The investors of Slager Radio submitted an arbitration lawsuit to the International Centre for Settlement of Investment Disputes (ICSID*) in December 2011. According to the owners in 2009 Hungary violated the bilateral investment protection agreements established with the Netherlands, Switzerland and Luxembourg by the implementation of a tender related to national commercial radio broadcasting rights and the relevant decision. The claimant would have claimed damages in the amount of USD 83.3 million (equivalent of approx. HUF 18 billion at the current exchange rate).

In May 2013 Hungary requested the separation of the procedure into jurisdictive and substantive phases. The request was granted by the arbitration court in June last year, and the procedure was suspended on the substantive merits until decision made regarding the Hungarian objection.           

According to the respondent’s claim Slager Radio had no right of preference at the time of the tender based purely on the fact that it had already used the particular frequency (so called incumbent’s preference). Therefore the claimants should not state it either that this alleged right had been expropriated by Hungary if it provided no advantage at the time of the call for proposals and the evaluation of the tenders. Slager Radio had no special personal right which could have been expropriated by Hungary.          

ICSID delivered its ruling on the matter of jurisdiction on 16 April 2014. In the ruling the court granted all the objections of Hungary and rejected all the claims of Slager Radio on grounds of lack of jurisdiction.           

Hungary has been successful in defending its position in investment protection lawsuits on several counts. In the recent years ICSID ruled in favour of Hungary also in the cases submitted by the owners of AES Tisza Erőmű and Dunamenti Erőmű.               

*ICSID (International Centre for Settlement of Investment Disputes), a member of the World Bank Group, is a special international arbitration institution established for the settlement of disputes between the various states and investors. ICSID was established in 1965 by the so called Washington Convention for the sole purpose of ruling in international investment protection cases. In the past two decades, due to the increasing number of investment protection lawsuits initiated directly by the investors, ICSID has become the most significant dispute settlement forum in the field of investment protection. In each contracting state the rulings of ICSID are considered to have the same effect as those of the supreme courts of the particular states.

(Ministry of National Development)