EU General Court dismisses Hungary's lawsuit against use of frozen Russian asset revenues for Ukraine military aid

Why it matters

The ruling removes a Hungarian legal obstacle to channeling proceeds from frozen Russian sovereign assets into the European Peace Facility for military support to Ukraine. It also confirms that decisions on directing these revenues fall within the EU's Common Foreign and Security Policy, an area largely shielded from judicial review. The case was filed by the previous Orbán government, while the new Hungarian government under Péter Magyar has signaled a policy shift toward supporting Ukraine and recognizing Russia as a threat.

What happened

The EU General Court, the second-highest judicial instance in the EU, dismissed Hungary's lawsuit challenging the use of revenues from frozen Russian Central Bank assets to finance military aid to Ukraine. The court ruled it lacks jurisdiction to hear the case, holding that the disputed decisions fall within the EU's Common Foreign and Security Policy and do not fall under treaty exceptions that would allow judicial intervention.

Hungary had filed the lawsuit in July 2025, and the court accepted it for consideration on 25 August 2025. Hungary sought annulment of the EU Council decision of 21 May 2024, which established rules for directing extraordinary revenues from frozen Russian assets to support Ukraine, as well as a March 2025 decision by the European Peace Facility committee allowing the use of Russian asset revenues to finance military support. Hungary argued that its earlier abstention on creating the relevant mechanism did not constitute consent to subsequent decisions routing those funds through the European Peace Facility without its support, and claimed the European Peace Facility violated EU law by ignoring its veto on the basis that Hungary was not a "contributing member state." The EU countered that Hungary could not block use of the revenues because it had abstained rather than voted against during the creation of the mechanism.

The court did not assess the merits of the legality of the mechanism itself. The lawsuit was filed by the previous Hungarian government led by Viktor Orbán, which had maintained close ties with Moscow and blocked EU support for Kyiv. Following April parliamentary elections, Hungary's new government under Prime Minister Péter Magyar revised the country's foreign policy doctrine, now recognizing Russia as a threat and supporting Ukraine's territorial integrity.

How Ukrainian sources describe it

Ukrainian sources emphasize that the court ruling sides with Ukraine by removing a Hungarian attempt to block the use of Russian asset revenues for military assistance. Coverage highlights the geopolitical context, including the contrast between the previous Orbán government's lawsuit and the new Hungarian government's revised foreign policy stance toward Russia and Ukraine. Articles stress the financial scale of frozen Russian assets and ongoing Western discussions about full confiscation or the Ukraine Loan Cooperation Mechanism, with potential financing of Ukraine of up to €45 billion.

Background

The European Peace Facility was established by the EU Council in 2021 to finance EU actions in the area of Common Foreign and Security Policy. Between 2022 and 2024, the EU mobilized €6.1 billion through the facility for Ukraine's urgent military and defence needs; in 2024, the EU decided to raise the facility's financial ceiling by €5 billion, creating a special Ukraine Assistance Fund and bringing total support allocated through the facility to €11.1 billion. Through the European Peace Facility mechanism, Ukraine has received €3–5 billion per year, with payments made in 2025 and in spring 2026.

Total frozen Bank of Russia assets in the EU and G7 are estimated at more than €200 billion, with the bulk under European jurisdiction and a significant portion held at the Belgian depository Euroclear. Western countries continue to discuss the possibility of full confiscation of Russian assets or their use within the Ukraine Loan Cooperation Mechanism, potentially financing Ukraine up to €45 billion. The previous Orbán government had blocked the allocation of more than €6 billion from the European Peace Facility, despite guarantees that Hungary's contribution would not be used to finance weapons; EU foreign policy chief Kaja Kallas has said discussions on Hungary unblocking a €6.6 billion payment were ongoing.

Following April parliamentary elections, Hungary's new government under Prime Minister Péter Magyar revised the country's foreign policy doctrine, now identifying Russia as a threat and supporting Ukraine's territorial integrity. On 8 September, Hungary expelled ten Russian diplomats over activities deemed "unacceptable" under the Vienna Convention; Moscow condemned the decision.