New Arbitration Act just adopted in Hungary


On 30 May 2017, the Hungarian Parliament adopted a new Hungarian Arbitration Act replacing the current law that has been in force since 1994. Although the new rules will still be based on the UNCITRAL Model Law (following the 2006 UNCITRAL text), the new law will also bring significant structural changes to Hungarian commercial arbitration. The new Arbitration Act enters into force on 1 January 2018, and will apply to all arbitration proceedings in Hungary commenced after such date.

The new regime introduces important changes as to the provisions governing arbitral proceedings. In line with the amendment of the UNCITRAL Model Law in 2006, the new Arbitration Act sets out more detailed rules on interim measures ordered by arbitral tribunals. Further, the new law allows for interveners (i.e. external parties having legal interest in the outcome of the arbitration) to join the proceedings and support one of the parties, including the right to submit motions for evidence. Further, the new Arbitration Act even enables external parties not partaking in the arbitration agreement to join the arbitration proceedings as parties, if their claim (or the claim raised against them) cannot be decided separately from those claims being adjudged in the arbitration proceedings. As another brand new procedural feature, borrowed from civil litigation proceedings, the new regime provides for the possibility of retrial of arbitration cases, based on facts or evidence which were not taken into account during the original proceedings for any reason not attributable to the party relying on them. The new regime expressly addresses the situation triggered by the setting aside of arbitral awards, providing that in such case the parties shall appoint arbitrators for the repeated proceedings (if any).

Still, the most meaningful change will be that the new Arbitration Act introduces a brand new institutional framework for Hungarian commercial arbitration. From 1 January 2018 the newly established 'Commercial Arbitration Court’ will act as the permanent arbitration court with general jurisdiction in Hungary on an exclusive basis replacing all other institutions that are presently active (except for the arbitration courts for sports and agricultural disputes). This means that the new Commercial Arbitration Court will be the legal successor of the Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, while other currently existing permanent arbitral fora, such as Energy Arbitration Court and the Money and Capital Market Permanent Court of Arbitration, will cease to exist as from 1 January 2018. Arbitral proceedings already initiated and pending as on 1 January 2018 will be transferred to the Commercial Arbitration Court. It will remain possible under the new law to conduct ad hoc arbitrations proceedings in Hungary.