Answer ... Arbitration proceedings are governed by Act LX of 2017 on Arbitration.
The Arbitration Act must be applied if the seat of the proceedings is in Hungary. Certain sections of the act apply also in international arbitration if the seat of the proceedings is outside Hungary (eg, the provisions on enforcement of a foreign award).
Answer ... The Arbitration Act differentiates between domestic and international arbitration. As per the explanatory notes to the act, arbitration is international if:
- the parties’ places of business, at the time when the contract was concluded, were in different countries;
one of the following places is outside the country in which the parties’ places of business are located:
- the agreed venue of arbitration; or
- the place where the essential part of the commercial obligations arising from the parties’ legal relationship must be performed or with which the subject of the legal dispute is most closely connected; or
- the parties expressly agree that the subject of the contract is connected with more than one country.
The act itself does not differentiate manifestly between international and domestic arbitration; the most significant difference is that in the case of international arbitration, the citizenship of the chairman or the sole arbitrator must differ from the parties’ citizenship.
Answer ... Yes, the Arbitration Act is based on the UNCITRAL Model Law on International Commercial Arbitration, as amended in 2006.
Answer ... Arbitration is based on the principle of party autonomy; thus, the parties may freely agree on many issues, although the Arbitration Act does include some mandatory provisions (eg, the number of arbitrators may freely be chosen, but this number must be odd). Where issues have not been specifically addressed by the parties, the act contains supplementary provisions.
Answer ... As the Arbitration Act is new - it came into force as of 1 January 2018 - there are currently no plans to amend the legislation.
Answer ... Yes, Hungary is a signatory to the New York Convention. Upon ratification, the following reservation was made: “The Hungarian People's Republic shall apply the Convention to the recognition and enforcement of such awards only as have been made in the territory of one of the other Contracting States and are dealing with differences arising in respect of a legal relationship considered by the Hungarian law as a commercial relationship.”
Answer ... Yes, Hungary is also a signatory to:
- the Convention on the Settlement of Investment Disputes between States and Nationals of Other States; and
- the European Convention on International Commercial Arbitration.