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published on 4 May 2021 | reading time approx. 7 minutes
If there is a foreign element in a legal relationship the provisions of the international jurisdiction has to be examined in order to be able to determine whether the courts of a state are entitled to decide in the issue.
According to the EU-Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (hereinafter: Brussel Ia), a natural person can in principle be sued before a court of a member state in which his place of residence can be found. In addition to that, the Brussel Ia-Regulation determines a number of special jurisdictions.
According to the above regulation, however, the Parties can agree regardless of their place of residence that a court or the courts of the member states of the EU shall decide on an already existing legal dispute or about a future legal dispute arising from a specific legal relationship. In the event of such agreement between the Parties, this court or these courts of the member states – unless otherwise agreed by the Parties – shall have exclusive jurisdiction unless the agreement is substantively void under the law of that member state.
Three instances of the court organization exist in Hungary.
In the first instance proceed:
In the second instance proceed:
In the third instance proceed (in criminal issues):
The Hungarian court system is a regular court system including the local courts, the regional courts, the courts of appeal and the curia. The administrative and labor courts has existed as special courts in Hungary but they were deleted on 1 April 2020. The issues which belonged to the administrative and labor courts earlies have been integrated into the ordinary court system.
The division of the work among the courts with the same jurisdiction is based on the territorial basis.
The courts deal with the following issues:
There are five courts of appeal in Hungary: Court of Appeal Debrecen, Court of Appeal of the Capital City of Budapest, Court of Appeal Győr, Court of Appeal Pécs and the Court of Appeal Szeged. They decide on the appeals against the decisions of the local regional courts.
The Curia (formerly the Supreme Court) develops the uniform jurisdiction. In this regard, the Curia passes resolution on legal units and carries out legal practice analyses. In addition, the Curia examines the applications for resumption and for reviews against the final judgments and acts as third instance court in legally determined criminal issues.
In the Hungarian civil procedure, applications against final judgements may be possible only under very strict conditions and to a very limited extent.
An application for resumption is i.a. possible if the respective party refers to such facts or evidence and to such final court or other authority orders which has not been judged by the court in the procedure on condition that this would have been resulted in an order – in case of its judgement – being more favorable for him and the party was not able without his fault to enforce the facts, evidences or orders stated in the application for resumption during the previous procedure. The application can be submitted within six months after becoming aware of the final judgement (subjective deadline) but maximum within 5 years (objective deadline).
The application for review against the final judgement can be submitted – under other conditions – only by referring to the breach of a legal provision affecting the case and to the deviation from the order published by the Curia regarding the legal question. Its deadline amounts to 45 days after publication of the final order.
According to the Hungarian Basic Law, everybody has the right to have any charges raised against him or her convicted within a reasonable deadline.
However, the reasonable deadline cannot be defined precisely and it always depends on the circumstances. According to the statistical data 87,5 per cent of the legal disputes, i.e. the vast majority, is closed within one year after the receipt by the governing instance. In case of complicated issues, however, you must assume that the processes may last for ca. 2-3 years or more until a final decision.
According to the Hungarian Code of Civil Procedure (Code of Civil Procedure), legal costs are all costs incurred at the parties – during or prior to the process – in causal connection with the procedural enforcement of a right and inevitably incurred costs, including the loss of earnings occurred through appearing in court. Only such expenses can be deemed as legal costs that actually arise at a party. The acting court is entitled to assess the necessity of the costs.
The law does not contain any list about the expenses that can be enforced as legal costs. In case of civil law procedures is the most common expense is the court fee that shall be paid by the plaintiff at the opening of the case. The general amount of the court fee of civil law proceedings at first instance amounts to six percent, however a minimum of fifteen thousand Forint and a maximum of one million five hundred thousand Forint. The law determines different amounts of court fees for specific cases, e.g. the fee amounts to one percent but to a minimum of five thousand Forint and to a maximum of three hundred fifty thousand forint in enforcement procedures. The law states exact fees for certain civil law proceedings, e.g. the fee of a divorce proceeding amounts to thirty thousand Forints.
Other costs are the costs of attorneys, in case of cooperation of an expert, his/her costs and the relevant costs confirmed by the parties (e.g. travel costs).
In principle, the party who wants to prove something in a court procedure is obliged to advance the costs in connection with the evidences. The court decides on the bearing of the charged legal costs in a resolution at the end of the procedure in which the amount of the costs of the proceedings and the person being obliged to reimburse the costs are determined. The court obliges the obliged person to pay the costs.
According to the general rule, the unsuccessful party is obliged to reimburse the legal costs of the winning party.
It is different in case of a partial victory because in this case, the party has to reimburse the legal costs of the other party in proportion to his defeat. If the difference in proportion to the victory and defeat and the difference between the legal costs determined in favour of the party and the other party are not significant, none of the parties are obliged to reimburse the legal costs (In this case, each party will bear its own costs).
If the parties have concluded a court settlement, the party reimburses the legal costs of the other party according to the agreement of the parties. In the absence of an agreement, the legal costs of the party winning according to the settlement will be reimbursed by the party being unsuccessful according to the settlement.
The legal costs not affected by the reimbursement obligations or a part of it shall be borne by the party at whom they have occurred.
According to the Hungarian legal provisions, the parties can use various cost reductions (legal aid) to help the enforcement of their right provided that they meet their conditions. The types of the costs reductions:
The purpose of the temporary legal protection is to grant immediate legal protection. The general purpose of the temporary legal protection is to immediately protect the person seeking justice.
The purpose of the temporary legal protection can be the followings:
In the course of the assertion of the claim, the following three types of temporary legal protections can be considered.
The temporary injunction can be requested before filing a lawsuit or during the procedure.
The court can order a temporary injunction on request:
In the application for temporary injunction, the facts reasoning the existence of a conditions serving as a basis for the ordering of a temporary injunction shall be presented and made credible.
In the interests of the legal protection of the beneficiary, the following decisions shall be declared tot o be enforceable (provisional enforceability) immediately according to the law regardless of the appeal:
The court may waive the statement of provisional enforceability in the above cases if it would impose an unreasonably higher burden on the defendant than the waiver of the provisional enforceability on the plaintiff.
In addition to the above legal remedies, the entitled person is allowed to request a so-called security measure according to the Hungarian law on the foreclosure. For the ordering of a security measure, the applicant has to make credible that the later satisfaction of the claim is in danger. Moreover, the claim has to base on a resolution on the basis of which the enforcement would be possible but there is no possibility in this regard because either the resolution is not yet final or cannot be provisionally enforced or the resolution is final but the fulfillment period has not expired yet.
According to the Hungarian legal provisions, a foreign order may be in principle enforced basically on the basis of a law, an international agreement or the reciprocity in Hungary.
At the EU legal level, there are also several decrees that shall be applied in case of the enforcement of an order within the European Union.
Basically, the conditions of the acknowledgement and enforcement are regulated by the EU decrees. However, these regulations does not contain the provisions of the enforcement procedure itself because the law of the enforcing state shall apply for the enforcement procedure. The Hungarian legal provision shall be applicable also with regard to the provisions of the provided decree or the international agreement.
Foreign orders can have legal effects according to the respective legal provision if the state – enforcing the order – acknowledges this. As a result of the acknowledgement, the order has the same effect as an order made by the court of a member state.
The requirements for the acknowledgement have not to be examined by the court if it is stated according to an EU legal norm that the order has to be acknowledged and enforced without requiring a statement of enforceability and without the acknowledgement being contested. Among others, the EU-Decrees No. 44/2001 and 805/2004 prevent the procedure of statement of enforceability of a decision.
In the practice, the enforcement title (e.g. court decision) and the certification have to be presented in Hungary according to Article 53 Brussels Ia-Decree in order to achieve the enforcement in Hungary.
Hungary has been member of the New York Convention being applicable for the foreign arbitral awards since 1962.
The states participating in the Convention acknowledge the right of the parties to an arbitration procedure and all contractual states acknowledge the orders passed by the arbitrational court as binding and enforce this according to the procedure rules according to which the acknowledgement and implementation of the order of the arbitrational court is requested. This means that foreign arbitrational court orders may be enforced in Hungary according to the Hungarian law and to the Hungarian procedural rules also in this case.
Litigation & Arbitration
Agnes Lengyel
Associate Partner
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