European Court of Human Rights

Information Note on the Court’s case-law No. 181

January 2015

Vékony v. Hungary - 65681/13

Judgment 13.1.2015 [Section II] See: [2015] ECHR 5

Article 1 of Protocol No. 1

Article 1 para. 2 of Protocol No. 1

Control of the use of property

Statutory removal and non-renewal of tobacco licence without compensation: violation

Facts - Since 1994 the applicant’s family had operated a grocery store where they sold tobacco products subject to excise tax. Following a legislative change in 2012, tobacco retail became a State monopoly and tobacco retailers had to be licensed through a concession tender. As a consequence the applicant lost his tobacco retail licence. He was unable to obtain a new licence under the new rules.

Law - Article 1 of Protocol No. 1: The statutory cancellation and non-renewal of the applicant’s licence to sell tobacco constituted a measure of control of the use of property amounting to an interference with his rights under Article 1 of Protocol No. 1.

The loss of the licence had drastic effects on the applicant’s business as it reduced turnover by a third and the business eventually had to be wound up. The transitional periods between the enactment of the impugned law and the deadline for terminating the tobacco retail were insufficient. Furthermore, it was implicit in Article 1 of Protocol No. 1 that any interference with the peaceful enjoyment of possessions had to be accompanied by procedural guarantees affording those concerned a reasonable opportunity to present their case to the authorities and to effectively challenge the measures. A disproportionate and arbitrary control measure could not satisfy the requirements of protection of possession under Article 1 of Protocol No. 1.

The Court found that an excessive individual burden had been imposed on the applicant. In reaching that conclusion it noted that the applicant’s licence had been extinguished without compensation, the measure had been introduced through constant changes to the law and with remarkable hastiness, the loss of the old licence had been automatic, there had been no public scrutiny of the refusal to grant a new licence and no legal remedy available, and the applicant had had no realistic prospect of remaining in possession because the process of granting of new concessions was arbitrary and gave no precedence to previous licence-holders. Finally, it had not been suggested that the applicant had been in breach of the law.

Conclusion: violation (unanimously).

Article 41: EUR 15,000 in respect of pecuniary and non-pecuniary damage.

 

© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.

Click here for the Case-Law Information Notes