Today, the European Commission decides to refer Hungary ( INFR(2025)2204 ) to the Court of Justice European Union for failing to prevent violations of the prohibition on intra-EU investor-State arbitration, as established by the case-law of the Court of Justice of the European Union. In its judgment in Case C-741/19 , ("the Komstroy judgment"), the Court of Justice held that Articles 267 and 344 TFEU prevent an international agreement, such as Article 26 of the Energy Charter Treaty , from allowing an investor from one Member State to bring a dispute concerning investments in another Member State before an arbitral tribunal whose jurisdiction that Member State has agreed to accept. According to settled case-law of the Court of Justice of the European Union, its judgments apply retroactively and the liability of a Member State under Article 258 TFEU can be extended to: (I) acts of private law entities under its supervision or effective control or function ;(II) the bodies to which it assigns a task in the public interest or specific privileges; and (III) any entity whose action reflects or implements the policy of the State.
The Commission considers that the Hungarian State effectively controls MÓL and, consequently, its subsidiaries, even if the companies concerned are private entities. MÓL and its subsidiaries behaviour is therefore imputable to the Hungarian State. Hungary has, in fact, allowed State-controlled companies to circumvent obligations under EU law, including on investor-to-Member State arbitration. MOL breached the prohibition of intra-EU investor State arbitration. Firstly, MOL brought an investor-State arbitration case on the basis of Article 26 of the Energy Charter Treaty against another Member State; secondly, once having obtained an award against the other Member State in violation of EU law, it has in addition requested a third-country court to recognise and enforce that intra-EU investor-State arbitral award issued in its favour. EU law obliges MOL not to enforce the award, because of its contrariety to EU law.
The Commission sent a letter of formal notice to Hungary in December 2025 , and the Reasoned opinion in April 2026 . As the Commission considers that Hungary is still in breach of EU rules, it has decided to refer the cases to the Court of Justice of the European Union.
