HUNGARY Law and Practice Contributed by: Szabolcs Mestyán, John Fenemore, Balázs Rokob and Nóra Kertai, Lakatos, Köves & Partners
ing. Consequently, the general or limited nature of the moratorium depends also on whether all or just certain creditors are involved in the proceeding. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings Relevant regulations enabling international co-oper - ation in terms of overseas proceedings are, among others: • the 1933 Rome Convention on the Unification of Certain Rules relating to the Precautionary Arrest of Aircraft (the “Rome Convention”); • the 1948 Geneva Convention on the International Recognition of Rights in Aircraft (the “Geneva Con - vention”); • the New York Convention; • the 1965 Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters; • the 2005 Hague Convention on Choice of Court Agreements; and • the 2019 Hague Judgments Convention. Although, by implementation of EU regulations, co- operation and recognition is more comprehensively regulated on an EU level in Hungary, there is no well- developed practice or guidance regarding regulation of co-operation and recognition of cross-border over - seas insolvency proceedings. Act XXVIII of 2017 on Private International Law (the “Private International Law Act”) regulates private rela - tionships containing a foreign law element in Hungary, determining the conditions under which overseas for - eign court decisions may be recognised and also the rules of determining Hungarian jurisdiction. Currently, the UNCITRAL Model Law on Cross-Border Insolvency has not been adopted by Hungary, but this has been encouraged by several Hungarian experts of the field. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney Upon the bankruptcy or insolvency of the lessee, any power of attorney should, as a matter of Hungarian law, remain effective as the aircraft is not owned, but
only used by the lessee. Therefore, the deregistra - tion and exportation of the aircraft will not deprive the lessee of its own assets, and thus would not be in conflict with the interest of its creditors. In practice, the insolvency officer hindering the repossession of the aircraft by declaring such power of attorney with - drawn cannot be excluded. 2.9.5 Other Effects of a Lessee’s Insolvency Effects of Liquidation Proceedings Within a one-year period starting from publication of commencement of liquidation proceedings, any credi - tor of the insolvent company or the liquidator has the right to challenge transactions (which is to be made within a certain timeframe) concluded by such an insolvent company which is of a certain type. The liquidator may seek to recover, within the time periods specified by law, any service rendered by the insolvent company within 60 days of the date pre - ceding the date when a competent court received a petition for the initiation of liquidation proceedings or at any time thereafter, if the provision of such service resulted in a preference to any one creditor and was not made in its normal course of business. The liquidator is also entitled to terminate the con - tracts previously concluded by the insolvent com - pany with immediate effect, in which case the other contracting party has 40 days from the date of such termination to enforce its claim arising as a result of the termination by reporting the claim to the liquidator. Effects of Bankruptcy Proceedings During the period of a moratorium, the creditor of a bankrupt company is not entitled to rescind or ter - minate a contract with the bankrupt company on the basis that the bankrupt company does not pay its debts thereunder (other termination events may still be valid). Consequently, the creditors may not termi - nate a lease on the basis of non-payment during the period of the moratorium even if there is an event of default. During the moratorium period in a bankruptcy pro - ceeding, the debtor cannot, without the approval of the appointed bankruptcy trustee, make any pay - ments based on any claims already existing at the
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