UP (formerly Le Chèque Déjeuner) and C.D. Holding Internationale (the “Claimants”), Hungary (the “Respondent”)
Accommodation and food service activities
Bilateral Investment Treaty between France and Hungary (the “BIT”)
Members of the Tribunal
Professor Dr. Karl-Heinz Böckstiegel (President), The Honourable L. Yves Fortier PC CC OQ QC (Claimants’ appointee), and Sir Daniel Bethlehem KCMG QC (Respondent’s appointee)
UP is a cooperative company and C.D. Holding is UP’s wholly-owned subsidiary. In late 1995, Claimants entered the Hungarian market through their wholly-owned subsidiary Le Chèque Déjeuner (“CD Hungary”). CD Hungary was a fringe voucher issuer: it sells vouchers to employers, who grant them to employees as part of their compensation. The employees are entitled to use the vouchers at various affiliates to purchase goods and services. CD Hungary was primarily active in the food voucher business, including both “cold food” vouchers for use at supermarkets and grocery stores, and “hot food” vouchers for use at restaurants. It marginally issued gift vouchers as well as school-supplies vouchers.
In 1999 and 2000, Hungary passed two tax reforms. First, the tax rate applicable to cold food vouchers and gift vouchers was substantially increased, prompting CD Hungary to focus on hot-food vouchers only. Later, the tax rates applicable to hot- and cold-food vouchers were re-aligned, prompting CD Hungary to create a new type of voucher that could be redeemed for both kinds of food.