International court favors Hungary in casino ruling

Issues

The International Center for Settlement of Investment Disputes (ICSID), in Washington, DC, yesterday ruled in favor of the state of Hungary, rejecting compensation sought by Israeli investors because of a failed casino investment, economy minister Mihály Varga told Hungarian news agency MTI yesterday.

The Israeli investors sought for more than HUF 100 bln in damages from the state of Hungary under an international investment protection agreement between Hungary and Cyprus, where their company was registered, earlier press information showed.

The Washington court's ruling is final and cannot be appealed, Beatrix Bártfai, the lawyer representing the state told MTI. ICSID decided that the state of Hungary acted lawfully when it cancelled the casino concession contract.

And, like the Curia, Hungary's supreme court, ICSID decided that a property swap deal, related to the project, was null and void, Bártfai said. The 2009 plans to build a casino and resort near Lake Velence in western Hungary for more than €1 bln were derailed after a land swap involving the site – that took place before Hungary's current government came to power – was put under scrutiny. The Curia declared the contract on the exchange of farm land for prime lakefront property null and void in 2012.

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