Contents
Judgment of the Court (Third Chamber)10 March 2022note(Reference for a preliminary ruling — Principles of EU law — Primacy — Direct effect — Sincere cooperation — Article 4(3) TEU — Article 63 TFEU — Obligations on a Member State as a result of a preliminary ruling — Interpretation of a provision of EU law given by the Court in a preliminary ruling — Obligation to give full effect to EU law — Obligation for a national court to disapply national legislation which contravenes EU law as interpreted by the Court — Administrative decision which became final in the absence of a challenge before the courts — Principles of equivalence and effectiveness — Liability of the Member State)In Case C‑177/20,REQUEST for a preliminary ruling under Article 267 TFEU from the Győri Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Győr, Hungary), made by decision of 6 March 2020, received at the Court on 7 April 2020, in the proceedings‘Grossmania’ Mezőgazdasági Termelő és Szolgáltató Kft.vVas Megyei Kormányhivatal,THE COURT (Third Chamber),composed of A. Prechal (Rapporteur), President of the Second Chamber, acting as President of the Third Chamber, J. Passer, F. Biltgen, L.S. Rossi and N. Wahl, Judges,Advocate General: E. Tanchev,Registrar: M. Krausenböck, Administrator,having regard to the written procedure and further to the hearing on 2 June 2021,after considering the observations submitted on behalf of:– ‘Grossmania’ Mezőgazdasági Termelő és Szolgáltató Kft., by T. Szendrő-Németh, ügyvéd,– the Hungarian Government, by M.Z. Fehér, acting as Agent,– the German Government, by J. Möller and R. Kanitz, acting as Agents,– the Spanish Government, by J. Rodríguez de la Rúa Puig, acting as Agent,– the European Commission, by F. Erlbacher, L. Malferrari and L. Havas, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 16 September 2021,gives the following
Judgment
1This request for a preliminary ruling concerns the interpretation of Article 267 TFEU.
2The request has been made in proceedings between ‘Grossmania’ Mezőgazdasági Termelő és Szolgáltató Kft. (‘Grossmania’) and the Vas Megyei Kormányhivatal (Vas Region Administrative Department, Hungary) concerning the legality of a decision rejecting a request for the reinstatement in the land register of rights of usufruct which were extinguished by operation of law and deleted from that register.
Legal context
European Union law
3Annex X to the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded (OJ 2003 L 236, p. 33) is entitled ‘List referred to in Article 24 of the Act of Accession: Hungary’. Chapter 3 of that annex, entitled ‘Free movement of capital’, provides in paragraph 2:‘Notwithstanding the obligations under the Treaties on which the European Union is founded, Hungary may maintain in force for seven years from the date of accession the prohibitions laid down in its legislation existing at the time of signature of this Act on the acquisition of agricultural land by natural persons who are non-residents or non-nationals of Hungary and by legal persons. In no instance may nationals of the Member States or legal persons formed in accordance with the laws of another Member State be treated less favourably in respect of the acquisition of agricultural land than at the date of signature of the Accession Treaty. …Nationals of another Member State who want to establish themselves as self-employed farmers and who have been legally resident and active in farming in Hungary at least for three years continuously, shall not be subject to the provisions of the preceding subparagraph or to any rules and procedures other than those to which nationals of Hungary are subject.…If there is sufficient evidence that, upon expiry of the transitional period, there will be serious disturbances or a threat of serious disturbances on the agricultural land market of Hungary, the [European] Commission, at the request of Hungary, shall decide upon the extension of the transitional period for up to a maximum of three years.’
4By Commission Decision 2010/792/EU of 20 December 2010 extending the transitional period concerning the acquisition of agricultural land in Hungary (OJ 2010 L 336, p. 60), the transitional period referred to in paragraph 2 of Chapter 3 of Annex X to the Act of Accession referred to in the preceding paragraph was extended until 30 April 2014.
Hungarian law
5Paragraph 38(1) of földről szóló 1987. évi I. törvény (Law No I of 1987 on land) provided that natural persons who did not possess Hungarian nationality or who did possess that nationality but resided permanently outside Hungary, as well as legal persons whose seat was outside Hungary or whose seat was in Hungary but whose capital was held by natural or legal persons resident or established outside Hungary, could acquire ownership of productive land by means of purchase, exchange or donation only with the prior authorisation of the Minister for Finance.
6Paragraph 1(5) of 171/1991 Korm. rendelet (Government Decree 171/1991) of 27 December 1991, which entered into force on 1 January 1992, precluded the acquisition of productive land by persons not having Hungarian nationality, with the exception of persons in possession of a permanent residence permit and those with refugee status.
7Termőföldről szóló 1994. évi LV. törvény (Law No LV of 1994 on productive land, ‘the 1994 Law on productive land’) maintained that prohibition on acquisition and extended it to legal persons, whether or not they were established in Hungary.
8That law was amended, with effect from 1 January 2002, by termőföldről szóló 1994. évi LV. törvény módosításáról szóló 2001. évi CXVII. törvény (Law No CXVII of 2001 amending Law No LV of 1994 on productive land), in order also to preclude a right of usufruct over productive land from being created by contract in favour of natural persons not possessing Hungarian nationality or legal persons. Following those amendments, Paragraph 11(1) of the 1994 Law on productive land provided that ‘for the right of usufruct and the right of user to be created by contract, the provisions of Chapter II regarding the restriction on the acquisition of property must be applied. …’
9Paragraph 11(1) of the 1994 Law on productive land was subsequently amended by egyes agrár tárgyú törvények módosításáról szóló 2012. évi CCXIII. törvény (Law No CCXIII of 2012 amending certain laws on agriculture). In the new version resulting from that amendment, which entered into force on 1 January 2013, Paragraph 11(1) provided that ‘the right of usufruct created by a contract shall be null and void, unless it is created for the benefit of a close relation’. Law No CCXIII of 2012 also introduced into the 1994 Law a new Paragraph 91(1), in accordance with which ‘any right of usufruct existing on 1 January 2013 and created, for an indefinite period or for a fixed term expiring after 30 December 2032, by a contract between persons who are not close members of the same family shall be extinguished by operation of law on 1 January 2033’.
10Mező- és erdőgazdasági földek forgalmáról szóló 2013. évi CXXII. törvény (Law No CXXII of 2013 on transactions in agricultural and forestry land, ‘the 2013 Law on agricultural land’) was adopted on 21 June 2013 and entered into force on 15 December 2013.
11Paragraph 37(1) of the 2013 Law on agricultural land maintains the rule that a right of usufruct or a right of user over such land that is created by contract is to be null and void unless it was created for the benefit of a close member of the same family.
12Mező- és erdőgazdasági földek forgalmáról szóló 2013. évi CXXII. törvénnyel összefüggő egyes rendelkezésekről és átmeneti szabályokról szóló 2013. évi CCXII. törvény (Law No CCXII of 2013 laying down various provisions and transitional measures concerning Law No CXXII of 2013 on transactions in agricultural and forestry land, ‘the 2013 Law on transitional measures’) was adopted on 12 December 2013 and entered into force on 15 December 2013.
13Paragraph 108(1) of that law, which repealed Paragraph 91(1) of the 1994 Law on productive land, states:‘Any right of usufruct or right of user existing on 30 April 2014 and created, for an indefinite period or for a fixed term expiring after 30 April 2014, by a contract between persons who are not close members of the same family shall be extinguished by operation of law on 1 May 2014.’
14Following the delivery of the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), Paragraph 108 of the 2013 Law on transitional measures was amended by the addition, with effect from 11 January 2019, of two new subparagraphs 4 and 5, which are worded as follows:4. Where, pursuant to a judicial decision, a right extinguished under subparagraph 1 must be restored, but, because of a formal or material defect, that right could not be registered in accordance with the legislation in force at the time of its original registration, the authority responsible for administering the land register must inform the Public Prosecutor’s Office and stay the proceedings pending the conclusion of the investigation by the Public Prosecutor’s Office and the resultant judicial proceedings.5.The following shall constitute an error within the meaning of subparagraph 4:(a) the holder of the right of user is a legal person;(b) the right of usufruct or the right of user was registered in the land register after 31 December 2001 in favour of a holder who is a legal person, or a natural person not of Hungarian nationality;(c) at the time when the application to register the right of usufruct or the right of user was made, acquisition of the right required a certificate or authorisation issued by another authority, in accordance with the legislation then in force, but the applicant failed to provide that document.’
15Paragraph 94 of ingatlan-nyilvántartásról szóló 1997. évi CXLI. törvény (Law No CXLI of 1997 on the land register, ‘the Law on the land register’) provides:1. With a view to the deletion from the land register of rights of usufruct and rights of user (for the purposes of this paragraph referred to collectively as “rights of usufruct”) extinguished under Paragraph 108(1) of [the 2013 Law on transitional measures], the natural person holding rights of usufruct shall, upon being notified sent on 31 October 2014 at the latest by the authority responsible for administering the land register, within 15 days of the delivery of such notice declare, using the form prescribed for that purpose by the Minister, the existence, as the case may be, of a close family relationship with the person shown as owner of the property in the document which served as the basis for registration. Where no declaration is made within the prescribed period, no application for continuation shall be accepted after 31 December 2014.…3. If the declaration does not reveal a close family relationship, or if no declaration has been made within the prescribed period, the authority responsible for administering the land register shall of its own motion delete the rights of usufruct from the register within six months following the expiry of the deadline for making the declaration and no later than 31 July 2015.…5. The authority responsible for administering the land register shall, no later than 31 December 2014, of its own motion delete from the land register any right of usufruct which was registered on behalf of a legal person or an entity not having legal personality but having the capacity to acquire a registrable right and which has been cancelled pursuant to Paragraph 108(1) of [the 2013 Law on transitional measures].’
The dispute in the main proceedings and the question referred for a preliminary ruling
16Grossmania, a commercial company with its registered office in Hungary, but whose members are natural persons who are nationals of other Member States, held rights of usufruct which it had acquired over agricultural parcels situated in Jánosháza and in Duka (Hungary).
17Following the extinguishment by operation of law, on 1 May 2014, of those rights of usufruct, in accordance with Paragraph 108(1) of the 2013 Law on transitional measures, those rights were deleted from the land register by the competent authority pursuant to Paragraph 94(5) of the Law on the land register. Grossmania did not bring an action against that deletion.
18Since the Court held by its judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), that Article 63 TFEU precludes national legislation under which rights of usufruct which had previously been created over agricultural land and the holders of which do not have the status of a close relation of the owner of that land are extinguished by operation of law and are, consequently, deleted from the land registers, Grossmania applied on 10 May 2019 to the Vas Megyei Kormányhivatal Celldömölki Járási Hivatala (Celldömölk District Registry, part of the Vas Region Administrative Department, Hungary) to have its rights of usufruct reinstated.
19By decision of 17 May 2019, that authority declared that application to be inadmissible on the basis of Paragraph 108(1) of the 2013 Law on transitional measures and Paragraph 37(1) of the 2013 Law on agricultural land.
20Grossmania brought an administrative appeal against that decision before the Vas Region Administrative Department which confirmed it by decision of 5 August 2019, on the ground that Paragraph 108(1) of the 2013 Law on transitional measures and Paragraph 37(1) of the 2013 Law on agricultural land were still in force and prevented the reinstatement sought. As regards the argument based on the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), that department stated that it was applicable only to the individual cases in which it had been delivered. As regards the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), delivered in an action for failure to fulfil obligations concerning the same national legislation, that department stated that it was authoritative with regard to compensation, but not with regard to the reinstatement of rights of usufruct which had previously been deleted.
21Grossmania brought an action against the decision of 5 August 2019 before the Győri Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Győr, Hungary), the referring court.
22That court states, first of all, that, at the time of the dispute in the main proceedings, there was still no provision in domestic law on the basis of which Grossmania could be compensated for the loss resulting from the extinguishment by operation of law and the deletion of its rights of usufruct.
23It is true that, in a judgment of 21 July 2015, the Alkotmánybíróság (Constitutional Court, Hungary) found, first, that the Magyarország Alaptörvénye (Hungarian Basic Law) had been infringed in that the national legislature had not adopted, with regard to rights of usufruct and rights of user lost under Paragraph 108 of the 2013 Law on transitional measures, provisions allowing compensation for exceptional pecuniary losses caused by the cancellation of those rights which could not be remedied by means of a settlement between the parties to the contract, and, second, called on the national legislature to address that shortcoming by 1 December 2015 at the latest. However, at the time of the dispute in the main proceedings, no measure had yet been adopted for that purpose.
24The referring court goes on to state that, since Grossmania could not obtain compensation, it had no option but to request the reinstatement of its rights of usufruct. In that context, the referring court is uncertain as to the scope of the binding effects of the Court’s judgments delivered on a reference for a preliminary ruling.
25In that regard, it recalls that, according to the case-law of the Court, because of the binding nature of the interpretation previously provided by the Court under Article 267 TFEU, a national court adjudicating at last instance is under no obligation to make a reference for a preliminary ruling where the question raised is materially identical to a question which has already been the subject of a preliminary ruling in a similar case or where previous decisions of the Court have already dealt with the point of law in question, irrespective of the nature of the proceedings which led to those decisions, even though the questions at issue are not strictly identical. It also states that the interpretation provided by the Court has ex tunc effect in that the rule thus interpreted may and must be applied by the national court even to legal relationships arising and established before the judgment ruling on the request for interpretation.
26According to the referring court, it is clear from the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), that Paragraph 108(1) of the 2013 Law on transitional measures, on the basis of which the decision at issue in the main proceedings was adopted, contravenes EU law and that such a finding is also valid for the purposes of the dispute in the main proceedings.
27However, that court notes that, unlike the situations that gave rise to the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), Grossmania did not contest the deletion of its rights of usufruct before the courts. It therefore asks whether the guidance provided in that judgment may be applicable to the dispute in the main proceedings and, in particular, whether it may disregard Paragraph 108(1) of the 2013 Law on transitional measures on the ground that it contravenes EU law and order the respondent in the main proceedings to reinstate Grossmania’s rights of usufruct, in view, moreover, of the entry into force in the meantime of subparagraphs 4 and 5 of Paragraph 108.
28It was in those circumstances that the Győri Közigazgatási és Munkaügyi Bíróság (Administrative and Labour Court, Győr) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Must Article 267 TFEU be interpreted as meaning that, where the Court of Justice, in a decision given in preliminary ruling proceedings, has declared a legislative provision of a Member State to be incompatible with EU law, that legislative provision cannot be applied in subsequent national administrative or judicial proceedings either, notwithstanding that the facts of the subsequent proceedings are not entirely identical to those of the previous preliminary ruling proceedings?’
Consideration of the question referred
29It should be noted that, according to the settled case-law of the Court, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to decide the case before it. To that end, the Court should, where necessary, reformulate the questions referred to it (judgment of 26 October 2021, C‑109/20, PL Holdings, EU:C:2021:875, paragraph 34 and the case-law cited).
30In that regard, it follows from the request for a preliminary ruling, first, that the referring court’s question, which concerns the issue whether it is required to disapply national legislation which it considers to be incompatible with EU law as interpreted by the Court in a judgment given in a reference for a preliminary ruling, in the present case the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), relating to Article 63 TFEU, falls within the context of a dispute which, while it concerns an application for annulment of the decision refusing to reinstate rights of usufruct which had been extinguished by operation of law and deleted from the land register under the same national legislation as that at issue in the cases leading to that judgment, differs from those cases in that, unlike the persons concerned in those cases, the applicant in the main proceedings did not contest before the courts the deletion of its rights of usufruct within the legal time limits.
31Secondly, the referring court asks whether, in the absence under Hungarian law of a legal basis allowing Grossmania to be compensated for the losses resulting from the extinguishment by operation of law and the deletion of its rights of usufruct, it can order the defendant in the main proceedings to reinstate those rights, in accordance with a request to that effect made by that company.
32In those circumstances, the question referred by the national court must be understood as asking whether EU law, in particular Article 267 TFEU, must be interpreted as meaning that a national court before which an action has been brought against a decision rejecting a request for the reinstatement of rights of usufruct which have been extinguished by operation of law and deleted from the land register pursuant to national legislation that is incompatible with Article 63 TFEU as interpreted by the Court in a preliminary ruling, is required, first, to disapply that legislation and, secondly, to order the competent administrative authority to reinstate those rights of usufruct, even though the deletion of those rights was not contested before the courts within the legal time limits.
33In that regard, it should be noted that, while the referring court mentioned in its request for a preliminary ruling only the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), the national legislation at issue in the case which gave rise to that judgment and in the case in the main proceedings also gave rise to the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), delivered in an action for failure to fulfil obligations brought by the Commission under Article 258 TFEU.
34In that judgment, the Court held that, by adopting Paragraph 108(1) of the 2013 Law on transitional measures and thereby cancelling by operation of law the rights of usufruct over agricultural and forestry land located in Hungary and which was held directly or indirectly by nationals of other Member States, Hungary failed to fulfil its obligations under the combined provisions of Article 63 TFEU and Article 17 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
35Under Article 260(1) TFEU, if the Court finds that a Member State has failed to fulfil its obligations under the Treaties, that Member State is required to take the necessary measures to comply with the judgment of the Court which has the force of res judicata as regards the matters of fact and law actually or necessarily settled by the judicial decision in question (see, to that effect, judgment of 24 January 2013, Commission v Spain, C‑529/09, EU:C:2013:31, paragraphs 65 and 66).
36Thus, if the authorities of the Member State concerned, which is participating in the exercise of legislative power, are under a duty to amend national provisions which have been the subject of a judgment establishing a failure to fulfil obligations so as to make them conform with the requirements of EU law, the courts of that Member State, for their part, have an obligation to ensure, when performing their duties, that the Court’s judgment is complied with, which means, in particular, that it is the duty of the national court, by virtue of the authority attaching to that judgment, to take account, if need be, of the elements of law established by that judgment in order to determine the scope of the provisions of EU law which it has the task of applying (see, to that effect, judgment of 14 December 1982, Waterkeyn and Others, 314/81 to 316/81 and 83/82, EU:C:1982:430, paragraphs 14 and 15).
37In the present case, it is apparent from the order for reference that Paragraph 108(1) of the 2013 Law on transitional measures was still in force when the decision refusing to reinstate the rights of usufruct at issue in the main proceedings was adopted, that national provision having been relied on by the competent national authorities in order to justify that decision. Thus, on that date, the Hungarian authorities exercising legislative power had not adopted any measure implementing the judgment establishing a failure to fulfil obligations referred to in paragraph 33 above.
38The fact remains that, notwithstanding the failure to adopt such measures, the referring court is required to take all measures to facilitate the full application of EU law in accordance with the dicta in the judgment establishing a failure to fulfil obligations (see, to that effect, judgments of 19 January 1993, Commission v. Italy, C‑101/91, EU:C:1993:16, paragraph 24, and of 18 January 2022, Thelen Technopark Berlin, C‑261/20, EU:C:2022:33, paragraph 39).
39In the present case, it must be recalled, in the first place, that in the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), mentioned by the referring court, the Court of Justice held that Article 63 TFEU must be interpreted as precluding national legislation under which rights of usufruct which have previously been created over agricultural land and the holders of which do not have the status of a close relation of the owner of that land, are extinguished by operation of law and are, as a result, deleted from the land registers.
40The Court held, first of all in paragraphs 62 to 64 of that judgment, that by providing for the extinguishment by operation of law of rights of usufruct held over agricultural land by nationals of Member States other than Hungary, the national legislation concerned, by its very purpose and on account of that fact alone, restricted the right of the persons concerned to the free movement of capital guaranteed in Article 63 TFEU, in so far as that legislation deprives them both of the possibility of continuing to enjoy their rights of usufruct, by preventing them, inter alia, from using and farming the land concerned or from letting it to tenant farmers and thereby making money from it, and of any possibility of alienating that right. Next, in paragraph 65 of that judgment, the Court added that that legislation was likely to discourage non-residents from making investments in Hungary in the future. Finally, in paragraphs 24, 94 and 107 of that judgment, the Court held that that restriction on the free movement of capital could not be justified on the basis of the evidence put forward by Hungary.
41In the second place, as regards the question whether such an interpretation of Article 63 TFEU, provided in a preliminary ruling under Article 267 TFEU, entails for the referring court an obligation to disapply the national legislation at issue, it should be recalled that, in accordance with the settled case-law of the Court, the interpretation which, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, the Court gives of a rule of EU law, clarifies and defines, where necessary, the meaning and scope of that rule as it must be or ought to have been understood and applied from the time it came into force (judgment of 7 August 2018, Hochtief, C‑300/17, EU:C:2018:635, paragraph 55). In other words, a preliminary ruling does not create or alter the law, but is purely declaratory (judgment of 28 January 2015, Starjakob, C‑417/13, EU:C:2015:38, paragraph 63).
42Thus, where the Court’s case-law has provided a clear answer to a question concerning the interpretation of EU law, the national court is required to do everything necessary to ensure that that interpretation is applied (see, to that effect, judgment of 5 April 2016, PFE, C‑689/13, EU:C:2016:199, paragraph 42).
43Furthermore, in the light of the primacy principle, where it is unable to interpret national law in compliance with the requirements of EU law, the national court which is called upon within the exercise of its jurisdiction to apply provisions of EU law is under a duty to give full effect to those provisions, if necessary refusing of its own motion to apply any provision of national legislation, even if adopted subsequently, which contravenes a provision of EU law having direct effect, and it is not necessary for that court to request or await the prior setting aside of such provision by legislative or other constitutional means (see, to that effect, judgment of 24 June 2019, Popławski, C‑573/17, EU:C:2019:530, paragraphs 58 and 61).
44As regards Article 63 TFEU, referred to in the present request for a preliminary ruling, it follows from the Court’s settled case-law that that article has direct effect, so that it may be relied on before national courts and may render national rules that are inconsistent with it inapplicable (see, to that effect, judgment of 14 September 2017, The Trustees of the BT Pension Scheme, C‑628/15, EU:C:2017:687, paragraph 49).
45In the present case, since the national legislation at issue in the main proceedings is incompatible with Article 63 TFEU, as is apparent from the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), the referring court, hearing an action for annulment of a decision based, inter alia, on that legislation, is required to ensure that Article 63 TFEU is given full effect by disapplying that national legislation for the purposes of resolving the dispute pending before it.
46It should be added that the same obligation was incumbent on the national administrative authorities before which the applicant in the main proceedings applied for the reinstatement of its rights of usufruct in the land register (see, to that effect, judgment of 4 December 2018, Minister for Justice and Equality and Commissioner of An Garda Síochána, C‑378/17, EU:C:2018:979, paragraph 38 and the case-law cited), since those authorities, in breach of that obligation, nevertheless continued to apply the national legislation at issue in the main proceedings and therefore rejected that application.
47In the third place, as regards the fact that Grossmania did not contest before the courts, within the time limits laid down for that purpose, the deletion of its rights of usufruct, it must be noted that the referring court has not explained how such a circumstance raises any difficulty for the resolution of the dispute in the main proceedings. In that context, that court merely observed that the refusal of the competent national authority to reinstate the rights of usufruct of the applicant in the main proceedings was based on the fact that Paragraph 108(1) of the 2013 Law on transitional measures and Paragraph 37(1) of the 2013 Law on agricultural land were still in force. Nevertheless, the Hungarian Government stated in its observations before the Court that, under national law, in the absence of any challenge, deletion from the register had become final and prevented the rights of usufruct from being reinstated in the land register.
48Although, under the cooperation provided for in Article 267 TFEU, it is not for the Court to determine the accuracy of the legislative and factual context which the national court is responsible for defining, it is not inconceivable in the present case that the referring court’s doubts may stem from the fact that the definitive nature of the deletion of the rights of usufruct prevents it from drawing, for the purposes of the dispute in the main proceedings, all the consequences resulting from the unlawfulness of the national legislation at issue in the main proceedings.
49Should that situation prove to be well founded and in order to provide the referring court with a useful answer, it must be borne in mind that, in accordance with the principle of procedural autonomy, it is for the national legal order of each Member State to establish procedural rules for actions intended to safeguard the rights of individuals, on condition, however, that those rules are not, in situations covered by EU law, less favourable than in similar domestic situations (principle of equivalence) and that they do not make it excessively difficult or impossible in practice to exercise the rights conferred by EU law (principle of effectiveness) (see, to that effect, judgment of 10 March 2021, Konsul Rzeczypospolitej Polskiej w N., C‑949/19, EU:C:2021:186, paragraph 43 and the case-law cited).
50As regards compliance with the principle of equivalence, it is for the referring court to ascertain that, under Hungarian law, the possibility of contesting a measure deleting rights of usufruct which has become final, in an action brought against a decision rejecting an application for the reinstatement of those rights, does not differ according to whether that measure infringes national law or EU law.
51As regards compliance with the principle of effectiveness, it should be noted that, in accordance with the case-law, every case in which the question arises as to whether a national procedural provision makes the application of EU law impossible or excessively difficult must be analysed by reference to the role of that provision in the procedure, its operation and its particular features, viewed as a whole, before the various national bodies. In that context, it is necessary to take into consideration, where relevant, the principles which lie at the basis of the national legal system, such as the protection of the rights of the defence, the principle of legal certainty and the proper conduct of the proceedings (judgment of 20 May 2021, X (LPG road tankers), C‑120/19, EU:C:2021:398, paragraph 72).
52The Court has already recognised that the finality of an administrative decision, which is acquired upon expiry of reasonable time limits for legal remedies, contributes to legal certainty, with the consequence that EU law does not require that administrative bodies be placed under an obligation, in principle, to reopen an administrative decision which has become final in that way (judgment of 12 February 2008, Kempter, C‑2/06, EU:C:2008:78, paragraph 37). Compliance with the principle of legal certainty prevents administrative acts which produce legal effects from being called into question indefinitely (judgment of 19 September 2006, i-21 Germany and Arcor, C‑392/04 and C‑422/04, EU:C:2006:586, paragraph 51).
53In the present case, it is apparent from the documents before the Court that the time limit for lodging a complaint against a decision of the national authority responsible for the land register is 15 days from its notification and that, if that complaint is rejected, the period for bringing legal proceedings is 30 days from notification of that rejection. Such time limits are, in principle, sufficient to enable the persons concerned to contest such a decision.
54However, the Court has held, in essence, that particular circumstances may be capable, by virtue of the principles of effectiveness and sincere cooperation arising from Article 4(3) TEU, of requiring a national administrative body to review an administrative decision that has become final. In that context, it is necessary to take account of the particular features of the situations and interests at issue in order to strike a balance between the requirement for legal certainty and the requirement for legality under EU law (see, to that effect, judgment of 20 December 2017, Incyte, C‑492/16, EU:C:2017:995, paragraph 48 and the case-law cited).
55In the present case, Grossmania’s rights of usufruct were deleted from the land register on the basis of national legislation which, as has been pointed out in paragraph 40 above, by providing for the extinguishment by operation of law of the rights of usufruct held over agricultural land by nationals of Member States other than Hungary, restricts, by its very purpose and on account of that fact alone, the right of the persons concerned to the free movement of capital guaranteed in Article 63 TFEU, without there being any evidence capable of justifying such a restriction.
56In addition, as is apparent from the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), in particular paragraphs 81, 86, 124, 125 and 129 thereof, that national legislation also infringes the right to property guaranteed in Article 17(1) of the Charter in that, by definition, it deprives the persons concerned – in a compulsory, complete and definitive manner – of those rights of usufruct, without it being justified on the ground that it is in the public interest; nor were any arrangements in place whereby fair compensation is paid in good time.
57It follows from the foregoing that the national legislation at issue in the main proceedings, like the decisions implementing that legislation, constitutes a manifest and serious infringement both of the fundamental freedom provided for in Article 63 TFEU and of the right to property guaranteed in Article 17(1) of the Charter. That infringement appears, moreover, to have had significant repercussions since, as the Advocate General noted in point 50 of his Opinion, by relying on the information provided by the Hungarian Government in the cases which led to the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157, paragraph 71), more than 5000 nationals of Member States other than Hungary were affected by the cancellation of their rights of usufruct.
58In those circumstances, in view of the far-reaching adverse consequences caused by the national legislation at issue in the main proceedings and by the deletion of the rights of usufruct implementing it, particular importance must be attached to the requirement of legality under EU law.
59As regards the requirement for legal certainty, it should be added that Paragraph 108 of the 2013 Law on transitional measures made provision, in respect of the rights of usufruct to which it refers, for the extinguishment ‘by operation of law’ of those rights on 1 May 2014, with those rights then being deleted from the land register by a decision adopted for that purpose pursuant to Paragraph 94 of the Law on the land register.
60That extinguishment ‘by operation of law’ of the rights of usufruct, given its nature, is intended to produce its effects independently of the deletion decisions adopted subsequently under Paragraph 94 of the Law on the land register.
61Therefore, even if the deletion of the rights of usufruct constitutes, as the Hungarian Government submitted at the hearing, an event independent of the extinguishment by operation of law of those rights, the national legislation at issue in the main proceedings, by thus defining the detailed rules for such extinguishment, is liable to give rise to confusion as to whether it is necessary for the holders of rights of usufruct affected by extinguishment by operation of law to contest the subsequent deletion decisions in order to safeguard their rights of usufruct.
62It follows that, if it were to be confirmed that Hungarian law does not make it possible, in an action brought against the rejection of a request for reinstatement of rights of usufruct, to contest the measure deleting those rights, which has since become final, that impossibility cannot reasonably be justified by the requirement for legal certainty and therefore ought to be rejected by that court as being contrary to the principle of effectiveness and the principle of sincere cooperation arising from Article 4(3) TEU.
63In the fourth place, as regards the question whether, in circumstances such as those in the main proceedings, once the national legislation has been disapplied, the competent authorities are required in all circumstances to reinstate the rights of usufruct concerned or whether that unlawful cancellation can be remedied by other means, it must be noted that, under the principle of sincere cooperation laid down in Article 4(3) TEU, the Member States are required to nullify the unlawful consequences of an infringement of EU law (judgment of 25 June 2020, A and Others (Wind turbines at Aalter and Nevele), C‑24/19, EU:C:2020:503, paragraph 83).
64Therefore, following a judgment delivered on a request for a preliminary ruling from which it is clear that national legislation is incompatible with EU law, it is for the authorities of the Member State concerned not only to disapply such legislation, in accordance with the case-law recalled in paragraph 43 above, but also to take all other general or particular measures necessary to ensure that EU law is complied with within that state (see, to that effect, judgment of 21 June 2007, Jonkman and Others, C‑231/06 to C‑233/06, EU:C:2007:373, paragraph 38).
65In the absence of specific rules in EU law on how to nullify the unlawful consequences of an infringement of Article 63 TFEU in circumstances such as those in the main proceedings, such measures may consist, inter alia, in the reinstatement of unlawfully cancelled rights of usufruct in the land register, in so far as such reinstatement is the most suitable means of restoring, at least with prospective effect, the legal and factual situation in which the person concerned would have been had it not been for the unlawful cancellation of its rights.
66However, as the Advocate General stated, in essence, in point 55 of his Opinion, in specific cases, objective and legitimate obstacles, in particular those of a legal nature, may preclude such a measure, in particular where, since the cancellation of the rights of usufruct, a new owner has acquired in good faith the land affected by the rights concerned or where that land has been restructured.
67In the present case, it will be for the referring court to ascertain, in the light of the legal and factual situation existing at the time of ruling, whether it is appropriate to order the competent authority to reinstate the rights of usufruct held by Grossmania.
68It is only in the event that such reinstatement proves impossible that it would be necessary, in order to nullify the unlawful consequences of the infringement of EU law, to grant the former holders of the cancelled rights of usufruct the right to compensation, whether financial or other, the value of which would be capable of making financial reparation for the economic loss arising from the cancellation of those rights.
69Furthermore, independently of the measures referred to in paragraphs 65 and 68 above, which seek to nullify the unlawful consequences of the breach of Article 63 TFEU, the full effectiveness of EU law means that individuals harmed by a breach of that law must, by virtue of the principle of State liability for loss or damage caused by such a breach, also have a right to compensation, since three conditions have been satisfied, that is to say the breached rule of EU law must be intended to confer rights on them, the breach of that rule must be sufficiently serious and there must be a direct causal link between that breach and the harm suffered by the individuals (judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 51, and of 24 March 2009, Danske Slagterier, C‑445/06, EU:C:2009:178, paragraph 20).
70In the present case, first of all, Article 63 TFEU is intended to confer rights on individuals, in so far as it grants, in circumstances such as those in the main proceedings, the right to the holders of rights of usufruct not to be deprived of those rights in breach of that article (see, by analogy, judgment of 14 September 2017, The Trustees of the BT Pension Scheme, C‑628/15, EU:C:2017:687, paragraph 48). Similarly, Article 17 of the Charter constitutes a rule of law intended to confer rights on individuals (judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land), C‑235/17, EU:C:2019:432, paragraph 68).
71Next, it follows from the Court’s settled case-law that an infringement of EU law will clearly be sufficiently serious if it has persisted despite a judgment finding the breach in question to be established, or despite a preliminary ruling or settled case-law of the Court on the matter from which it is clear that the conduct in question constituted a breach (judgment of 30 May 2017, Safa Nicu Sepahan v Council, C‑45/15 P, EU:C:2017:402, paragraph 31). That is the case here, as was pointed out in paragraph 37 above.
72Finally, in the light of the judgments of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157), and of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), there appears to be a direct causal link between the infringement of Article 63 TFEU and the harm suffered by Grossmania as a result of that infringement, which it is for the referring court or, as the case may be, the court having jurisdiction under Hungarian law to determine.
73In the fifth and last place, as regards the entry into force of Paragraph 108(4) and (5) of the 2013 Law on transitional measures, mentioned by the referring court, it should be noted that that court does not explain how those new provisions are relevant for the purposes of resolving the dispute in the main proceedings, nor does it state whether they are applicable at the current stage of the proceedings. For its part, the Hungarian Government has contested the applicability of those provisions in so far as it presupposes, in any event, the existence of a decision to reinstate Grossmania’s rights of usufruct, which has not been taken at this stage.
74In those circumstances, suffice it to state that Paragraph 108(4) and (5) of the 2013 Law on transitional measures must also be compatible, inter alia, with the principle of effectiveness, as recalled in paragraph 51 above, which means that it must not render practically impossible or excessively difficult the exercise of rights conferred by EU law, and with the fundamental freedoms, in particular the free movement of capital provided for in Article 63 TFEU.
75In the light of all the foregoing considerations, the answer to the question referred for a preliminary ruling is that EU law, in particular Article 4(3) TEU and Article 267 TFEU, must be interpreted as meaning that a national court hearing an action against a decision rejecting a request for reinstatement of rights of usufruct which have been extinguished by operation of law and deleted from the land register pursuant to national legislation which is incompatible with Article 63 TFEU, as interpreted by the Court in a preliminary ruling, is required:– to disapply that legislation; and– in the absence of objective and legitimate obstacles, in particular those of a legal nature, to order the competent administrative authority to reinstate the rights of usufruct, even though the deletion of those rights has not been contested before the courts within the legal time limits and has consequently become final in accordance with national law.
Costs
76Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Third Chamber) hereby rules: EU law, in particular Article 4(3) TEU and Article 267 TFEU, must be interpreted as meaning that a national court hearing an action against a decision rejecting a request for reinstatement of rights of usufruct which have been extinguished by operation of law and deleted from the land register pursuant to national legislation which is incompatible with Article 63 TFEU, as interpreted by the Court in a preliminary ruling, is required:– to disapply that legislation; and– in the absence of objective and legitimate obstacles, in particular those of a legal nature, to order the competent administrative authority to reinstate the rights of usufruct, even though the deletion of those rights has not been contested before the courts within the legal time limits and has consequently become final in accordance with national law.
Source: EUR-Lex, © European Union, 1998-2026. Reuse authorised under Decision 2011/833/EU.