Közbeszerzési Hatóság

Complaints and remedies

The legislator established the Public Procurement Arbitration Board (Arbitration Board), a body with special legal standing, to decide legal disputes in relation to public procurement procedures. The Arbitration Board is an independent body with jurisdiction in Hungary and is empowered to conduct proceedings initiated against any infringement of the legislative provisions applicable to public procurement procedures.

The Arbitration Board consists of public procurement commissioners, their number is determined by the Council, and a Chairperson, both appointed and recalled by the Council.

Public procurement commissioners:

  • shall be independent in the decision-making process,
  • their decisions shall be taken according to the relevant legislation and shall reflect their conviction,
  • shall not be influenced nor given instructions in making their decisions. 

The procedure of the Arbitration Board is similar to civil court proceedings and the legal dispute of the parties is decided by the Arbitration Board in an adversarial procedure. Unless otherwise specified by the Public Procurement Act (hereinafter: PPA) or by the government decree based on the empowerment of the PPA, the provisions of the currently effective Act CL of 2016 on General Public Administration Procedures shall apply for the procedure of the Arbitration Board. 

The Public Procurement Arbitration Board shall proceed upon application submitted by those entitled to do so or ex officio – upon the initiation of bodies and persons specified by the law. The goal of the review procedure is to tackle public procurement related infringements quickly and efficiently. Administrative litigation may be launched against the substantial decision of the Arbitration Board, organisations or persons listed in Article 152 of the PPA, who are entitled to initiate the ex officio proceeding of the Arbitration Board, may also launch such trial. The justification to launch administrative litigation may be not only the infringement of the Public Procurement Arbitration Board, but also the circumstance that in the opinion of the applicant, the Arbitration Board failed to appropriately evaluate, classify the earlier procedure, decision of the defendant considering the rules of the PPA. The Metropolitan Court of Budapest has jurisdiction and exclusive competence in the judicial review of the Arbitration Board’s decisions.

The decisions of the Arbitration Board may be the following:

  • unfounded applications are dismissed,
  • in procedures launched or conducted ex officio, states the lack of infringement,
  • states that infringement occurred,
  • states that infringement occurred and applies the legal consequences,
  • besides stating that infringement occurred, imposes fine in certain cases,
  • states that infringement occurred and prohibits the tenderer, the subcontractor or any other entity or person who or which participated in the procurement procedure from participating in the procurement procedure,
  • upon infringements specified in the Public Procurement Act, declares the contract null and void ex officio or that the contract concerned is not void upon the existence of the requirements sets,
  • upon infringements specified in the Public Procurement Act, decides whether upon nullity, the original state can be restored by applying the legal consequences of the annulled contract.

 

In the framework of sanctioning infringement, the national public procurement regulation allows for imposing fines on the infringer (person or organisation), furthermore, on the persons and organisations responsible for the infringement having a legal relationship with the infringer. The Arbitration Board deicides at its own discretion whether it is justified and the conditions are met to impose fines on persons or organisations responsible for the infringement, in addition to the organisation, person committing the infringement.

There is no legal opportunity to appeal against the decision of the Arbitration Board in the framework of a public administration procedure; according to law, only court review is possible.