ECJ Judgment Declares Hungary Legislation A Deprivation of Property Rights

On May 21, 2019, the Court of Justice of the European Union (ECJ) issued a judgment determining that a 2013 law of Hungary, that canceled usufruct rights (very basically, the rights to benefit from the use and advantages of another’s property), to all except those with “close family ties” with the owner, constituted a deprivation of property under the Charter of Fundamental Rights of the European Union (the “Charter”).

This followed a March 6, 2018 preliminary ruling of the ECJ holding that the legislation constituted an unjustified restriction on the free movement of capital.

In rendering its judgment, the ECJ noted that Article 17(1) of the Charter permits a deprivation of property “only where it is in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss.” (¶ 87 of Judgment). The Court found that Hungary’s claims of public interest were inadequate, and that the legislation contained “no terms ensuring that the usufructuaries who have been deprived of their property receive compensation or laying down the arrangements for such compensation.” (¶ 127 of Judgment). This judgment thus clears the way for expropriation actions against Hungary for expropriation of  property rights.

The press release is available here.

The full text of the judgment is available here. 

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