Important final decision in a case concerning unlawfully withdrawn EU funding
2025.12.02.
The Budapest Court of Appeal overturned the first-instance judgment in favor of our client in a case concerning an EU tender. The significance of the decision is that the court clarified that a mere change in technical parameters (in this case, the location of the project) does not make the subsidy recoverable if the tender has otherwise been implemented.
Several years ago, our client successfully implemented an EU-funded investment in a town in Borsod County, which was fully inspected and approved by the funding authority on site and in accordance with the documentation. Nevertheless, due to an administrative deficiency, the authority subsequently terminated the grant agreement in 2023 and ordered our client to repay more than HUF 100 million, arguing that the project had not been implemented at the correct location.
As a result of the termination, the beneficiary was unlawfully obliged to repay more than HUF 100 million in support and interest. The court of second instance has now ruled that the termination by the state was unlawful and that the support should not have been reclaimed.
The Court of Appeal emphasized that:
- The project was implemented at a single location, even though the property was linked to several cadastral numbers – it is a single economic and physical area, so it cannot be considered a deviation from the subsidy agreement.
- The state did not prove that the location was unsuitable for the implementation of the project.
- Based on the above, none of the reasons for withdrawal were justified, so the subsidy agreement did not terminate and the withdrawal was not legally effective.
- Since our client fulfilled all the conditions, the court ruled that the subsidy was lawful, and therefore the state was obliged to repay the more than HUF 100 million collected without legal basis, as well as the legal costs.
This ruling sends an important message:
- Subsidized businesses cannot be held liable solely on the basis of administrative details if the project was implemented in a genuine and verifiable manner.
- Irregularities must be examined by the court in the context of assessing the legality and severity of the withdrawal.
We thank our client for their trust and are proud to have successfully represented their interests.
JÁMBOR TÓTH KOLLÁTH Law Firm
— strategic legal protection for businesses
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