HUNGARY Law and Practice Contributed by: Tamás Éless, Sarolta Édua Szabó, Ulrike Rein and Zsolt Farkas, Oppenheim Law Firm
bifurcated the proceedings and ruled on its own juris - diction as a preliminary issue. If the arbitral tribunal rules on its jurisdiction in the final award, parties may only challenge the jurisdiction of the arbitral tribunal in setting-aside proceedings before the Budapest Met - ropolitan Court, which may be initiated after the final arbitral award has been rendered. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility Hungarian courts have the right to assess questions of both fact and law, and to undertake a full review of the arbitration agreement to determine its existence and validity. The court is not bound by the arbitral tribunal’s decision regarding its own jurisdiction. 5.5 Breach of Arbitration Agreement The court seized of the matter that is the subject of an arbitration agreement shall terminate the proceed - ings if the respondent so requests, no later than in the respondent’s written defence. The court shall not terminate the proceedings if it finds that the arbitra - tion agreement does not exist or is invalid, void or unenforceable. The extraterritorial effect of Article 9 of the Act oblig - ing the Hungarian courts to terminate the proceedings upon request of the respondent if there is an arbi - tration agreement between the parties is confined to cases where the arbitral proceeding seated outside of Hungary is administered by a Hungarian perma - nent court of arbitration. This means that if a court is seized of an action in a matter regarding which the parties have made an arbitration agreement provid - ing for an arbitral proceeding seated outside of Hun - gary and not administered by a Hungarian permanent court of arbitration, the Act does not call on Hungar - ian courts to terminate the proceedings upon request of the respondent. In the absence of such specific procedural provision, Hungarian courts shall refer the parties to arbitration by reference to Article II (3) of the New York Convention. 5.6 Jurisdiction Over Third Parties The Hungarian Arbitration Act contains an explicit pro - vision stipulating that both universal and single legal successors are bound by the arbitration agreement. The Act also recognises the parties’ freedom to opt
out of this provision and agree that the arbitration agreement applies only to disputes between them, and that their possible successor(s) may enforce the claim arising from the legal relationship only before an ordinary court. The Hungarian Arbitration Act provides the possibility for the arbitral tribunal to adjudicate a claim filed by or against a person who is not a party to the arbitration agreement. This is possible if a claim by or against a person not party to the contract can only be adjudi - cated uniformly with the dispute that is the subject of the arbitration agreement. Another prerequisite is that such third party submits to the jurisdiction of the arbi - tral tribunal in a written declaration. The law does not specify when claims can be decided only uniformly; it must always be decided by the arbitral tribunal on the basis of substantive law, considering the circum - stances of the specific case. Unless the parties agree otherwise, the arbitral tribu - nal may, upon either party’s request, make an order for interim measures. Along with the request for interim measures, the party may request the court to issue a preliminary order directing the other party not to frus - trate the purpose of the interim measures requested. A preliminary order can be issued if the arbitral tribunal considers it an existing risk that the prior disclosure of the request for interim measures to the party against which the measures were requested would frustrate the purpose of the measures. With an order for interim measures, the arbitral tribunal may direct the parties to: • maintain or restore a condition until the dispute is closed; • take action or refrain from taking action to prevent probable loss, or prejudice to the arbitral process itself; • make sure that assets that would serve to satisfy a subsequent award are available, or provide collat - eral corresponding to their value; or 6. Preliminary and Interim Relief 6.1 Types of Relief
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