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European Court of Human Rights rules against Hungary in tobacco license case

Issues

The Hungarian state has been ordered to pay Lászlo Vékony the equivalent in forints of €15,000 for damages and €6,000 for costs and expenses, in line with the ruling of The European Court of Human Rights for the Hungarian state's violation of rules on private property when it cancelled a tobacco seller's license and failed to award him a new one in a tender following Hungary's introduction of a state monopoly on retail tobacco sales, Hungarian news agency MTI reported today.

According to the court, the act had violated Article 1 of Protocol No. 1, which entitles natural and legal persons "to the peaceful enjoyment of his possessions" and prohibits the deprivation of those possessions "except in the public interest and subject to the conditions provided for by law and by the general principles of international law".

Vékony had been running a store that sold tobacco products for more than 16 years when his application for a concession under the new tobacco selling system was rejected by the state. He turned to Strasbourg, as the loss of his job made it difficult to support his family. Vékony also alleged that discrepancies in the way applications for the concessions were evaluated could only be explained with political adherence.

In a joint concurring opinion, the judges in the case said contracting states "have an obligation to ensure that interferences amounting to control of the use of property, including the revocation of a license to run a business, strike a fair balance between individual rights and the general interest" and added that "a proper balance of these interests is not attained if the person concerned has had to bear an individual and excessive burden".

The judges further added that it "is not a sufficient basis for finding that the process of granting concessions was 'verging on arbitrariness'" and that "the court’s task is not to tell the state what it could or should have done in implementing its policy in this area...but rather to assess whether the way the applicant’s licence was revoked in the specific circumstances of the case amounted to an unjustified interference with his property rights under Article 1 of Protocol No. 1.".

The European Court of Human Rights ruling will become legally binding if neither party appeals the ruling within three months, if both parties say they do not wish to appeal, or if an appeal is rejected.

As the Hungarian government is bound by the decision, it will pay the necessary compensation, National Economy Minister Mihály Varga said at a press conference today.

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