HUNGARY Law and Practice Contributed by: Tamás Éless, Zsolt Farkas, Sarolta Szabó and Lili Bischof, Oppenheim Law Firm
In addition, Hungary is a party to the Geneva Con- vention (European Convention on International Com- mercial Arbitration 1961) and the ICSID Convention (Convention on the Settlement of Investment Disputes between States and Nationals of Other States). Arbitral awards are enforced in accordance with the provisions of Act LIII of 1994 on Judicial Enforcement. 13.2 Subject Matters Not Referred to Arbitration The scope of disputes that can be arbitrated under the Arbitration Act is broad. The Arbitration Act stipu- lates that disputes arising out of a consumer contract (except for disputes relating to fiduciary asset man- agement contracts), proceedings regulated in Chapter 7 of the CCP (such as family law, public and private guardianship issues, as well as labour and enforce- ment disputes) and disputes falling within the scope of Act I of 2017 on Administrative Court Procedure are non-arbitrable. 13.3 Circumstances to Challenge an Arbitral Award Setting Aside of Arbitral Awards An award rendered in an arbitral proceeding seated in Hungary may only be challenged by an application to set aside the award. This must be submitted to the Budapest Metropolitan Court within 60 days from the receipt of the award. The court may set aside the award only in cases stipulated by the Arbitration Act. An award can only be set aside in exceptional cases – eg, when the arbitration agreement was invalid, or one of the parties did not have legal capacity to act, or the award is contrary to Hungarian public policy. Hungarian courts are not entitled to review the merits of an award. Retrial Proceedings The Arbitration Act introduced a new type of remedy against an arbitral award, namely a retrial proceeding, which can be initiated up to one year following the receipt of the arbitral award. The party requesting the retrial proceeding shall refer to facts or evidence that it could not submit in the initial proceeding for reasons that were not its own fault, provided that the submis- sion of such facts or evidence could have resulted in a
more beneficial award. The parties may opt out of the provisions of the Arbitration Act on retrial proceedings either in the arbitration agreement or at a later stage when determining the rules applicable to the conduct of the arbitral proceeding. 13.4 Procedure for Enforcing Domestic and Foreign Arbitration Enforcement Procedure In case of arbitral proceedings seated outside of Hun- gary, the first step before the enforcement procedure is the recognition of the arbitral award pursuant to the New York Convention, if applicable in light of the reservation of reciprocity, or other multilateral or bilat- eral treaties. According to the practice of Hungarian courts, the application for recognition may be made together with the request for enforcement, as the same court decides on both requests. However, the recognition must happen first, which might be a lengthy proce- dure, as the court’s decision can also be subject to review by the Curia. Once the award is recognised, it is deemed to be enforceable in the same way as domestic awards – ie, it is equivalent to the judgment of Hungarian courts. Arbitral awards are enforced in accordance with the provisions of Act LIII of 1994 on Judicial Enforcement. The party requesting enforcement shall submit the original or a certified copy of the arbitration agree- ment. Approach of the Courts The approach of Hungarian courts towards the rec- ognition and enforcement of arbitral awards is, in general, arbitration-friendly, and courts interpret the grounds for rejection very restrictively. 14. Outlook 14.1 Proposals for Dispute Resolution Reform The CCP came into effect on 1 January 2018, and has even been comprehensively revised and amended since then. Thus, currently, there are no proposals for dispute resolution reforms in Hungary.
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