Decision 21/1990 on compensation for expropriated porperty
4 October 1990
Decision number: Decision 21/1990. (X. 4.)
Subject of the case:
Compensation for expropriated porperty
According to Article 70/A.1 of the Constitution and in the absence of constitutional reasons, if the property of certain people were to be reprivatised while that of others was not – depending on the type of property – this would amount to discrimination in relation to the acquisition of property. In examining the Government’s privatisation programme, it was necessary to clarify the conceptual uncertainty concerning the relationship between privatisation, reprivatisation and compensation. Privatisation involved the assignment of state property into private ownership while reprivatisation was the return of assets formerly owned by private persons but currently in the possession of the State. The term “compensation” was, however, used in a special sense by the Government: the sole legal basis for the partial compensation was fairness, the State was not obliged to pay such compensation and no former owner had the right to receive it since it depended solely on a sovereign state decision.
It was then necessary to consider two types of discrimination, first between the former owners and non-owners and then between the former owners according to the type of property. The constitutionality of the discrimination between former and non-owners depended on whether the interests of these two groups had been weighed with the same degree of prudence and impartiality. If it were the case that, with the preferential treatment of former owners, the distribution of state property would produce a more favourable overall social result as regards the constitutionally-mandated “market economy” than equal treatment would, then this would be permissible. In this type of situation, it was necessary to ascertain whether the right of former owners of land had had their interests considered as thoroughly and impartially as those of all other former owners in order to reveal the objective basis of the discrimination between former owners. Further, it had to be proved that former non-landowners had to be put into a disadvantageous position in order to achieve equality of persons as completely as possible in the future market economy. On its interpretation of Article 70/A of the Constitution, the discrimination in the Act under consideration would accordingly be unconstitutional.
The taking of property from co-operatives, even by virtue of law, without immediate, unconditional and full compensation violated Articles 12.1 and 13 of the Constitution. The recognition by the State under Article 12.1 of the Constitution that co-operatives were autonomous included the recognition that they had the right to property although the Constitution did not expressly provide for co-operative property. Article 9.1 of the Constitution provided a prohibition of discrimination (“the equal protection clause”) against any forms of ownership and further, under Article 13 of the Constitution, constitutional protection was also extended, inter alia, to the unnamed property of business associations. As co-operatives and agricultural co-operatives were a form of business association, irrespective of the fact that they were not regulated by the Act on Business Associations, the property of agricultural co-operatives (including arable land) enjoyed constitutional protection similar to that of the property of business associations. Consequently Articles 12.1 and 13.1 of the Constitution read together guaranteed the right to property including the right of agricultural co-operatives to the arable land they owned. Since property could be taken by a single official decree or by virtue of law only with immediate, unconditional and full compensation, the Government’s proposal was therefore unconstitutional.