The Győr Administrative and Labour Court – while suspending its procedure – submitted a judicial initiative to the Constitutional Court. The judge requested to annul Section 108 (5) a) of the Act CCXII of 2013 on certain measures and transitional regulations related to the Act CXXII of 2013 on the Agricultural and Forestry Land Trade. According to the challenged regulation and also in line with Section 108 of the Act, contracts establishing beneficial interests and the right to use of the land were due to expire by way of the Act on the 1st of May, 2014. If there was a judicial decision that render back such an expired entitlement but there had been no legal possibilities by the time of the contract to register these rights due to substantial of formal errors, after the judicial decision the land registry had to notify the competent prosecutor and suspend its procedure. The challenged regulation stated that such a formal error was if the entitled of the use had been a legal person.

https://eur-lex.europa.eu/legal-content/fr/TXT/?uri=CELEX:62016CJ0052

https://eur-lex.europa.eu/legal-content/fr/TXT/?uri=CELEX:62016CJ0052

On the merits, the Constitutional Court held that Section 108 (5) a) of the Act CCXII of 2013 on certain measures and transitional regulations related to the Act CXXII of 2013 on the Agricultural and Forestry Land Trade did not directly terminate any certain rights and thus it neither infringed the right to property [Article XIII of the Fundamental Law of Hungary], nor violated the prohibition of retroactive effect [Article B) of the Fundamental Law of Hungary]. Nevertheless, the Constitutional Court decided that there was necessary to declare a constitutional requirement in line with Article 46 of the Act on the Constitutional Court. The reason was that the Curia of Hungary (Kúria), based on the SERGO Kft. judgment of the CJEU, accepted two principled decisions. Accordingly, the Curia declared the non-application of Section 108 (1) of the Act (that terminated the contracts of beneficial interest and uses on the 1st of May, 2014) since it violated the law of the European Union. Additionally, the Curia extended this interpretation to cases where the law of the European Union was not involved, claiming that otherwise it would have constituted reverse discrimination. The Constitutional Court declared that apart from the act of the law-maker, only an annulment decision adopted by the Constitutional Court might terminate, with universal effect, the applicability of the Hungarian law in force. According to the Constitutional Court, in the absence of a specific legal act uniformly applicable in the Member States of the European Union, a court cannot ignore a law in force by way of the broad interpretation of the judgment of the CJEU. On the contrary: the Fundamental Law obliges all state bodies, including the courts to defend the constitutional identity of Hungary. An unjustified failure to apply the existing domestic law violates the principle of the rule of law [Article B of the Fundamental Law]; therefore, the arbitrary non-application of a domestic law in force was in conflict with the Fundamental Law. As a result, the Constitutional Court established as a constitutional requirement that ordinary courts might not dispense with the application of a Hungarian law, provided that the law of the European Union was not affected.