HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
2.5.3 Placement of Insurance Outside of Jurisdiction Reinsurance can be placed outside of Hungarian juris - diction. 2.5.4 Enforceability of “Cut-Through” Clauses Enforceability of “cut-through” clauses should be ana - lysed based on the governing law of such documents. Cut-through clauses are generally enforced by Hun - garian courts. 2.5.5 Assignment of Insurance/Reinsurance Assignments of insurance/reinsurance is permitted. 2.6 Lease Enforcement 2.6.1 Restrictions on Lessors’ Abilities If the lessee is subject to bankruptcy procedures, a moratorium will prevent creditors (including the lessor) from terminating their contracts as a result of non- payment. While the lessor may be entitled to terminate the lease on the basis of other termination events, there is a risk that such termination would be rechar - acterised by the bankruptcy trustee as termination for non-payment. The right to terminate on the grounds of non-payment is suspended for the length of the moratorium period under the bankruptcy proceedings, which can last as long as 365 days. See 2.8.11 Owner’s/Lessor’s Consent . 2.6.2 Lessor Taking Possession of the Aircraft The lessor can take possession of the aircraft in either a contractual or judicial way under Hungarian law, depending on the level of co-operation of the lessee. Repossession With the Co-operation of the Lessee If the lessee is co-operative, the most effective way to take back physical possession of the aircraft is for the relevant parties to sign a redelivery agreement and proceed with the application for deregistration from the Hungarian Aircraft Register. Repossession If the Lessee Is Not Co-operative If the lessee impedes the exercise of the lessor to repossess the aircraft, the lessor may request the courts to compel the lessee to redeliver the aircraft in accordance with the lease. A judgment of a for - eign court having jurisdiction will be recognised and
enforced in Hungary, subject to the considerations set out in 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards . Under Hungarian law, the lessor may also commence a lawsuit against the lessee and request the Hungarian courts to compel the lessee to redeliver the aircraft on the basis that it no longer has a legal right to pos - sess it. 2.6.3 Specific Courts for Aviation Disputes There are no specific courts for aviation disputes. 2.6.4 Summary Judgment or Other Relief It is not possible for the Hungarian courts to issue a summary judgment and it is rare for them to grant injunctive relief. 2.6.5 Domestic Courts’ Approach to Foreign Laws and Judgments Domestic courts uphold a foreign law as the govern - ing law of an aircraft lease, the submission to foreign jurisdiction and waiver of immunity in accordance with Hungarian law requirements. 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards A judgment taken by a foreign court in proceedings should be recognised and enforced by a Hungarian court, in so far as such a judgment: • is not contrary to public policy in Hungary; • complies with the requirements relating to the form and content of foreign judgments as set out in Hungarian law; and • the jurisdiction of such a foreign court was stipu - lated by the parties in the manner prescribed by Hungarian conflicts law. In the event that any party to the transaction docu - ments seeks to enforce its rights before the courts of Hungary, all relevant documents will have to be trans - lated into Hungarian. See 2.6.12 Enforcement of Foreign Arbitral Deci- sions regarding foreign arbitral decisions.
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