Can a valid, but inapplicable choice-of-court clause, be regarded as a "tacit" jurisdiction agreement? Is it sufficient to establish the jurisdiction of the courts of a member state under the Brussels I Regulation? This article addresses these questions based on a judgment that the Hungarian Supreme Court delivered in a cross-border dispute between a Hungarian claimant and a Romanian defendant.
The only thing more annoying than an award-debtor concealing their assets after successful arbitral proceedings is an award-debtor trying to further frustrate the award-enforcement by concluding a choice-of-court agreement. But does this kind of jurisdiction clause extend to the non-signatory award-creditor? This article analyses the recent decision of a Hungarian appellate court, delivered under the EU Brussels Ibis Regulation,(1) in which the court had to rule on the personal scope of a jurisdiction clause.
Business life involves a variety of contracts that are not regulated by the civil codes in continental jurisdictions. In cases where the parties conclude a so-called "atypical contract", it is for the judge to decide whether the default rules of a nominated contract regulated by the Civil Code can be applied in a gap-filling function. The recent decision of a Hungarian appellate court, which was also published in the Hungarian Collection of Court Decisions, analysed whether a workforce supplier could invoke the rules applicable to agency contracts to support their damage claim under Hungarian law.
We visited our client, TE Hungary at its Hungarian plant in Esztergom. Mr. Zsolt Csányi, company manager guided us through the labyrinth of production halls, showing us the manufacturing processes and also the new plant extension project, in which our firm provides full contractual and construction law legal support to TE Hungary.
In business, it often happens that the parties enter into a contract with a choice of court agreement for eventual legal disputes and then, years or even decades later, the legal dispute occurs. What is the effect of changes that have occurred in legislation on the choice of court agreement? Will the applicability of the choice of court agreement be decided according to the rules in force at the time of the conclusion of the contract or those applicable when the lawsuit was initiated? A recent decision of the Hungarian Supreme Court allows for an analysis of these questions.(1)
While the reviewing of questions of law by higher courts is generally permitted at the judicial remedy stages of civil litigation in Hungary, questions of fact, and the free deliberation of evidence, can only be reviewed exceptionally by the Hungarian Supreme Court under well settled case law. Is this rule also applicable under the new Civil Procedure Code? This article answers this question by analysing the recent judgment of the Supreme Court in a case concerning the impacts of covid-19 on the Hungarian phase of the Giro d'Italia cycling race.
The assignment of claims is a common practice in business, yet under Hungarian law, it has not been made clear what rights are transferred to the new owner of the claim, and what claims can be litigated by the assignee. It is also unclear whether the assignor and assignee can determine the extent of the rights transferred by assignment. Due to a recent decision of the Hungarian Supreme Court, analysed in this article, this situation has become clearer.
Based on the basic principle of international civil litigation, a person can usually be sued only in the courts of their own country. However, this makes it very difficult for a claimant who wants to enforce their rights against several defendants living in different countries. Can the jurisdiction of the Hungarian courts that exists in respect of a domestic defendant (the so-called "anchor defendant") be extended to foreign defendants as well? This article analyses the practical application of the new rules enforced in 2018 based on a recent decision of the Hungarian Supreme Court.
One of the major innovations of the new Civil Procedure Code ("CPC"), which entered into force in 2018, was the introduction of the so-called "substantive legal guidance by the court", under which the judge may "assist" the parties under certain conditions to define the framework of the dispute as soon as possible and to bring the dispute to a conclusion within a reasonable time. Can the judicial assistance extend to the type of action that the plaintiff may bring? We examine the above question in the light of a recent decision of the Curia.
Conflict of laws issues can have a pivotal effect on the effectiveness of arbitration when state courts are asked to enforce arbitration agreements. Has the approach of Hungarian courts crystalized in the last years in this respect? Can the contemporary Hungarian judicial practice and the new domestic legislation be characterized as arbitration friendly? This post provides the answers to these questions.
In its recent decision, the Hungarian Supreme Court examined whether liquidation proceedings can be started against a debtor who received online invoices via email and failed to pay them. Is the principle of free evaluation of evidence in civil litigation also valid in insolvency proceedings in Hungary? Are contract provisions relating to the service of contractual notices applicable in such cases? This article analyses the decision and answers the above questions
After several condemnations from the European Parliament, the Hungarian legislature has introduced a new legal remedy to get financial compensation from the state in the case of excessively long civil litigations, so that the injured parties will not need to apply to the European Court of Human Rights (ECHR) for redress. This article summarises the main features of this new remedy and its potential effects on litigations in Hungary.
Under what conditions can a minority shareholder sue the managing director on behalf of the company if the majority of shareholders do not support the motion? Should these conditions be interpreted restrictively or broadly? This article analyses the above questions in the context of a recent Supreme Court judgment.
Our managing partner, dr.Richard Schmidt held a webinar on the international and domestic court practice of the New York Arbitration Convention. The event was co-organised by the Legal Section of the Hungarian Chamber of Commerce and Industry and the Hungarian Lawyers’ Association.
The Supreme Court recently ruled in the case of a British Academy of Film and Television Arts award-winning composer who sued a French company in Hungary because of the illegal use of his music in video games distributed on online platforms. Besides the issue of the Hungarian courts' jurisdiction on a matter involving a foreign defendant and international copyright infringements, the other issue was whether the original licence granted by the claimant covered these different modes of exploitation.
Drawing a well-defined line of demarcation between domestic and international public policy when enforcing foreign arbitral awards sends a clear pro-arbitration message from national courts in any jurisdiction. Does Hungarian case law come close to this level of sophistication? This post analyses this question in the context of procedural public policy, and it does so based on two recent appellate court decisions rendered in the context of enforcement of arbitral awards in accordance with the New York Convention.
Can the shareholder of a company assert claim on its own right against a third-party causing damage to the company, by contending that the damage suffered by the company has also decreased the value of its share? To what extent can the right to access to court limited in the name of the sound administration of justice? We address these questions by analysing a recent judgment of the Hungarian Supreme Court.
Our Managing Partner, Richard Schmidt LL.M, held a webinar on asymmetrical jurisdiction and arbitration agreements in international dispute resolution, co-organised by the Hungarian Arbitration Association, the Essec Business School and the Hungarian Bar Association.
Can a judge be disqualified from deciding a legal dispute on the grounds of bias if they have delivered a judgment which is unfavourable to the plaintiff in another case? Can a court be biased if a plaintiff has challenged a previous decision thereof before the European Court of Human Rights (ECtHR)? This article answers these questions by analysing a recent Supreme Court judgment
This article analyses a recent Supreme Court decision(1) and seeks to answer the following questions: - Can a defendant which is domiciled abroad be sued in Hungary under the EU Brussels Recast Regulation (1215/2012/EU) in the event of defective performance of an international sales contract if the place of performance is abroad? - Can the jurisdiction of a Hungarian court be established based on the fact that a lower court expressly established its jurisdiction at the beginning of the litigation? - How is the Ex Works (EXW) clause to be interpreted within the meaning of the EU Brussels I Regulation?
The Supreme Court recently concluded that the res judicata effect of a final judgment precludes the claimant from starting new litigation on the same legal grounds for a part of the claim which was not sought in the preceding lawsuit. This article answers the following questions: - Is this judgment reconcilable with case law? - How will this judgment affect party autonomy in civil litigation? - How will this judgment affect test cases in Hungary?
Our managing partner, dr.Richard Schmidt has recently participated as national reporter in a project, launched by the International Council for Commercial Arbitration, focusing on the legality of remote hearings in international arbitration.
After three years, the legislature has finally amended the Civil Code of Procedure (CCP), which took effect in 2018 and has since been criticised for sacrificing fundamental rights in favour of accelerated civil proceedings. This article examines the key changes, which took effect on 1 January 2021, and whether a fairer balance has been reached between form and content in civil litigation.
Can parties stipulate in a commercial lease that a user charge amounting to three times the monthly rent will apply if the lessee fails to vacate the leased premises? Further, can a judge qualify such an excessive fee as a penalty which the court can reduce? This article analyses a recent Supreme Court decision in order to address these questions.
Can parties' conduct during litigation amount to an implied choice-of-law agreement based on EU Regulation 593/2008 (Rome I Regulation)? This article analyses a recent Supreme Court judgment concerning this question.(1)
In certain cases, the Hungarian Labour Code does not require the dismissal to be justified by Employer. But what, if despite that, the employer gives justification for the dismissal? Is it possible for the Labour Court to review the legality of such non-mandatory justification? And can the defect of this non-mandatory justification render the dismissal unlawful? In its recent decision, the Hungarian Supreme Court examined the above question concerning that analyse the decision in our article.
Travel restrictions to Hungary (“Travel Restrictions”) can be regulated on unilateral, bilateral or multilateral level. So far, we have knowledge about one unilateral and three bilateral travel restrictions adopted by the Hungarian government, so this overview will be focused on these. However, given the fast-changing nature of the situation, it can be the case that more bilateral agreement will be adopted, that change the current legal environment.
Can employers withhold the wage of employees because of an ongoing internal investigation? Is the suspicion that the employee caused damage sufficient to hold back mone, or the payment cannot be refused in this case? We analyse the recent decision of the Hungarian Supreme Court and answer this question in this article.
Due to the protective measures of the EU Recast Brussels I Regulation (1215/2012), persons domiciled in an EU member state can be sued in another member state only in limited cases. One of these exceptions is the jurisdiction granted by the regulation to the courts of the place of the performance of a contract. However, does this exception apply in cases of legal succession or subrogation? The Supreme Court addressed this issue in a recent decision.
Whether the lack of handover makes the dismissal unlawful based on the recent judgment of the Hungarian Supreme Court? What happens in case the employee fails to take over the dismissal? We address these issues in our article by analysing a recent judgment of Hungarian Supreme Court.
After the bill, passed in 2018 on restrictions of foreign investments, Hungary further limits the domestic investments of the foreigners because of the COVID-19. The new decree extends the scope of the investments to be notified and introduces fines, too. We explain the most important provisions of the decree in this article.
According to the Labour Code, if the executive unlawfully terminates his employment, the employer is automatically entitled to damages equals to twelve months’ absentee fee without proving the actual damage. Can this rule be applied in an opposite situation? We explain the recent decision of the Curia which answers to this question.
While COVID-19 has been dominating the headlines, a new act, which entered into force on 1 April 2020 and fundamentally reforms the role of judge-made law in Hungary, has received less attention. This article examines why this landmark bill was passed, the extent to which it means the adoption of common law and what its potential impact will be on litigation in Hungary.
Measures taken due to the corona virus in recent weeks in Hungary affected the enforcement of securities over real estate, as well. The Governmental Decree regarding this matter provides more assistance to the Debtors who got into trouble due to State of Emergency to overcome the difficult period and may affect indirectly the enforcement proceedings started earlier, weakening the chances of creditors to satisfy their secured claims within reasonable time.
Can the conduct of the parties during litigation amount to an implied choice-of-law agreement based on the Rome I Regulation? We analyse the fresh judgment of the Hungarian Supreme Court in this article.
The coronavirus has significant impact on the whole world economy, including the sale of goods. Whether the epidemic is considered as a force majeure event, which automatically exempts from liability to perform an international sale contract? We answer this question under the Vienna Sales Convention and its judicial practice.
Can a party commence litigation in Hungary despite a jurisdictional agreement in favour of a court of a non-EU state which is optional for one of the parties? The Supreme Court recently answered this question in a case which highlights the negative effects of such asymmetric choice-of-court agreements.
Is a penalty for delayed performance enforceable if the purchaser fails to reserve its rights immediately? Or is enforceability excluded only if the purchaser expressly waives its right? This article analyses the Supreme Court's judgment in a recent construction dispute, in which the court appears to have maintained its estoppel-based practice despite recent legislative changes.
Can the unfairness of cross-border claim be reviewed ex officio in case of consumer contracts in such a simplified procedure, like the European order for payment procedure? In our article, we analyse the recent judgement of the Court of Justice of the European Union in the Bondora case and its possible effects on cross-border debt recovery, covering also the Hungarian legal regulations.
You can hear a lot of stories where the debtor “escaped with the money”, the construction contractor “disappeared” or the debtor company’s assets have been hidden. Essentially, failure to pay is a breach of contract, which is subject to civil action, eg. litigation. However, if a transaction is suspected to be a scam, criminal proceedings may be brought against the defaulting debtor, for example, for fraud, which we examine in this article.
Our managing partner Richard Schmidt gave a lecture on the law governing the arbitration agreement at a conference organized by his Alma mater, the Pázmány Péter Catholic University Faculty of Law and Political Sciences.
The case law of Hungarian construction disputes in the last years sheds light on the intention of courts to protect the “weaker party”. The Supreme Court has already started to protect subcontractors by declaring certain contract terms invalid, and its recent decision even places more risks at general contractors. How to cope with these challenges in Hungary? We address this question in our article.
This post analyses the decisions of Hungarian courts, rendered under the New York Convention (“Convention”) and published in the last two decades. The decisions were initially made available to the international arbitration community in the ICCA Yearbook of Commercial Arbitration series. This case law of 20 years is summarized below by identifying the main directions of the application of the Convention in Hungary.
Construction trusteeship, as mandatory collateral management of major construction projects in Hungary, strives for protecting subcontractors against non-paying general contractor, by allowing direct payments from employer under certain conditions. How does it work in practice and what are the limits of subcontractor protection? We address these issues in this article.
In May 2019 the European Court of Justice condemned again the Hungarian Land Act of 2014 cancelling usufructs on arable lands in Hungary without providing any compensation for right-holders. What is the “added value” of this second judgment, and why it is important for investors seeking damages for losing usufructs on lands?
This May we participated in the European Conference of International Law Firms in Milan, where our managing partner Richard Schmidt held a presentation to members of ILF on recent developments of European Data Protection Law. The presentation focused on the lessons learnt from the first GDPR fines imposed by the national data protection authorities of various European jurisdictions in the 1st year of GDPR.
Collateral management is a key issue in every construction project. In Hungary a special regime, the so-called construction trusteeship protects the interest of the participants of major private construction projects, and secures that contractors and subcontractors receive their remuneration for the work performed.
“I only believe in statistics that I doctored myself” goes the famous quote attributed to Winston S. Churchill. Well, it is out of question that the late British prime minister has not participated in the publication of the Hungarian Court Statistics for 2018, it is worth to have a look at the figures, how the New Civil Procedure Code has changed the appetite for litigation in 2018 in Hungary.
To what extent shall the engineer be independent and impartial under FIDIC construction contracts? Are the same standards applicable to the members of the dispute board? Do they have an obligation of disclosure? We address these questions in the light of the Hungarian court practice.
Infringement of the public order is one of the “most popular grounds” of challenging arbitral awards in Hungary. Whether this ground shall be invoked by the parties or it can be considered by the state court from its own motion? What is the standard of review of Hungarian state courts? We summarise the answers in this article.
What is the standard of review of Hungarian state Courts, when arbitral awards are challenged on the basis of procedural grounds? What are the most frequently invoked procedural faults? We address these question in our article.
How domestic and international arbitral awards are enforced in Hungary? On what basis can be the enforcement refused? What kind of remedies are available against the “exequatur”? We summarise the answers for these question in this article.
What kind of decisions can the arbitral tribunal make in Hungary? Which substantive law is applied? What are the requirements as to the form and content of arbitral awards? What kind of awards may be rendered, and what are the differences between them? We address these issues in this article.
On what grounds can arbitrators be challenged and removed in Hungary? What are the main features of the challenge procedure? What is the difference in case of institutional arbitration? What happens if an arbitrator becomes incapable of performing his duties? We address these question in our article.
Who can be arbitrator in Hungary? How and when the arbitral tribunal is constituted, and what happens if one of the parties fails to appoint arbitrator? What are the basic obligations of arbitrators and how does their mandate terminate? We address these questions in this article.
Whether a mobile payment system can be nationalized in an EU member state relying on the doctrine of services of general economic interest? The Luxembourg court this time examined the Hungarian national mobile payment system. We analyze the reasons of the decision in our article.
In which cases does Hungarian law govern an international arbitration agreement? What are the basic requirements of formal and substantive validity of an arbitration agreement under Hungarian law? What are the consequences of a valid arbitration agreement in Hungary? We address these question in this article.
Our managing partner Richard Schmidt made a joint presentation on the General Data Protection Regulation for French entrepreneurs and directors at the club DEFH, together with Mr.Julien Thomas, IT professional and founder of YourOSoft.
We have arrived at a very important milestone in the history of our Office, and we are glad to inform you that this year we celebrate our 10th Anniversary. Looking back, our Office went through a long improvement until the formation of our present profile: providing legal support in domestic and international commercial law issues.
How the arbitration procedure is started in Hungary? Until which point is it possible to modify the claim and the statement of defence? What are the consequences of the default of the claimant and the respondent? When oral hearing is mandatory? We summarise the answers among others to these question in our present article.
Can the government take your clients by setting up a new state monopoly? What are the boundaries of state intervention into the free market under the European Convention on Human Rights? We address these questions by summarizing the ruling of the Strasbourg Human Rights’ court in the Hungarian schoolbook market case.
What are the basic procedural principles of arbitration proceedings in Hungary? To which extent are the parties free to choose procedural rules? What is the applicable law and is there any time limit to deliver the arbitral award? We address among others these question in this article.
On what grounds can arbitral awards be set aside by state courts in Hungary? What is the deadline for starting the setting aside procedure, which court is competent to try the case, and what are the main features of the procedure? We summarise the answers to these questions in this article.
Has your debtor just gone bankrupt? Has he alienated his assets to a foreign company before that? When can you sue the latter in your home country for concealment of assets to avoid an expensive foreign litigation? In its judgment in the Feniks case the Court of Justice of the European Union, answers the above question, which we summarise in our article.
The new Civil Procedure Code (CPC) entered into force on 1st January 2018, with the aim to accelerate civil and business litigations in Hungary. One of its means is the strong limitation of modification of claims and submitting evidences during the procedure. We summarise the most important provisions in this subject below.
The new Civil Procedure Code (CPC) entered into force on 1st January 2018, has reformed significantly the Hungarian Civil litigation in order to speed up litigations. One of its major novelty is the division of the first instance court procedure into 2 parts, the preparatory phase and the trial phase. We summarise the most important features of these two phases of first instance court procedure below.
The Hungarian Arbitration Act entered into force on 1st January 2018. In this article we summarise its material scope (arbitrability), territorial scope and its other general provisions, like interpretation, the rules of written communications.
Arbitration in Hungary is governed by different sources of law. In addition to the sources of international and national law, the rules of proceedings of permanent arbitration institutions, and the case law of state courts and arbitration tribunals must be also considered.
We are no longer keeping it secret: in August, the new law on the protection of business secrets entered into force, which, unlike the fragmented rules that have been applied so far, will protect business secrets and know-how in Hungary more uniformly and effectively. We summarize the most important aspects of the new law in our article.
The new Hungarian Arbitration Act, effective from 1st January 2018 introduced important changes in relation with commercial arbitration in Hungary. Whether the new law will change the former restrictive case law regarding the effect of insolvency to arbitration proceedings? We address this question in our latest article.
The Devil is always in the details. The truth of the old adage is proven by the new bill adopted by the Hungarian Parliament during the hot summer sessions of July 2018. The new law amending the Bankruptcy Act modifies only one section of the liquidation procedure, but it will further erode the already low paying moral in Hungary, giving more months of grace to non-paying debtors.
The New Arbitration Act, entered into force on 1st January 2018 has introduced major changes in the field of interim measures in arbitration proceedings in Hungary, rarely used in practice. Whether these changes will make interim measures more popular in arbitration proceedings in the future?
Besides having a website, vast majority of businesses have company pages on the social networks like Facebook, Linkedin, etc. Do you become a data controller, being primarily responsible for data processing, if you get “only” statistical information of your visitors? The Court of Justice of the European Union addressed this question in its recent ruling.
In the last months preceding the entering into force of GDPR, the market was inundated with various service providers promising data protection compliance: data protection experts, counsels, IT experts, etc. Besides these providers, lawyers and law firms, experienced in the field of data protection also provide GDPR compliance services. We summarize the reason why you should involve them in your GDPR compliance project.
Do you need re-confirmation of client consent already given in each case because of the GDPR? Before sending thousands of e-mails to clients in your database to obtain their consent again, read our article to avoid throwing the baby out with the bath water!
Businesses come, businesses go, and there are times when you reach a point when you decide it is better to finish your business in Hungary. Similar to creating a company, closing a company is also a legal procedure at the court of registration. You will need professional help in this issue: a lawyer and an accountant. Let’s see how it goes.
Can illegal recordings be used at court as evidence? What is more important: the protection of a voice recording, as a personal data, or the professional decision of a court case, in which the illegal recording is used as evidence? These questions were addressed in the Hungarian Supreme Court’s latest ruling.
How often did the Hungarian Data Protection Authority impose penalties in the last five years? What was the average amount of penalties? Will be there any change after 25th May 2018, when the GDPR comes into force? We addressed these questions in our presentation made at BELGABIZ.
Can the raw material supplier be liable for defects, if the specification is incomplete, but he knows what the end-product is? Who has to prove this under the Vienna Convention on the International sale of goods? These questions were decided by the Hungarian Supreme Court in the case of our Italian client, against a Hungarian company.
Auchan Hungary started this year with a HUF 15 Million data breach fine for operating CCTV at workplace in breach of data protection principles. Given that CCTV lies in the heart of GDPR entering into force in May 2018, it is worth to learn from the Auchan case so that you can avoid a similar penalty in Hungary.
Can the employer open files on employee’s company notebook in a folder entitled “personal data”? Can the employer fire the employee if he founds a ton of sexual content? These were the key questions in the case Libert vs. France in front of The European Court of Human Rights. Read our article in which we summarise the judgment.
Almost 4 years after the deletion of usufructs on agricultural lands of foreign investors in Hungary, the European Court of Justice ruled that the Hungarian Land Act breaches the free movement of capital. What are the reasons of the judgment? What can do those who suffered damage, but has not yet started litigation? We summarize the judgment and its consequences.
The above question emerged in front of the Curia (Hungarian Supreme Court) in a case where the basic issue was whether the Hungarian freight forwarder shall check the shipment taken over from the Chinese seller at loading, and if he is liable for the damage sustained by the buyer because there was a different product in the closed container.
When, why and how can you start liquidation procedure against your non-paying customer in Hungary? How long can you register your claim? What are the chances that you get your money in liquidation? We summarized the 6 must-knows of liquidation procedures in Hungary in this article.
Data protection authorities can impose administrative fines up to 20 Million Euro based on the EU GDPR. But what affects the actual amount that you have to pay in case of infringement? And how can you minimize the risk of an astronomic penalty? We gathered some hints in our latest article.
The new Hungarian Arbitration Act, entered into force on 1st January 2018 has reshaped the institutional landscape of Hungarian arbitration, and introduced some noteworthy changes in arbitral proceedings in order to increase the international competitiveness of Hungarian arbitration. We sum up the most important changes in this article.
From 2018 the small claim collection rules are changing in Hungary, and foreign creditors must comply with residency conditions so that they can start payment warrant procedure. At the same time, businesses do not have to waste time before starting litigation. Read our summary to know more on this topic!
When it comes to the sanctions under the EU General Data Protection Regulation, everybody speaks about the astronomic penalties up to 10-20 Million Euros, however, it is only one of the 10 corrective measures of the data protection authority. And in some case complying with non-financial corrective measures can be much more painful than simply paying penalty. So, we present the 9 non-financial corrective measures in this article.
Unlike the Hungarian Constitutional Court, who thinks not paying interest for money blocked on security deposit during a 10 years’ litigation is fine, the judges of the European Court of Human Rights seem to be closer to the business world, based on their recent ruling against Hungary. If you want to know how they calculate interest and compensation, do not miss our latest update!
From 2018, the threshold of the mandatory small claims regime is increased to HUF 3 Million in Hungary. In addition, foreign creditors must meet further residency conditions to start this cost-effective on-line debt collection method. But what to do if you do not meet these conditions? Read our latest article for the answer!
It is hard to find anyone not using cloud services these days, but you might not think about the issues arising due to the storage of data in the cloud. If you want to choose the proper cloud service provider and avoid the huge fines of the European General Data Protection Regulation (GDPR), read this article, in which we gathered the key legal considerations before jumping into a cloud contract.
The D-Day of entering into force of the European General Data Protection Regulation (GDPR), 28th May 2018, is getting closer but the vast majority of Hungarian Small and Medium Sized enterprises is yet unprepared for the changes. For this reason, it was a perfect timing to organize a seminar by the Belgian Business Club in Hungary, where our managing partner Richard Schmidt was invited as a guest-speaker.
We are members of International Law Firms (ILF) a worldwide network of small & medium sized law forms around the world, with around 70 members from 50 jurisdictions. The goal of ILF is improving client service in cross border business legal issues. Every year there are annual and regional conferences where we can share our experiences, meet new people, new viewpoints, and make our community better.
An unsigned contract can cause serious problems, if any of the parties dispute its content later by ‘cherry picking’ contract terms. Nowadays, when the vast majority of commercial contracts is negotiated via e-mails, and parties often forget to sign hard copies, the risk is higher than in the good old times. Fortunately, the recent ruling of the Supreme Court in one of our clients’ case gives clear guidance in this issue.
The transfer of business shares in Hungarian Limited Liability Companies is an under-regulated domain of Hungarian company law, however there are some “opt-out” and “opt-in” restrictions that shareholders should bear in mind if they want to set up a working shareholders’ structure. We summarise the must-knows of this topic in this article.
Purchasing a property in Hungary can turn into a nightmare if you become aware after takeover that your apartment suffers from hidden defects. What can you do if you become aware of these defects only years after takeover? What kind of rights do you have and how long can you enforce those rights against the seller in Hungary? We will address these issues in the present article.
In a fast-changing legal environment like Hungary, you should always check whether your legal situation has been changed by reason of a new legislation, because courts tend to decide based on current legal environment if nobody invokes the principle of prohibition of retroactive justice.
Doing business also means a lot of paper work. When signing company document in Hungary, it is important that the signature should not have any fault, because it may result in an invalid document, and can cause a loss of time and money. To avoid wasting time and money for administrative mistakes, read the must-knows we gathered in this article.
If you want to use an apartment or flat as a seat of your company in Hungary you have more options, but be aware: the authority regularly checks the legal basis of the use of the company’s seat. At the same time, the careful planning of the use of company seat may help you to optimize your tax, so let’s see what kind of legal opportunities you have when you want to legally use your company seat.
Creating a company in Hungary became very convenient and fast nowadays. However, there are some extra requirements for foreigners that can make this simple procedure longer and problematic, especially in the field of official documents issued and/or signed abroad. To avoid unpleasant surprises, we tell you the four most important thing you need to keep in mind as a foreigner when setting up your company in Hungary.
When planning to establish a company in Hungary, the corporate name is always a crucial question. We know that it is hard to come up with a good idea that fits your style and the goal of the organization. Yet, all that effort is just a waste of time, if the name does not comply with the requirements of Hungarian law. So we share the most important points to keep in mind when thinking about a company name.
What is enough basis for a Hungarian judge to issue a freezing injunction? Is the preliminary hearing of the parties obligatory before issuing the court order? What are the costs and time frame of the procedure?
What kind of freezing injunctions can be sought in Hungarian business litigations, and what are their effects to the defendant?
Nothing is worse than a won court battle, if during litigation the defendant had time to dissipate its assets. To prevent this in a Hungarian business litigation, you can seek a freezing injunction, and your defendant cannot frustrate the judgment when it comes to enforcement. If you want to know the details read further this article, which is the first part of a three-part article series in this matter.
Imagine the situation that you have a non-prospering company without perspectives. The mass of non-paid invoices is just bigger and your company cannot pay taxes. In this case the best option just to shut down the company and say goodbye to Hungary thinking that you are not liable for your company’s debts. However, the situation is not so simple, and leaving just the company behind may be risky. In this short summary we summarise the legal aspects of company shutdown which is worth to read before the “close-shop”.
A minority shareholder often finds it hard to protect his interest without real decision-making power in the shareholders’ meeting. At the same time Hungarian company law offers a wide range of protective measures that every minority shareholder should know inside and out, in order to effectively safeguard its investment. We summarise these legal tools in this article.
If you would like to fire an employee, but the conduct of the employee does not exceed a certain the limit that justifies extraordinary termination, the only way under Hungarian Labour law to dismiss him is the ordinary termination. Given that a wrongful termination can have serious financial effects, it is worth to summarise the 5 must-knows for an employer in relation with ordinary dismissals, including the case law of Hungarian Labour courts.
Although, liquidation is one of the most powerful debt collection tools in Hungary for recovering solid claims, creditors often make mistakes that give rise to unfavourable court decision, declining liquidation request and directing the claim towards ordinary courts. Given that this means loss of valuable time, we gathered those common mistakes that you should avoid by any means.
In most jurisdictions starting liquidation or bankruptcy against a non-paying debtor might be the very last step after having exhausted all other less threatening debt recovery methods. Although the result of the liquidation is the total financial destruction of debtor, this is a very popular debt recovery tool in Hungary for those creditors who have solid claim and would like get their money fast. We summarise details in this article.
The transfer of business shares in Hungarian Limited Liability Companies is an under-regulated domain of Hungarian company law, however there are some “opt-out” and “opt-in” restrictions that shareholders should bear in mind if they want to set up a working shareholders’ structure. We summarise the must-knows of this topic in this article.
One of the largest business risk is an employee who leaves the company with the information and know how acquired during his employment. Business owners should think about protecting their business in advance, before it is too late. We summarize the key points of non-compete clauses under Hungarian law in this résumé.
Your worst nightmare as logistic provider in Hungary is a situation when your carrier blocks or sells the shipment due to an unpaid invoice. This is even worse if the invoice in question is unfounded but you decide to pay it to prevent further problems as dissatisfied customers, and the like. To avoid this situation, you have to know the 5 most important tips for subcontractor claim handling under Hungarian law, that we gathered in this article.
In this short summary we tell the 5 must–know tips that a creditor should bear in mind before starting collecting debt in Hungary. There are different legal ways available, and by answering these questions you will be able to find the legal way that best matches your interests.
Arbitration is more and more popular way of settling business disputes worldwide, and in the past few years Hungary follows the same trend. In this article we summarize the pros and cons of arbitration in Hungary as compared to the litigation before state courts.
In the first part of this article we shared some useful information about civil and commercial litigation in Hungary, such as how to find the competent courts, what are the main costs of litigation and what are the types of evidences in the procedure. In this part we sum up what kind of judicial remedies are available in Hungary if the decision of the court is not favourable. Besides presenting the situations in which the remedies are available, we summarise the costs and deadline for lodging these complaints.
In this article we summarize the key-points of the limited liability company (LLC) formation in Hungary according to New Hungarian Civil Code. By presenting the main features of the Hungarian LLC, we show why it is the favourite company form among foreign investors, and after we outline the most important steps and costs of the company formation procedure.
Civil or commercial disputes often arise, and when they cannot be resolved through negotiation they turn into litigation before courts. In this article we share some useful information about civil and business litigation in Hungary.
Finding the most appropriate company form is essential for every business. Hungarian company law offers a wide range of company forms available for foreign entrepreneurs and investors. We prepared this summary to help you to find the form that mostly fits your business goals.