basis of a statute or processing special categories of personal data of more than 10,000 individuals, as well as instances where processing is based on a specific set of laws (such as financial administration, health care or mandatory health insurance). On top of GDPR requirements, special processing is subject to heightened security and incident reporting requirements laid out in the legislation governing information security. In some cases, the filing systems of such data must not be stored outside Slovenia.
• Sanctions (Art 95-115): ZVOP-2 provides grounds to impose administrative fines (upravne globe) set out in Art 83 GDPR. Slovenia has localised these as minor offences (prekrški) punishable by (standard/non-administrative) fines (globe). Idiosyncratic to the Slovenian legal system (which treats liability of an entity as accessory to that of its responsible person), fines for responsible persons within the breaching entity have been legislated in addition to the fine that may be imposed on the breaching entity under the GDPR. The former fines are considerably lower than the latter (the maximum penalty that may be imposed on a responsible person is EUR 8,000). ZVOP-2 also introduces additional mitigating factors that must be given due regard when deciding on the amount of the fine (e.g. a fine should not be disproportionate as compared to those levied for violations of other similar human rights).
• Accreditation and certification bodies (Art 52-53): ZVOP-2 provides grounds for the accreditation of competent certification bodies (accredited by Slovenian accreditation – Slovenska akreditacija), which may issue approvals of GDPR-compliant business processes (pursuant to Art 42-43 GDPR).
• The age of consent for minors for use of information society services has been set at 15 years (a parent or trustee’s approval is required for children below that age), unless a service provider’s terms of use set out a higher age limit (Art 8).
• Processing of publicly available contact data or data obtained at public events (Art 93): ZVOP-2 allows for the processing of publicly available contact data or contact data obtained upon previous individuals’ consent or voluntary disclosure, for the purposes of organising official meetings, education, training and events or other similar activities, except for direct marketing purposes. Personal data (including name, photographs and video materials) obtained at events carried out within the scope of the entity’s operations can be processed and published for public information purposes, except if the individual prohibited such processing (opt-out system).
• Processing of individuals’ requests (Art 14): ZVOP-2 specifically requires the controller’s response to an individual’s request made pursuant to Art 15-22 GDPR (or other requests related to data protection) to be substantiated and to provide information on the individual’s right to lodge a complaint with the supervisory authority. Such a complaint may be lodged within a deadline of 15 days after being informed of the controller’s response.
• CCTV (Art 76-80): this subject had already been regulated under ZVOP-1 but has been slightly expanded in ZVOP-2. Information about CCTV must be made available to individuals at a distance that still enables them to not enter an area being monitored by CCTV if they so prefer. CCTV in public spaces has been made subject to more detailed regulation. ZVOP-2 also introduces a prohibition of automatic licence plate recognition in public spaces (e.g. public parking lots). On the other hand, the retention period for personal data originated through CCTV has been reduced from two years to one year, with the controller of the CCTV now being required to keep a data processing log.
• Use of biometric data (Art 81-84): ZVOP-2 expands the possibility of biometric data processing in the private sector. Under ZVOP-2, the use of biometric data in the private sector is subject to certain requirements, including certification of the controller, prior written notice to the individuals and, as a general rule, prior approval from the supervisory authority. The prior approval requirement does not apply if the processing of biometric data remains under the sole and exclusive control of the relevant individual. Biometric data cannot be solicited or processed for marketing purposes, even if marketing services are delivered free of charge.

Undeniably, the adoption of a GDPR implementing act has been long overdue. ZVOP-2 will enter into force on 26 January 2023. The applicability of certain provisions has been postponed or made subject to a transition period. This includes provisions governing the keeping of processing logs and requirements regarding special processing activities where compliance must be ensured within an additional period of two and three years, respectively.

By Marko Frantar, Local Partner, and Miriam Gajsek, Associate,  Schoenherr

Fatur Menard has advised the Svetlik family on the sale of their 42% stake in Hidria owner H&R to Spanish corporation Gonvarri. Cuatrecasas and Schoenherr reportedly advised Gonvarri.

H&R is the parent company of Hidria, a Slovenian car part manufacturer. Hidria primarily produces industrial fans, glow plugs, mechatronics, and aluminum parts for steering systems.

Gonvarri operates in steel and aluminum processing. The company is present in 26 countries in Europe, North and South America, and Asia, employing more than 6,000 people.

According to Fatur Menard, the exit share purchase agreement was for “a 42% stake in H&R. The share purchase agreement was signed on July 19, 2022, and closing took place on January 9, 2023, after obtaining approval from the European Commission and the Slovenian FDI Authority.”

Fatur Menard’s team included Partner Andrej Fatur and Senior Associates Lea Vatovec Miklavcic, Martin Carni, and Rok Reja.

Editor’s Note: After this article was published, Schoenherr confirmed it had advised Gonvarri on the acquisition of a stake representing 42% of the voting rights in the company. The firm’s team included Partner Bojan Brezan, Attorney at Law Jan Primozic, and Senior Associate Maks David Osojnik.

Former Senior Associate Primoz Mikolic has been promoted to Partner at ODI Law and Partners Branko Ilic and Matjaz Jan have become Senior Partners at the firm.

Specializing in corporate and M&A, banking and finance, and insolvency and restructuring, Mikolic first joined ODI in 2015 as an Associate. He was promoted to Senior Associate in 2018 and, since 2019, he has been heading the firm’s M&A practice group. Before joining the firm, he was an Associate with Wolf Theiss from 2014 to 2015.

Ilic, who specializes in banking and finance, dispute resolution, TMT, energy, real estate, and restructuring and insolvency, has been with ODI Slovenia since 2010, having first joined as a Senior Associate and Head of Civil Law and Real Estate operations. He was promoted to Partner in 2014 and, since 2015, he is Regional Head of the Real Estate group. Since 2016, Ilic is also Head of ODI’s Italian Desk. Previously, Ilic practiced law independently from 2009 to 2010 and spent five years with Law Office Cad, having first joined as a Junior Associate in 2004, and being promoted to an Associate in 2007 and a Senior Associate in 2008.

Jan has expertise in corporate and M&A, dispute resolution, labor law, and restructuring and insolvency. He joined ODI Law in 2010 as a Senior Associate and Head of Corporate operations. In 2014, he was promoted to Partner, while in 2015 he became a Regional Head of the Dispute Resolution group. Before joining the firm, he spent over five years with Law Firm Ceferin, where he first joined as an Associate in 2005, and later worked as a Senior Associate from 2006 to 2010. From 2003 to 2004, Jan was a Legal Counsel at Slovenia’s Ministry of Justice.

“The above promotions confirm ODI’s commitment to supporting and rewarding the valued contribution of its team members, reflected through the firm’s undisputed market excellence,” ODI Law announced.

Aleksandra Jemc Merc, Jure Levovnik, and Ozbej Merc have been promoted to Senior Partners with Jadek & Pensa, while former Managing Associate Nastja Merlak has been promoted to Partner. Levovnik was also appointed to the firm’s Managing Partner team, joining Jemc Merc and Sreco Jadek. Levovnik takes over from former Managing Partner Pavle Pensa who will stay on as Founding Partner.

According to the firm, Jemc Merc’s role as Head of the Advisory unit has been taken over by Partner Janja Zaplotnik, while Levovnik’s position as Head of the Dispute Resolution unit falls to Partner Mitja Podpecan.

Jemc Merc’s main areas of practice include corporate law, commercial contracts, intellectual property law, and regulations in the field of the pharmaceutical industry. She has been with the firm since 2003.

Levovnik, according to the firm, has “vast experience in representing domestic and foreign clients in complex commercial disputes and arbitrations.” He has been with the firm since 2004.

Merc, the Head of the firm’s Transaction unit, specializes in mergers and acquisitions, insolvency and restructuring, and financial law. He’s been with Jadek & Pensa since 2003.

Zaplotnik, the new Head of the Advisory unit, specializes in “the field of competition law and state aid” as well as “commercial contracts and consumer law.” She has been a part of the firm since 2012.

Podpecan, the new Head of the Dispute Resolution unit, has “extensive experience particularly in court and administrative proceedings,” according to Jadek & Pensa. He has been with the firm since 2009.

Finally, Merlak specializes in “corporate law, insolvency law, and banking and finances.” She has been with the firm since 2012.

ODI Law has advised the state-owned Slovenian Bank Assets Management Company – now merged with the Slovenian Sovereign Holding – on the restructuring of Fori and its related companies. Ketler & Partners in cooperation with Karanovic & Partners reportedly advised Fori.

According to ODI, “with the new investor and the cooperation of its creditors, Fori was able to restructure its debt of approximately EUR 25 million, mainly by repaying the debt and partly by restructuring the remaining part of the debt.”

ODI’s team was led by Partner Suzana Boncina Jamsek.

Editor’s Note: After this article was published, Ketler & Partners, a member of Karanovic, confirmed it had advised Fori. The firm’s team included Partner Igor Angelovski and Senior Associate Nina Krajnc.

Developments in legislation, controversy on the measures dealing with the energy crisis, and interesting M&A transactions are the major talking points in Slovenia, according to Ulcar & Partnerji Managing Partner Matjaz Ulcar.

“Several systemic changes have been implemented by the legislator in the past few months,” Ulcar says. “The first is the Consumer Protection Act, which aims to align with recent developments at the EU level and started to apply in January 2023. The second is the recently adopted Prevention of Restriction of Competition Act, which, inter alia, implements simplified procedures only involving a routine check of mergers not giving rise to meaningful competition problems. The new Electronic Communications Act provides an updated regulatory framework for electronic communications services, aimed at providing the basis for the acceleration of digitalization in Slovenia,” and network improvement. He also highlights the act implementing the EU crowdfunding regulation, “governing the supervision of crowdfunding services.”

And a recent Constitutional Court decision on loan agreements in Swiss francs has far-reaching implications. “The court ruled that the disputed act applied to certain relations retroactively and as such presented a significant threat to the rule of law since there was no prevailing public interest to justify such retroactive validity.” According to Ulcar, “certain class actions, initiated by different groups of consumers, are pending, but it is unclear whether there are still legal grounds for such actions given the CC’s decision. It will be interesting to see what the court decides in these cases.”

According to Ulcar, the measures dealing with the energy crisis also stir controversy: “the government enacted a package of laws, aimed at addressing the energy crisis and mitigating issues that companies may have with energy procurement, particularly with electricity and gas. As part of these measures, the government implemented price controls for certain groups of distributors, including deliveries of natural gas and electricity. Under these price controls, suppliers are required to provide the energy sources at prices below the market rate.” According to him, it is currently unclear, however, whether these companies will be compensated by the state.

Ulcar notes that, while these measures may provide short-term solutions, more investment in energy generation from renewable sources will be needed in the future. “In addition, streamlining zoning and permitting procedures will be crucial to avoid delays in the development of new energy sources,” he says. “Price adjustments in various economic sectors, including energy companies, are also likely to be a hot topic in the coming months. There has already been an increase in litigation related to force majeure and price adjustments, and it is expected that there will be more negotiations and possibly an increase in disputes in the future.”

Finally, Ulcar highlights key transactions. “We had two big exits, valued at over EUR 200 million, that included sales of Slovenian companies. Pipistrel was sold to American conglomerate Textron and Joc Pececnik sold his business in the entertainment and gaming industry.” Also, the Slovenian Alfi Green Energy Fund just recently “completed the first project financing, related to the development of a 105-megawatt wind power plant in Serbia.” According to him, “the project is significant due to its nature, size, and high development potential. It is exciting to see that it is possible to fully privately finance non-subsidized projects in a different jurisdiction.”

On 26 January 2023, a new Consumer Protection Act (“the Act“) will enter into force, which combines the provisions of the currently applicable Consumer Protection Act and the Act on the Protection of Consumers against Unfair Commercial Practices.

The new Act also systematically transposes the content of the three EU Directives in the field of consumer protection law into the Slovenian legal order, introducing quite a few new legal institutions.

As consumer legal protection needs to adapt to evolving trends and new business practices, the Act introduces a number of innovations, and below we outline the key changes to look out for when dealing with consumers.

Labelling of prices and goods

The new Act introduces new rules on price and goods labelling in relation to price reductions and sales. As before, in the case of a price reduction, both the previous price and the reduced price will have to be marked, with the previous price being redefined as the lowest price applied by the undertaking in the 30 days preceding the application of the reduced price. Special marking rules apply in cases of goods which have been on the market for less than 30 days and in cases of continuous gradual price reductions.

Guarantee claims and the seller’s right of recourse

One of the most important changes with the current regulation is in the area of warranty claims, where the Act provides for a hierarchy between warranty claims (previously, the consumer had a free choice, whereas now a statutory priority is established). Thus, in the event of non-conformity of the goods, the consumer must notify the seller and request the restoration of the conformity of the goods free of charge (i.e. by repair or replacement), and only then can he/she either request a reduction of the purchase price in proportion to the non-conformity or withdraw from the contract and request a refund of the amount paid. Notwithstanding this, the consumer will be able to withdraw from the sales contract and claim a refund if the non-conformity occurs less than 30 days after delivery of the goods.

The law also includes new provisions on the seller’s right of recourse, which the seller can enforce against the upstream party in the contractual chain, in the event that the seller fulfills a consumer’s warranty claim due to non-compliance resulting from an act or omission of the upstream undertaking. 

Contract for the supply of digital content or services, goods with digital elements

As consumer protection needs to adapt to the digital age, the Act sets out the legal framework for contracts for the supply of digital content and services and for goods with digital elements. The Act distinguishes between digital content or services and goods with digital elements, and also introduces different legal regimes for them, with the contract for the supply of digital content or services being regulated separately, while goods with digital elements will be subject to the provisions on the sale of goods. The provisions governing the contract for the supply of digital content or digital service will also apply to a contract by which the consumer undertakes to provide personal data to the undertaking unless the undertaking processes the personal data provided by the consumer solely for the purpose of supplying the digital content or digital service in accordance with this Act or for the undertaking to comply with legal requirements to which it is subject and does not process the data for any other purpose.

Online marketplaces

For contracts concluded on online marketplaces, the Act lays down some additional specific obligations. Before the consumer is bound by any contract on an online marketplace, the online marketplace provider must provide the consumer, in a clear understandable, and personalised manner, with prior information on the main parameters determining the ranking of the offers and their relative importance, information on with whom the contract is concluded via the online marketplace (with a company or another person) and how this affects the consumer’s rights and obligations.

Globe

If companies fail to comply with the obligations imposed by the new Act, they may be fined up to 5% of the company’s annual turnover in the preceding business year in the Member State(s) concerned, or up to €2,000,000 if the information on the company’s annual turnover is not available. The person responsible may also be fined up to €8,000.

By Kevin Rihtar, Senior Associate, Ketler & Partners, member of Karanovic & Partners

Senica & Partners Managing Partner Katarina Kresal was appointed as a Member of Andersen Global’s Global Management Committee.

“The Global Management Committee holds an important role in integrating Andersen Global business and defining its future,” Senica & Partners informed. “The committee comprises ten members from the US, Canada, EU, UK, Middle East, and Africa, working on implementing the firm’s global strategy.”

Within Andersen Global, Kresal is also a Member of the EU Board and Co-Chair of the CEE Subregion. Specializing in corporate and M&A and alternative dispute resolution, she re-joined Senica & Partners in 2016 as a Partner. She became the firm’s Managing Partner in 2020. She had originally joined the firm in 2003, staying on for four years as an Attorney-at-Law, and managing the firm’s Commercial and International Law departments.

In between her two Senica stints, Kresal was the Minister of the Interior of the Government of the Republic of Slovenia, from 2008 to 2011, and practiced law independently, from 2012. Earlier, she was Director of the Legal Department at Western Wireless International, from 2001 to 2003, and worked as an Independent Advisor for Legal Affairs at Kapitalska Druzba, from 2000 to 2001.

Ketler & Partners, a member of Karanovic, has advised Axel Johnson International on its acquisition of Tinex.

Axel Johnson International is an industrial group of 170 companies in 30 countries. Tinex distributes bearings, mechanical power transmission technology, and sealing solutions in Slovenia.

“In this way, Axel Johnson International strengthens its position in the Slovenian power transmission market, successfully continuing the geographical expansion of the company,” Ketler & Partners reported.

The Ketler & Partners team included Senior Partner Marko Ketler and Senior Associate Nina Krajnc.