In an ongoing lawsuit related to a land trade dispute, the Győr Administrative and Labour Court requested the Constitutional Court to annul one of the statutory provisions related to the Act on the trade of land. The Constitutional Court rejected the judicial initiative, however, it also ruled ex officio that in case of the application of a section of the Act on Certain Measures and Transitional Regulations related to the Act on Agricultural and Forestry Land Trade it is a constitutional requirement that the court may not refrain from applying Hungarian law, provided that EU law is not affected. In the case which gave rise to the judicial initiative, the plaintiff (a legal person) had had registered rights of use in respect of a number of real estates, however, the administrative authorities revoked its rights of use in line with a provision of the disputed section of the Act. According to the essence of the petition, the lawmaker violated the requirement of legal certainty, the prohibition of legislation with retroactive effect and the right to property when it resolved in the disputed statutory provision an issue, which has been subject to debate both in the legal literature and in the judicial case law, by declaring the right of use constituted for the benefit of a legal person was an error in conflict with the law. The Constitutional Court stated in its decision that the challenged provisions did not directly terminate a right and thus they did not infringe the petitioner’s right to property; the right of use has been abolished by law for the future, therefore, the provision does not violate the prohibition of retroactive effect either. The Constitutional Court also found that, although he had not upheld the petition, initiating the petition was still reasonable. Namely, in its recent rulings, the Curia, based on the CJEU’s SEGRO judgement, had first declared the application of the provision at issue in the present case to be contrary to European Union law, thus, based on the principle of the primacy of Union law, it had excluded the application of the Member State’s regulation contrary to Union law, and then extended it to situations not affected by EU law. The Constitutional Court therefore considered it necessary to resolve in the case the contradiction that arose between the primacy of EU law and the Fundamental Law as a result of judicial interpretations. Apart from the act of the lawmaker, only an annulment decision adopted by the Constitutional Court may terminate, with universal effect, the applicability and the force to be applied of a valid and effective Hungarian law; the decision of a court with such content is excluded by the Fundamental Law. 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 judgement of the Court of Justice of the European Union. 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, therefore, the arbitrary non-application, for whatever reason, of domestic law in force is in conflict with the Fundamental Law, thus it shall not be allowed either by the unjustified application of EU law or by resolving a perceived but in fact non-existent collision. The Constitutional Court thus established as a constitutional requirement that the court may not dispense with the application of Hungarian law, provided that EU law is not affected. Taking into account the constitutional requirement is mandatory for the courts not only in the case under investigation, but also in general, and in case of any doubt in this respect, it is justified to submit a judicial initiative to the Constitutional Court concerning domestic law, because only in this case will the Constitutional Court be in a position to resolve a potential collision.
Acting ex officio, the Constitutional Court stated that the omission by the National Assembly had resulted in a situation in conflict with the Fundamental Law, because together with restricting the retail trade of electronic cigarettes and the connected products to the tobacco shops with mandatory concession, it failed to provide appropriate compensation for those affected by the restriction of the right to enterprise, therefore, the Constitutional Court called upon the National Assembly to meet its obligation of legislation. The decision is based on the initiative of MPs for posterior norm control and the constitutional complaint submitted by a company trading with electronic cigarettes and its accessories, who challenged the provision in the Act on repelling smoking among young people and on the retail trade of tobacco products, restricting to tobacco shops the retail trade of certain products, such as electronic cigarette, refill cans and electronic devices imitating smoking. Since 2011, the petitioner company has been specialised on the retail trade of electronic cigarette and its accessories through its webshop and its shops, however, due to the amendment of the law in 2016, it had to terminate its commercial activity related to the relevant products, it had to close its shops and to dismiss two thirds of its employees, and it could not sell the remaining stock of products. Due to the prohibition of online sales, the business activity of the petitioner company has become impossible, and the law-maker failed to provide for compensation, failed to provide for an opportunity to continue its operation by announcing new concessions. According to the petitioner, the regulation violated its right to property and the right to enterprise, and it is also against the prohibition of discrimination. In the context of the right to enterprise, the Constitutional Court pointed out in the decision that the scope of protection of this fundamental right covers both the market entry and the continuation of a commenced activity, although it underlined that the relevant fundamental right does not guarantee that no changes may take place in the legal environment. In enacting a limitation, the legislator is bound to employ the most moderate means suitable for reaching the specified purpose, i.e. the limitation should not exceed the level absolutely necessary for achieving the constitutionally justifiable objective. In the context of the restriction of the right to enterprise, the subject matter of the explicit concern is the manner of its practical realisation: the position of the enterprises engaged in the retail trade of electronic cigarettes already operating at the time of the entry into force of the amendment of the law was made less advantageous due to the fact that the law-maker did not pay any attention to their fundamental right to maintain their business activity, or to the actual damage incurred in the particular case, resulting from the statute under review. Based on the above, for the purpose of eliminating the situation being contrary to the Fundamental Law – also with due regard to the need to proceed by saving the law in force – the Constitutional Court stated that there has been a situation contrary to the Fundamental Law caused by an omission, as the provisions of the Act and of the fundamental Law may be harmonised by way of establishing a legislative omission and by making a call upon the law-maker.