Provisional text
JUDGMENT OF THE COURT (Third Chamber)
13 May 2026 (*)
( Reference for a preliminary ruling – Liability of a Member State in the event of infringement of EU law – Cancellation, by operation of law, of rights of usufruct over properties contrary to Article 63 TFEU and Article 17 of the Charter of Fundamental Rights of the European Union – Restoration of those rights following a judgment of the Court of Justice of the European Union – Compensation for the damage suffered – National rules providing for financial compensation calculated solely on the basis of the market value of those properties at the time of deletion of the rights of usufruct – Requirement of adequate compensation for the damage suffered – Loss of profit )
In Case C‑286/25,
REQUEST for a preliminary ruling under Article 267 TFEU from the Győri Törvényszék (Győr High Court, Hungary), made by decision of 3 April 2025, received at the Court on 15 April 2025, in the proceedings
BRANDL Mezőgazdasági, Kereskedelmi és Szolgáltató Kft.
v
Agrárminisztérium,
THE COURT (Third Chamber),
composed of C. Lycourgos (Rapporteur), President of the Chamber, O. Spineanu-Matei, S. Rodin, N. Piçarra and N. Fenger, Judges,
Advocate General: J. Kokott,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
–        BRANDL Mezőgazdasági, Kereskedelmi és Szolgáltató Kft., by T. Szendrő-Németh, ügyvéd,
–        the Hungarian Government, by M.Z. Fehér and K. Szíjjártó, acting as Agents,
–        the European Commission, by M. Mataija, A. Tokár and G. von Rintelen, acting as Agents,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1        This request for a preliminary ruling concerns the interpretation of Article 63 TFEU and of Article 17 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
2        The request has been made in proceedings between BRANDL Mezőgazdasági, Kereskedelmi és Szolgáltató Kft. (‘Brandl’) and the Agrárminisztérium (Ministry of Agriculture, Hungary) concerning the amount of financial compensation provided for by Hungarian legislation enacted to implement the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432).
Legal context
European Union law
3        Article 63(1) TFEU provides:
‘Within the framework of the provisions set out in this Chapter, all restrictions on the movement of capital between Member States and between Member States and third countries shall be prohibited.’
4        Article 17(1) of the Charter provides:
‘Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.’
Hungarian law
5        On 12 December 2013, the Hungarian legislature adopted the Mező- és erdőgazdasági földek forgalmáról szóló 2013. évi CXXII. törvénnyel összefüggő egyes rendelkezésekről és átmeneti szabályokról szóló 2013. évi CCXII. törvény (Law No CCXII of 2013 laying down various provisions and transitional measures concerning Law No CXXII of 2013 on transactions in agricultural and forestry land; ‘the 2013 Law on Transitional Measures’). That law entered into force on 15 December 2013.
6        Paragraph 108(1) of that law provided:
‘Any right of usufruct or right of user existing on 30 April 2014 and created, for an indefinite period or for a fixed term expiring after 30 April 2014, by a contract between persons who are not close members of the same family shall be extinguished by operation of law on 1 May 2014.’
7        Under the 2021 Law No CL amending certain agricultural laws, which entered into force on 1 January 2022, a chapter 20/F was inserted into the 2013 Law on Transitional Measures. That chapter, which includes inter alia the new Paragraphs108/B, 108/K, 108/L et 108/N, is entitled ‘Specific provisions to implement [the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432)]’.
8        Paragraph 108/B of the 2013 Law on Transitional Measures, as amended by the 2021 Law No CL amending certain agricultural laws (‘the 2013 Law, as amended in 2021’), provides:
‘(1)      Any natural or legal person whose right of usufruct has been deleted from the land register by virtue of the provisions of Paragraph 108(1) hereof in force on 30 April 2014 …, or a successor in title to that person, may apply under this chapter to have the deleted right of usufruct reinstated in the land register and for any compensation to which that person is entitled under this chapter.
(2)      The usufructuary whose right has been deleted may rely on his or her rights as against the State or State bodies in relation to the deletion of the right of usufruct only under the procedures provided for in chapter 20/F of the [2013] Law on Transitional Measures.’
9        Paragraph 108/K of that law provides:
‘(1)      ‘The basis for the compensation consists in the annual value of the deleted right of usufruct. The annual value equates to 1/20 of the market value, at the time of the deletion of the right of usufruct, of the property over which the right of usufruct had previously been created.
…
(4)      Where the right of usufruct is reinstated, the amount of the compensation is calculated by multiplying the annual value by the number of years elapsed between deletion and reinstatement.
…’
10      Paragraph 108/L(2) of that law provides:
‘Where … the applicant files an application in which he or she states that he or she can rely on other rights in addition to the amount determined in accordance with Paragraph 108/K, [the competent authority] may set the amount of compensation at an amount different from that calculated in accordance with Paragraph 108/K, with account being taken of circumstances specific to the relevant case and appropriate justification therefor (additional compensation), in particular in view of the following characteristics of the land:
(a)      profile, shape, size of the plot of land;
(b)      position;
(c)      location;
(d)      accessibility, roads;
(e)      topography and gradient;
(f)      watercourse development;
(g)      engineering structures that hinder crop growth;
(h)      crop conditions;
(i)      higher than usual risk of damage caused by frost, ice and wildlife;
(j)      irrigation, potential for irrigation;
(k)      fences;
(l)      buildings used for agricultural purposes;
(m)      nutrient management, agrochemical treatment;
(n)      environmental pollution and permanent environmental damage;
(o)      nature conservation in the area;
(p)      land improvement.’
11      Paragraph 108/N of that law provides:
‘Interest shall be payable on the amount determined in accordance with Paragraphs 108/K to 108/M, from the date on which the right of usufruct is cancelled until the date of payment. The interest rate shall be equal to the central bank’s base rate plus two percentage points. For the purposes of calculating interest, the interest rate in force on the first day of the relevant calendar half-year shall apply throughout that half-year.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
12      Brandl is the usufructuary of agricultural land in Hungary, registered in the Hungarian land register under numbers 0159/3 and 0160.
13      Under Paragraph 108(1) of the 2013 Law on Transitional Measures, those rights of usufruct have been extinguished by operation of law. They were deleted from the land register on 2 October 2014.
14      After holding, in the judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157, paragraphs 62 to 66, 94, 107 and 126), that Article 63 TFEU precluded a provision such as Paragraph 108(1) of the 2013 Law on Transitional Measures, the Court clarified, in its judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432, paragraph 129), that the latter provision also infringed the right to property guaranteed by Article 17 of the Charter.
15      Following that judgment, the Hungarian legislature amended the 2013 Law on Transitional Measures in order to permit, under certain conditions, the reinstatement of rights of usufruct in the land register that had been deleted pursuant to Paragraph 108(1) of that law and for compensation to be paid to the holders of those rights.
16      Under Paragraph 108/B(1) of the 2013 Law on Transitional Measures, as amended in 2021, Brandl applied for and obtained reinstatement of its rights of usufruct in the land register.
17      By way of compensation for the financial loss arising from the deletion of those rights, the Nemzeti Földügyi Központ (National Land Centre, Hungary), which is, in the area, the legal predecessor of the Ministry of Agriculture, awarded Brandl compensation in the amounts of 10 940 000 forint (HUF) (approximately EUR 31 000) and HUF 30 810 000 (approximately EUR 87 000) for the properties registered in the land register under numbers 0159/3 and 0160 respectively. Under Paragraph 108/K of the 2013 Law on Transitional Measures, as amended in 2021, those amounts correspond, according to the calculations of the National Land Centre, to 1/20 of the market value of those properties as at 2 October 2014, multiplied by the number of years elapsed between the deletion and reinstatement of the rights of usufruct.
18      Taking the view that that compensation does not amount to adequate compensation for the damage suffered by it due to the unlawful deprivation of its rights of usufruct, Brandl brought an action before the Győri Törvényszék (Győr High Court, Hungary), which is the referring court. In support of that action, Brandl argues that the compensation must take account of the loss of profit.
19      In that regard, Brandl states that, before its rights of usufruct were deleted, it operated the plots of land in question and that, following that deletion, those plots of land were leased out. The rent amounts stipulated in those contracts are relevant for the calculation of the loss of profit.
20      According to the Győri Törvényszék (Győr High Court), all of the pecuniary damage suffered by the usufructuary due to the unlawful deletion thereof must be compensated. Loss of profit must accordingly be taken into account. Paragraph 108/K of the 2013 Law on Transitional Measures, as amended in 2021, which is based on the market value of the properties in question at the time the usufruct rights are deleted, does not ensure the award of fair compensation. In particular, that provision does not take account of the fact that, over the course of the years that have lapsed between the deletion and the reinstatement of those rights, the market value of those properties may have changed significantly. In the present case, a court-appointed expert witness calculated that, taking into account the increase in market value over the course of those years and, for the remainder, applying the criterion laid down in that provision, the amount of compensation totalled HUF 16 596 000 (approximately EUR 47 000) for the property bearing number 0159/3 and HUF 49 341 500 (approximately EUR 140 000) for the property bearing number 0160.
21      In those circumstances, the Győri Törvényszék (Győr High Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)      Must Article 63
[TFEU] and Article 17 of the [Charter] be interpreted as meaning that the legislation of a Member State which, following the restoration of a right of usufruct over a plot of agricultural land, which was previously cancelled contrary to EU law, awards the usufructuary financial compensation that does not take into consideration the significant increase in the market value of the properties in respect of which the right of usufruct was cancelled, in the years for which the right was cancelled, is consistent with those articles?
(2)      Does the legislation of a Member State which, following the restoration of a right of usufruct over a plot of agricultural land, which was previously cancelled contrary to EU law, awards the usufructuary financial compensation that does not take into consideration the significant increase in the market value of the properties in respect of which the right of usufruct was cancelled, in the years for which the right was cancelled, satisfy the concept of fair compensation contained in Article 17 of the [Charter] and in the judgment given in [Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432, paragraph 129)]?’
Consideration of the questions referred
Admissibility
22      In its observations lodged with the Court, the European Commission emphasises that the only cross-border element mentioned in the request for a preliminary ruling relates to the fact that the manager of Brandl, which is a company governed by Hungarian law,
is a national of a Member State other than Hungary.
The Commission argues that, in those circumstances, the admissibility of the request for a preliminary ruling is questionable.
23      It is true that the provisions of the FEU Treaty on the freedom of establishment, the freedom to provide services and the free movement of capital do not apply to a situation which is confined in all respects within a single Member State (judgment of 15 November 2016, Ullens de Schooten, C‑268/15, EU:C:2016:874, paragraph 47, and order of 27 January 2026, OMW Petrom Marketing, C‑439/25, EU:C:2026:82, paragraph 36).
24      Moreover, the scope of the Charter, in so far as the action of the Member States is concerned, is defined in Article 51(1) thereof, according to which the provisions of the Charter are addressed to the Member States only when they are implementing EU law. That provision confirms the Court’s case-law, which states that the fundamental rights guaranteed in the legal order of the European Union are applicable in all situations governed by EU law, but not outside such situations. Where, on the other hand, a legal situation does not come within the scope of EU law, the Court does not have jurisdiction to rule on it and any provisions of the Charter relied upon cannot, of themselves, form the basis for such jurisdiction (judgment of 12 September 2024, Changu, C‑352/23, EU:C:2024:748, paragraph 63 and the case-law cited).
25      In the present case, the possibility cannot be ruled out that the dispute in the main proceedings, the resolution of which, according to the referring court, requires an interpretation of Article 63 TFEU and, in that context, of Article 17 of the Charter, is a situation which is confined in all respects within a single Member State, as referred to in paragraph 23 of the present judgment. In the absence of anything in the request for a preliminary ruling to suggest that the manager of Brandl holds a financial stake in the capital of that company, there is nothing in the request establishing with certainty that the dispute in the main proceedings is cross-border in nature.
26      However, even if the main proceedings are confined in all respects within Hungary, that does not automatically mean that the request is inadmissible.
27      In that regard, it should be borne in mind that the interpretation of the fundamental freedoms provided for in Article 49, 56 or 63 TFEU may prove to be relevant in a case confined in all respects within a single Member State inter alia where national law requires the referring court to grant the same rights to a national of its own Member State as those which a national of another Member State in the same situation would derive from EU law (see judgments of 5 December 2000, Guimont, C‑448/98, EU:C:2000:663, paragraph 23, and of 15 November 2016, Ullens de Schooten, C‑268/15, EU:C:2016:874, paragraph 52).
28      It is apparent from the order for reference that the compensation scheme introduced by the 2013 Law on Transitional Measures, as amended in 2021, applies, under Paragraph 108/B thereof, in respect of ‘any natural or legal person’, irrespective of his or her nationality, ‘whose right of usufruct has been deleted from the land register by virtue of the provisions of Paragraph 108(1) [of the 2013 Law on Transitional Measures]’. It is also apparent from that request that the National Land Centre and the Ministry of Agriculture have recognised that Brandl must be awarded compensation, as provided for by the 2013 Law on Transitional Measures, as amended in 2021, with a view to implementing the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432) which, in their view, will ensure adequate compensation for the damage suffered.
29      In view of the specific information contained in the request for a preliminary ruling, it seems that the principles of EU law relating to compensation for damage caused by a Member State’s infringement of EU law, in this case Article 63 TFEU and Article 17 of the Charter, highlighted in the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), are relevant for resolving the dispute in the main proceedings, irrespective of whether the manager of Brandl, who is a national of a Member State other than Hungary, holds a financial stake in the capital of that company. In those circumstances, the case-law referred to in paragraph 27 of the present judgment is relevant and the questions referred enjoy the benefit of the presumption of relevance, with the result that they are admissible.
30      It follows from the foregoing that the questions referred for a preliminary ruling are admissible.
Substance
31      By its judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), the Court held that the cancellation, by operation of law, of rights of usufruct, effected by the 2013 Law on Transitional Measures, was incompatible with Article 63 TFEU and Article 17 of the Charter. The incompatibility of those rules with the free movement of capital had already been established by the Court in its judgment of 6 March 2018, SEGRO and Horváth (C‑52/16 and C‑113/16, EU:C:2018:157).
32      In that context, the present request for a preliminary ruling is aimed at determining whether a compensation scheme, such as that provided for by the 2013 Law on Transitional Measures, as amended in 2021, ensures adequate compensation for damage arising as a result of that cancellation by operation of law.
33      The Court accordingly finds that, by its questions, the referring courts asks, in essence, whether EU law must be interpreted as precluding national rules providing for compensation for damage suffered by the usufructuary over properties, following cancellation, by operation of law, of those rights which is incompatible with Article 63 TFEU and Article 17 of the Charter, by means of financial compensation calculated solely on the basis of the market value of those properties at the time when those rights were deleted from the land register.
34      According to settled case-law, individuals who have been harmed by an infringement of EU law attributable to a Member State have a right to compensation where three conditions are met: the rule of EU law infringed must be intended to confer rights on them; the infringement of that rule must be sufficiently serious; and there must be a direct causal link between that infringement and the loss or damage sustained by those individuals (see judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 51, and of 1 August 2025, Minister for Children, Equality, Disability, Integration and Youth and Others, C‑97/24, EU:C:2025:594, paragraph 27).
35      In a situation such as that intended by the compensation scheme provided for in the 2013 Law on Transitional Measures, as amended in 2021, those conditions are met. The Court has held previously that Article 63 TFEU and Article 17 of the Charter constitute rules of law intended to confer rights on individuals and that infringement of those provisions, established in the infringement proceedings and following from the judgment in preliminary ruling proceedings referred to in paragraph 31 of the present judgment, may be found to be sufficiently serious (see, to that effect, judgment of 10 March 2022, Grossmania, C‑177/20, EU:C:2022:175, paragraphs 70 and 71). Moreover, the existence of a causal link between that infringement and the damage suffered by those persons whose rights of usufruct were deleted is not disputed before the referring court, since certain provisions of the 2013 Law on Transitional Measures, as amended in 2021, are aimed precisely at compensating the damage suffered due to that infringement, established by the Court.
36      Since those conditions are met, EU law requires that the damage caused to the individuals concerned must be commensurate with the damage suffered, so as to ensure effective protection of their rights (see judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 82, and of 25 March 2021, Balgarska Narodna Banka, C‑501/18, EU:C:2021:249, paragraph 125).
37      It is for the domestic legal system of each Member State to set the criteria for determining the extent of compensation, but those criteria cannot be less favourable than those applying to similar claims or actions based on domestic law and must in any event not be such as in practice to make it impossible or excessively difficult to obtain redress (see judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 90, and of 17 April 2007, AGM-COS.MET, C‑470/03, EU:C:2007:213, paragraph 94).
38      Whilst allowing the Member States broad discretion, the Court has clarified that total exclusion of loss of profit as a head of damage for which compensation may be awarded in the case of a breach of EU law cannot be accepted since, especially in the context of economic or commercial litigation, such a total exclusion of loss of profit is liable to make it impossible in practice for damage to be compensated (judgments of 5 March 1996, Brasserie du pêcheur and Factortame, C‑46/93 and C‑48/93, EU:C:1996:79, paragraph 87, and of 17 April 2007, AGM-COS.MET, C‑470/03, EU:C:2007:213, paragraph 95).
39      In the case of a cancellation,
by operation of law, of rights of usufruct over agricultural land, such as that referred to in Paragraph 108(1) of the 2013 Law on Transitional Measures, followed by reinstatement of those rights, the Court finds, subject to verification by the referring court, that the loss of profit comprises operating or leasing income from those lands which the usufructuary whose right has been deleted was unable to collect during the period between that cancellation and that reinstatement.
40      Although, in a situation such as that present in Hungary following the judgment of 21 May 2019, Commission v Hungary (Usufruct over agricultural land) (C‑235/17, EU:C:2019:432), it is possible, for the purposes of compensating the damage suffered by the interested parties
due to the infringement of EU law found by the Court, to establish a standard calculation formula for determining, in each individual case, the amount of compensation owing, the fact remains that the principle of effectiveness, the substance of which is referred to in paragraphs 37 and 38 of the present judgment, requires that such a formula be designed in such a way as to arrive at a compensation amount that covers, with sufficient accuracy, that loss of profit.
41      Yet as is apparent from the order for reference, the compensation scheme provided for in Paragraph 108/K of the 2013 Law on Transitional Measures, as amended in 2021, is based, for the determination of the amount of compensation, on the market value of the agricultural land in question at the time of the unlawful deletion of the rights of usufruct.
42      As concurred in by the interested parties who lodged observations with the Court, that value corresponds to the sale price the owner of those lands could obtain depending on the interplay of supply and demand at the time of that deletion.
43      The criterion laid down thusly in Paragraph108/K of the 2013 Law on Transitional Measures, as amended in 2021, to calculate the amount of compensation does not per se enable a calculation to be made of the loss of profit of the usufructuary whose right has been deleted. The income that usufructuary might have been able to receive during the period between the cancellation of the rights of usufruct and the reinstatement thereof, by operating or leasing the agricultural land in question, are not directly affected by the price the owner of those lands could obtain by selling them at the time of deletion of the rights of usufruct.
44      Although, in a situation such as that at issue in the main proceedings, where the loss of profit constitutes the entirety or, at the very least, the largest portion of the damage suffered by the usufructuary, such a compensation scheme may nevertheless, in practice, give rise to a compensation amount that covers, to a certain extent, the amount of loss of profit, the fact remains, subject to verification by the referring court, that the criterion on which that scheme is based does not lead to an adequate assessment of that loss of profit and, consequently, of that damage.
45      As a result, a compensation scheme such as that provided for in Paragraph 108/K of the 2013 Law on Transitional Measures, as amended in 2021, makes it excessively difficult in practice to obtain compensation for the damage suffered and is accordingly incompatible with the requirement of adequate compensation for the damage suffered, referred to in paragraphs 36 to 38 of the present judgment.
46      That conclusion is not affected by the fact, emphasised by the Hungarian Government, that Paragraph 108/L of the 2013 Law on Transitional Measures, as amended in 2021, allows injured parties to apply for the grant of additional compensation on grounds of certain characteristics of the properties in question. Although those characteristics are relevant for assessing the loss of profit, the fact remains, subject to verification by the referring court, that Paragraph 108/K of that law does not oblige the competent authority to take account of those characteristics to fix the amount of the compensation and thereby grant the injured party more extensive compensation than that arising from Paragraph 108/K of the same law.
47      Nor is the conclusion set out in paragraph 45 of the present judgment affected by the fact that Paragraph 108/N of the 2013 Law on Transitional Measures, as amended in 2021, provides for the payment of interest to compensate for the lapse of time between the cancellation of the rights of usufruct and the payment of the compensation. Such a provision in fact is aimed principally at compensating for depreciation in monetary value but has neither the object nor effect of ensuring effective compensation for the loss of profit.
48      In the present case, without prejudice to the discretion of the Member State concerned to devise a calculation formula giving rise to adequate compensation for the damage, the Court notes, as regards the assessment of the damage that the referring court must carry out in the main proceedings, that it is apparent from the figures provided by that court that, in applying a compensation mechanism that takes account of the market value of the agricultural land concerned, it may prove to be excessively difficult to arrive at adequate compensation for the damage when no account is taken of a potentially significant increase in the value that occurred during the period between the calculation of the rights of usufruct and the reinstatement thereof.
49      In the light of the foregoing, the answer to the questions referred is that EU law must be interpreted as precluding national rules providing for compensation for damage suffered by the usufructuary over properties, following a cancellation, by operation of law, of those rights which is incompatible with Article 63 TFEU and Article 17 of the Charter, by means of financial compensation calculated solely on the basis of the market value of those properties at the time when those rights were deleted from the land register.
Costs
50      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (Third Chamber) hereby rules:
European Union law must be interpreted as precluding national rules providing for compensation for damage suffered by the usufructuary over properties, following a cancellation, by operation of law, of those rights which is incompatible with Article 63 TFEU and Article 17 of the Charter of Fundamental Rights of the European Union, by means of financial compensation calculated solely on the basis of the market value of those properties at the time when those rights were deleted from the land register.
[Signatures]
*      Language of the case: Hungarian.