Kosova Press | 17 July 2025

EU refers Hungary to the highest court

The European Commission said on Thursday that it has referred Hungary to the Court of Justice of the European Union for refusing to comply with a key European Union ruling on investor-state arbitration under the Energy Charter Treaty.

The move follows Hungary’s rejection of the bloc’s interpretation of the 2021 Komstroy ruling, in which the court ruled that the treaty’s arbitration clause does not apply to disputes between an investor from an EU country and another EU member state. The ruling confirmed that such arbitration awards are invalid and cannot be enforced within the European Union.

While twenty-six European Union countries supported a joint statement in June 2024 that complied with the ruling, Hungary issued a unilateral statement claiming that the ruling only applies to future arbitration cases – and only after the treaty is amended. The Commission said in a statement that this contradicts the court’s ruling and the European Union’s legal position.

According to the commission, Hungary violated several European Union treaty obligations, including the duty of sincere cooperation and the principles of supremacy and uniform application of EU law.

The Commission first raised concerns in July 2024 and sent a formal warning this March. After Hungary’s response failed to address the issues, the Commission escalated the case to the Court of Justice of the European Union.

The EU officially withdrew from the Energy Charter Treaty in June 2024, saying it was incompatible with the bloc’s legal order.