The EU General Court has dismissed Hungary’s legal challenge against a decision to use extraordinary revenues from frozen Russian state assets to support Ukraine’s armed forces. However, the court did not rule that Hungary’s legal arguments were unfounded: it said it had no jurisdiction to review the political and strategic decision at issue.
Court rejects Hungary’s challenge
Hungary has lost another legal battle against the European Union after the EU General Court dismissed a case brought by the Hungarian government against a decision concerning military support for Ukraine, HVG reported.
The case, originally launched under Viktor Orbán’s government, centred on a decision by the committee of the European Peace Facility (EPF) to allocate extraordinary revenues generated by frozen Russian state assets to support the Ukrainian armed forces.
Importantly, the court did not dismiss Hungary’s case because it found the country’s legal arguments to be without merit. Instead, it concluded that the EU courts generally do not have jurisdiction to review the legality of political or strategic decisions adopted within the EU’s Common Foreign and Security Policy (CFSP) in circumstances such as this one.
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What is the European Peace Facility?
The European Peace Facility was established by the EU Council in 2021 to finance the bloc’s foreign and security policy actions. In May 2024, the Council adopted two decisions concerning extraordinary revenues generated by immobilised Russian state assets.
The first established rules for using the revenues to support Ukraine, while the second concerned the actual allocation of the funds. Hungary supported the first decision but constructively abstained from the second.
Under the EU’s system of constructive abstention, a member state can refrain from supporting a decision without blocking its adoption, while making clear that it does not consider itself bound to implement it.
On 21 June 2024, the EPF committee subsequently decided, through a written procedure, to allocate the first tranche of extraordinary revenues from the frozen Russian assets to support the Ukrainian armed forces.
The committee took the view that Hungary, having constructively abstained from the earlier decision, could not participate in the vote on the allocation. Budapest challenged this position before the EU General Court.
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Hungary argued that EU rules had been breached
The Hungarian government argued that the EPF committee had acted unlawfully, including by allegedly violating the applicable voting rules. Hungary also claimed that fundamental EU principles had been breached, including the rule of law, equality between member states and the democratic functioning of the European Union.
The court, however, did not examine these arguments on their merits. The judges acknowledged that the European Peace Facility has legal personality, meaning that a challenge to a decision adopted by its committee could, in principle, fall within the General Court’s jurisdiction. The court nevertheless reached a different conclusion when considering the substance of the dispute.
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Why the court said it could not rule on the decision
The General Court pointed out that EU courts generally have limited jurisdiction over the CFSP. Although the EU treaties provide for certain exceptions, the court concluded that Hungary’s case did not fall within any of them. According to the ruling, the EPF committee’s decision was directly linked to political and strategic decisions taken as part of the EU’s foreign and security policy.
The contested decision determined that revenues generated by frozen Russian assets would be used to finance military equipment for Ukraine’s armed forces. It also identified the specific assistance measure for which the money would be used.
Because of this direct connection to CFSP political and strategic decisions, the General Court concluded that it was not empowered to assess whether the decision complied with EU law.
Hungary can appeal
The ruling does not necessarily mark the end of the legal dispute. Hungary can appeal the General Court’s decision to the Court of Justice of the European Union within two months and ten days of the judgment being notified.
However, any appeal would be limited to points of law, rather than allowing the entire case to be reheard on its facts. The case comes amid continued disputes between Budapest and Brussels over Hungary’s position on support for Ukraine, the use of frozen Russian assets and the EU’s response to Russia’s war against Ukraine.
