CONSTITUTIONAL COURT: THE COURTS HAVE TO EXAMINE IN EACH CASE THE PURPOSE OF THE LAWS

18 December 2018

The Hungarian National Bank as the petitioner filed a constitutional complaint against the judgements of the Curia and the Budapest-Capital Administrative and Labour Court. The background of the case was a supervision carried out by the Hungarian National Bank concerning the operation of an investment company followed by initiating the liquidation of the company and launching an investigation against the member of the company’s board of directors. As a result of the investigation, the member of the board of directors was obliged  in a decision – signed by one of the Bank’s vice presidents acting in a so called “transferred power of issuance” “on the basis of the authorisation by the Financial Stability Board” – to pay a supervisory fine. The fined member of the board of directors requested the annulment of the decision due to the concerns related to issuing the decision. The court of first instance indeed annulled the decision as it held that the vice-president had made the decision in his own name by distracting the Financial Stability Board’s competence. The Curia maintained the effect of the final judgement of the court of first instance and it delivered a final decision in the merit of the question examined on the basis of the constitutional complaint.

In the present case, the Constitutional Court had to examine whether the interpretation of the concept of issuance found in the Curia’s judgement violate or not the petitioner’s right to fair procedure. In assessing this question, the Constitutional Court analysed the legislative environment, the purpose of the regulation and the facts of the concrete case as well. While according to the Curia, the term issuance is essentially a synonym of signing the decision, the lawmaker clearly indicated an intention to refer to a more flexible decision-making with regard to the amendment of the Act on the National Bank of Hungary. Courts have to interpret the laws by taking into account the purpose of the legal regulations, however, the Curia failed to take into account the the purpose of the legal regulation – despite of being bound to do so under the Fundamental Law. The adopted judicial decision has become an arbitrary one as it left the framework of legal interpretation set forth by the Fundamental Law for the Curia. On the basis of the above, the Constitutional Court established that the Curia’s judgement was in conflict with the Fundamental Law and therefore annulled it.

As noted by the Constitutional Court: the contents of the concept of issuance are different in case of administrative procedures and judicial procedures. At the court, issuance means the the authentication of further copies of the decision made and signed by the judge. On the other hand, in administrative procedures, in particular in the procedures by authorities, issuance also includes the actual decision-making.

Judges dr. Béla Pokol, dr. Marcel Szabó and dr. András Varga Zs. attached concurring opinions, while Judges dr. Ágnes Czine, dr. Egon Dienes-Oehm, dr. Ildikó Hörcherné-Marosi, dr. László Salamon, dr. Balázs Schanda, dr. István Stumpf and dr. Péter Szalay attached dissenting opinions to the decision.