The 84 million dollar case against Hungary

• Hungary will have to pay Canadian investors 76.2 million dollars in compensation, plus $7.6m in legal expenses, after an international court ruled last week that the state had violated investor rights at Budapest’s Ferihegy Airport at the beginning of 2002.

This, according to a ruling last week by the International Chamber for the Settlement of Investment Disputes, the arbitration branch of the World Bank, a copy of which has been obtained by The Budapest Sun. The Airport Development Corporation of Canada (ADC) won the tender to build Ferihegy Terminal IIB in 1994. In return for completing the project, ADC, in partnership with the state, was to operate the airport for 12 years after the terminal hand-over in 1998.

However, in late 2001, the then Fidesz-led government decreed that Ferihegy was to be operated by a new company, and ADC was ejected from its premises on Jan 2, 2002. ADC, after first seeking an out-of-court solution, sued Hungary for seizure of assets without compensation. -- Finance Minister János Veres, speaking of the verdict on Wednesday, Oct 5, said that the budget had reserves set aside for the ADC case and another lawsuit. “Both cases are included in the budget; there is no reason to modify the 2006 deficit target,” Veres told a news conference. He noted that the compensation was the result of a decision by the earlier Fidesz government which “to put it mildly, was not very investor-friendly,” news agency MTI reported.

The Hungarian state assumed all historical liabilities regarding the transaction when it sold 75% of the airport operating rights to the UK’s BAA late last year for Ft464.5bn ($2.19bn) in the country’s biggest single privatization deal to date. /more/

Yes, "Democracy is difficult...."