Key facts of the case:
The Technical University of Ostrava (Technická univerzita v Ostravě) was running a project that was co-financed by the EU Operational Programme Research and Development for Innovations. The Ministry of Education, Youth and Sport (Ministerstvo školství, mládeže a tělovýchovy) decided to stop the funding as it claimed that the Technical University of Ostrava broke financial rules. The Technical University of Ostrava appealed to the Municipal Court in Prague to review the decision of the Ministry. The Municipal Court in Prague came to a conclusion that according to paragraph 14e of Act No. 218/2000 Coll. on Budgetary Rules (Zákon o rozpočtových pravidlech) this question must not be judged by a court and refused to decide. The Technical University of Ostrava filed a cassational complaint to the Supreme Administrative Court. The Supreme Administrative Court ruled that this question should be decided by the Constitutional Court.
The Constitutional Court argued that the fact that a decision is not reviewable by a court is not compatible with Article 36 of the Charter of Fundamental Rights and Basic Freedoms (the right to a fair trial), with the general principles of EU law (the need for a judicial review of any decision of national authority) and probably with the Charter.
Outcome of the case:
The Constitutional Court decided that every decision must be reviewable by court and it accordingly amended the national law, Act No. 218/2000 Coll. on Budgetary Rules.
56. When assessing the issue of the judicial review of the provision of subsidies, which often come from the EU budget, it is necessary to take into account EU law. The rules for the allocation of subsidies are laid out in the following legislation: Council Regulation No. 1083/2006 of 11 July 2006, which lays down the general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund; EU Parliament and Council Regulation No. 1080/2006 of 5 July 2006 on the EU Fund for Regional Development; and Commission Regulation No. 1828/2006, which sets out the rules for implementation. The CJEU has already ruled that Council Regulation No. 1083/2006, interpreted together with Article 47 of the Charter guaranteeing the right to a fair trial, prevents any decision rejecting an application for a subsidy from being exempt from review before the court of a Member State (Court of Justice of the European Union, C-562/12, Liivimaa Lihaveis MTÜ vs. Eesti-Läti programmi 2007–2013 Seirekomitee, 17 September 2014). According to the CJEU judicature Member States have the duty to guarantee the judicial review of acts of granting a subsidy. The CJEU notes that the principle of judicial review of any decision of any Member State’s authority is a general principal of EU law.
60. The Constitutional Court is not competent to judge the content of EU law, but from the summary above it is clear that introducing a judicial review in this case is not in contradiction with EU law; on the contrary, the absence of it would probably be in collision with the case law of CJEU or the Charter. The conclusions of the Constitutional Court that the absence of a judicial review in this case is unconstitutional are not inconsistent with EU law. The examined legal provisions could be judged as problematic from the perspective of EU law. However, the Constitutional Court is convinced that the plaintiff made a good decision when it submitted the case to the Constitutional Court because it is meaningless to make courts initiate proceedings before CJEU, if national proceedings to check the constitutionality are sufficient. According to CJEU, the priority assessment of constitutionality is not in conflict with EU law if it does not prevent courts from addressing CJEU with a preliminary question, from adopting preliminary actions to protect rights, or from not using contradictory provisions of national law.