At China’s request, Péter Szijjártó encrypted the loan agreement for the Budapest-Belgrade railway
- Bernadett Szél litigated for two years in order to make public the contract for the huge loan package taken out for the construction of the Budapest-Belgrade railway.
- He lost in the first instance, won in the second instance, and then lost the case against the Ministry of Foreign Affairs in the third instance.
- The Ministry of Foreign Affairs first claimed that it encrypted the contract only at the request of the Chinese, but in the third instance, the only argument left was that the opinion of the Chinese must be taken into account.
On April 24, 2020, Minister of Finance Mihály Varga a In a video posted on Facebook showed how he signs the loan agreement covering the construction costs of the Budapest – Belgrade railway line. He said that 85 percent of the money will be provided by a Chinese state bank. By then, it had already been decided that the work would be carried out by one of Lőrinc Mészáros’ interests, together with two Chinese companies. The consortium was named Kínai–Hungarian Vasúti Nonprofit Zrt., with Chinese and Hungarian owners in half.
“It is advantageous and safe,” said Varga about the loan, who emphasized that he agreed with the Chinese on a fixed interest rate and prepayment scheme. He didn’t say the price at the time, but by then Lőrincek Mészáros was one in a stock exchange announcement they wrote that the construction cost would be more than 2 billion dollars, more than HUF 700 billion at the exchange rate of that time. The aim of the investment is for Chinese goods to arrive faster from Greek ports to the interior of Europe.
From the beginning, the opposition disputed whether this investment would ever pay off, but the government side hit the calculation-based criticism in the parliament by saying that István Széchenyi did not even consider whether the Chain Bridge was worth it.
They waited for the law enabling encryption
One day after Varga’s announcement, independent member of parliament Bernadett Szél requested the loan agreement with a data request in the public interest.
As time went on, Parliament passed the Construction Act. This included the fact that if the disclosure of construction-related contracts endangers Hungary’s foreign policy interests, then these data can be encrypted for 10 years. The Minister of Foreign Affairs can decide on the ordering of encryption after considering Hungary’s “foreign policy and foreign economic interests” and “in the process” having also “acquired” the position of the People’s Republic of China.
The law expired on May 28, 2020, i.e. 33 days after Szél’s data request. Normally, the Ministry of Finance should have responded to the representative’s request within 15 days, but due to the epidemic, the state allowed itself to fulfill the requests more slowly at that time. Thus, they could comfortably wait for the possibility of encryption to be born, before they would have been forced to answer. As soon as the law came into effect, the Ministry of Finance informed Szél Bernadette that they were no longer responsible for issuing the contract, but the Minister of Foreign Affairs.
Szijjártó encrypted
Szél then requested the loan agreement from Foreign Minister Péter Szijjártó. Szijjártó decided not to release the contract and not to answer the representative’s question as to what specific Hungarian foreign policy interests would be threatened if he did so. He encrypted the contract for 10 years.
In September 2020, Bernadett Szél sued the Ministry of Foreign Affairs. He asked the court to examine whether there is a real reason for the encryption, whether there really is a foreign policy interest that would be harmed if it were revealed how the state took on such a significant debt.
Court: there is no need to give reasons
On April 1, 2021, the Metropolitan Court of Szél rejected the defendant and ruled that the Ministry of Foreign Affairs had given a sufficient reason for the encryption of the contract, stating that “the Ministry does not have the possibility to fulfill the data request”.
More detailed information would have gone against the law enabling encryption, according to the court’s decision.
In the lawsuit, the Ministry of Foreign Affairs also argued that it was not obliged to give detailed reasons. The lawyers of the ministry emphasized that Szijjártó decided in favor of encryption not at all based on the Chinese’s request. Moreover, as the court judgment states, the Ministry of Foreign Affairs “refused and denied that (…) it only had the contracting partner’s opinion in mind”.
The Ministry of Foreign Affairs said that it had considered Hungary’s foreign policy and foreign economic interests, and based on this – taking into account the position of the Government of the People’s Republic of China – it is not possible to fulfill the public interest data request. This argument will be a liability later.
It is included in the law on the construction of the railway that before ordering the encryption, the foreign ministers must ask for the opinion of the Chinese, but the decision must not be made on this basis. The Szijjártós also argued accordingly in the first instance trial.
Judgment panel: you have to give reasons, the Chinese wish is not enough
Bernadett Szél appealed and won the case at second instance. On October 7, 2021, the Metropolitan Court ordered the Ministry of Foreign Affairs to send the representative the loan agreement.
In this lawsuit, the court asks the Ministry of Foreign Affairs to present evidence of how it would harm Hungarian foreign policy interests by issuing the contract. However, the Ministry of Foreign Affairs came up with only one argument. With the fact that the Chinese do not want to make the contract public. However, the court indicated in its judgment that this is not enough, as the law clearly states that the decision on encryption must be based on Hungarian and not Chinese interests.
The court received the Chinese opinion from the Ministry of Foreign Affairs (this was not shown to Szél and his lawyer), but the judgment shows that this alone is not enough for encryption, and “in addition (…) the defendant’s presentation covering the detailed presentation of facts and arguments was omitted”. .
Even then, if the foreign ministry did not claim that it was classified only because of the Chinese, it was just not willing to go into what the Hungarian interest was behind the decision.
Moreover, in their counterclaim submitted to the second-degree lawsuit, they claimed that only the opinion of the Chinese would matter to them. Thus, for example: “The plaintiff alleges throughout his statement of claim that the defendant ‘only considers the opinion of the contractual partner’, which we firmly reject and intend to refute. (…) [a külügy] the partner made the decision primarily with Hungary’s interests in mind [azaz a kínaiak] his position is also taken into account.”
However, the Minister of Foreign Affairs did not issue the loan agreement to Szél Bernadett despite the second-degree verdict. Rather, he turned to the Court, with a review request, and with that the trial went to the third instance.
Kúria: Still, repeating the Chinese intention is enough of an argument
At that point, the foreign ministry’s argument took a complete turn. In the second instance, they refused and tried to deny that they only had the Chinese point of view in mind when ordering the encryption. But at that time they already justified the need for encryption by saying that the Chinese asked for it, and the Hungarian interest is found in the fact that it does not want the foreign ministry to lose the Chinese’s trust.
The following text has already been sent to the Curia: “Our position in relation to Hungary’s foreign policy interests can be found in the fact that the Chinese side requests that Hungary not make the contract public, the case can obviously lead to a loss of trust between them, and also to a deterioration between the states.”
This argument was accepted by the Court, and in its judgment of June 29, 2022, the second-instance judgment was annulled, while the first-instance judgment was upheld.
According to Sél, this is absurd
The former representative (Szél lost in the 2022 election to the State Secretary of Foreign Affairs, Tamás Menczer) thereby lost the nearly two-year-long litigation. According to Szél, the Court did not take into account in its decision that, according to the law, the opinion of the Chinese should only be asked, but the decision on encryption should not be made by the Minister of Foreign Affairs on the basis of that, since the law obliges him to ask for the partner’s opinion and not to receive it.
The Court also did not accept that, according to the Capital Court, ordering encryption is mandatory, as in the case of decision-making documents, the release of which can only be refused with adequate justification. According to Szél, with this, the Court claims that a clause contained in the Sino-Hungarian treaty is stronger than the Basic Law and the Freedom of Information Act, which he thinks is absurd.
The Ministry of Foreign Affairs has so far brought forward the 2016 Hungarian-Chinese agreement on railway construction, which is the first official document of the entire investment, and one of its points states that “no information generated during the joint work carried out on the basis of this Agreement may be transferred to a third party between the two without the prior written consent of the Competent Body of the Party”. However, according to Szél, this agreement cannot override other domestic laws, as well as the 2020 law on the concrete implementation of the investment, in a much more lenient way, and binds the possible encryption of the concrete contract solely to the decision of the Minister of Foreign Affairs, based on Hungarian foreign affairs interests. The judges of the Court of First Instance, acting at the second instance, also interpreted the situation in the same way.
In the end, Bernadett Szél had to transfer HUF 139,700 to the Ministry of Foreign Affairs, which was organized by Ákos Hadházy Foundation for a Fair and Just Society with the help of community collection.