4 STEPS TO ENFORCE A FOREIGN JUDGMENT IN HUNGARY

09 August 2023

Considering that more and more Hungarian companies trade with foreign companies around the world, the number of cross-border disputes is also rising. Consequently, it is becoming common for a Hungarian company to be sued abroad. But how can you enforce the foreign civil law judgments in Hungary?

Enforceable foreign judgments in Hungary

First, it is noted that from an enforcement perspective, there are 3 types of foreign civil law judgments:

1. EU / EEA judgments;
2. Foreign judgments recognised by bilateral treaty;
3. Foreign judgments recognised by the Hungarian Privat International Law Act[1].

EU /EEA judgment

A civil or commercial law judgment made in the EU/EEA, the unique feature of these judgments that they are automatically recognised in Hungary without any intermediary procedure ('exequatur').

Foreign judgments recognised by bilateral treaty

Hungary has concluded several international treaties with other states which enables, under the conditions laid down in the treaty in question, the enforcement of the foreign civil law judgments in Hungary.

These countries are the followings: Albania, Algeria, Belarus, Bosnia and Herzegovina, China, Cuba, Egypt, Iraq, Kosovo, Moldova, North Korea, North Macedonia, Mongolia, Montenegro, Russia, Serbia, Syria, Tunisia, Ukraine, Vietnam.

Foreign judgments recognised by the Hungarian Privat International Law Act

If the EU regulation or the bilateral treaties are not applicable to determine whether a foreign court decision can be recognised in Hungary, the provisions of the Hungarian Private International Law Act (“PIL Act”) provide guidance.

The PIL Act provides that a foreign court decision shall be recognised if

1. the jurisdiction of the proceeding foreign court is well-founded,
2. the decision became final, and
3. none of the reasons for refusal (e.g.: it would violate Hungarian public policy; res judicata etc.) is met.

It is noted that reciprocity between Hungary and the state of the court rendering the judgment shall be another requirement of the recognition of decisions rendered in proprietary matters except if a) the jurisdiction of Hungarian courts was excluded in the case, or b) the jurisdiction of the proceeding foreign court is based on an agreement between the parties which is in compliance with the provisions of Hungarian law.

4 Steps to enforce a foreign judgment

While the specific rules on recognition and declaration of enforceability are typically found in foreign legal instruments, the enforcement of judgments is governed by domestic, national rules.

According to the Hungarian Act on judicial enforcement procedure, the following procedural steps are necessary to enforce a foreign judgment in Hungary:

1. the creditor shall attach to the application for enforcement the foreign judgment to be enforced and, if necessary, at the request of the court, a Hungarian translation of the foreign judgment.

In case of an EU/EEA judgment, a) a copy of the EU /EEA judgment; and b) the certificate issued by the acting EU/EEA court confirming the enforceability and giving details of the judgment, e.g.: relevant information on the recoverable costs of the proceedings and the calculation of interest shall be attached.

2. If the foreign judgment is enforceable, the court issues an enforcement certificate for the foreign judgment, certifying that the judgment is enforceable under Hungarian law in the same way as the judgment of the domestic court; the court order may be appealed.

3. After an order has become final, the court shall issue an enforcement sheet on the basis of the foreign decision with a certificate of enforcement and shall send it to the court bailiff.

4. Based on the enforcement sheet, the court bailiff shall seize the debtor's assets.