HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
2.6.7 Judgments in Foreign Currencies In terms of lease agreements governed by foreign law, in respect of disputes, the jurisdiction in connec - tion with the lease determines whether a lessor can obtain a judgment in a foreign currency under an air - craft lease. If any arbitral award or judgment is obtained in a foreign currency, it is possible that it could only be enforced in Hungary in Hungarian forints. In the event of any proceeding being brought in a Hungarian court in respect of a monetary obligation payable in a cur - rency other than forints, a Hungarian court may pass a judgment as an order to pay the equivalent of Hungar - ian forints at the time of actual payment by the debtor. 2.6.8 Limitations on Lessors’ Actions Following Termination Bankruptcy and insolvency laws may limit the lessor’s ability to recover default interest (or the compounding thereof) or to charge additional rent following termina - tion of the lease for default. See 2.9.5 Other Effects of a Lessee’s Insolvency for a more detailed description of potential limitations. 2.6.9 Lessor’s Requirement to Pay Taxes/Fees There are no fees connected with the enforcement of the lease other than the statutory fees for court enforcement. 2.6.10 Mandatory Notice Periods There are no specific compliance requirements regarding notice periods for the termination of an air - craft lease that relate to aircraft operated domestically or leased by a domestic operator. 2.6.11 Lessees’ Entitlement to Claim Immunity The Hungarian state and emanations of the Hungarian state are, in certain situations, entitled to claim sover - eignty and immunity from suit before the civil courts. This can be waived on the terms set out in applicable Hungarian law. Most commercial aircraft lessees in Hungary are pri - vate companies and are not entitled to claim sover - eignty or other immunity from suit.
2.6.12 Enforcement of Foreign Arbitral Decisions Hungary is a party to the 1958 Convention on the Rec - ognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) and a decision by an arbitral tribunal in another contracting state should be recognised and enforced by the domestic courts in Hungary pursuant to the New York Convention. 2.6.13 Other Relevant Issues This is not applicable in Hungary. 2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation Hungarian law recognises contractual assignment and novation. When the novation agreement is governed by a foreign law, care should be taken in the drafting to ensure that the assignment and novation have the intended effects under Hungarian law. 2.7.2 Assignment/Novation of Leases Under Foreign Laws The laws of Hungary should recognise and enforce the novation of leases governed by a non-Hungarian law (see 3.4.3 Application of Foreign Laws ). Under Hungarian law: • the consent of the lessee is required for a novation of a lease from a seller to the buyer; • the lessee must be notified of an assignment and instructed to perform its obligations to the buyer; and • the existing rights of the lessor can be transferred by assignment, but the obligations of the seller as lessor cannot be validly released and transferred to the buyer without the consent of the lessee as the beneficiary of performance of such obligations. Any novation must identify, with sufficient precision, the needs of the parties and the leased asset(s) in question. The novation should contain valid governing law and jurisdiction clauses. 2.7.3 Enforceability of Lease Assignments/ Novations If any party to an aircraft and/or engine lease assign - ment and assumption/novation seeks to enforce its
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