HUN-2001-1-004

a) Hungary / b) Constitutional Court / c)  / d) 12-04-2001 / e) 10/2001 / f)  / g) Magyar Közlöny (Official Gazette), 2001/43 / h) .

Keywords of the Systematic Thesaurus:

03.25

General Principles - Market economy.

05.02

Fundamental Rights - Equality.

05.03.39.03

Fundamental Rights - Civil and political rights - Right to property - Other limitations.

Keywords of the alphabetical index:

Economy, state regulation / Stakeholder, discrimination.

Headnotes:

The law, which obliged agricultural cooperatives to convert members' assets into shares and buy assets from non-active members, violated the right to own property as it obliged cooperatives to pay the nominal value for business stakes regardless of their market value. In addition, the law discriminated against certain groups of stakeholders and farm cooperatives.

Summary:

The Act on Business Stakes in Agricultural Cooperatives adopted in December 2000 was designed to regulate reimbursement of those holding stakes in agricultural cooperatives originally set up under the previous economic system, should those owners wish to sell. The legislation was considered necessary because many individuals with inheritable stakes had no active involvement in the operations of the farming cooperatives.

In the opinion of the Court, the Act violated the principles of private property, as it required cooperatives to buy a stake if so requested by a holder of that stake, while fixing the price the cooperatives had to pay at the stake's face value. In addition, the legislation discriminated amongst different groups of stakeholders and farm cooperatives, depending on, for example, whether or not the holders were actually working in the cooperative.

The Court also held that the aim of the legislation, i.e. to buy assets from non-active members was not unconstitutional in itself. Therefore parliament can purchase from the central budget stakes from stakeholders who want to sell their stakes, so that the agricultural cooperatives are not heavily burdened by compensation and can maintain normal operations.

Languages:

Hungarian.