201904.08
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Enforcement of Foreign Court Decisions Under the Hungarian Legislation – publication of dr. Péter Nógrádi

Recently, the International Section of the New York State Bar Assocciation issued its publication, the International Law Practicum (2018, vol. 31., no. 2.), which focuses on the enforceability of foreign judgments in jurisdictions around the world. In this publication the applicable provisions of Hungarian law is presented by dr. Péter Nógrádi. Please find below a short summary of these rules:

When it comes to recognizing and enforcing a foreign civil law judgment in Hungary, several legal application and practical legal questions arise as to whether such judgement was given in a criminal or a civil procedure.

When enforcing foreign judgements in Hungary, the laws of three different jurisdictions are applied simultaneously. (A) Hungarian domestic laws, including jurisprudence, (B) relevant legal acts of the European Union, and (C) international legal documents, such as bilateral or multilateral international treaties and conventions.

The acknowledgement and enforcement of the foreign court decisions is a widely regulated field of law in Hungary, though the courts usually encounters some application and practical uncertainties. Even in our practice, we have faced cases in which the court was not sure how a foreign court decision should have been handled. In our opinion, this uncertainty is caused by the intersection of domestic and international legal acts which are to be applied simultaneously. Fortunately, from our perspective, as time goes by and the courts handle more and more foreign decision cases, the abovementioned uncertainties will become rare. In addition, we hope that the adaptation and application of the EU laws will be unambiguous for the courts and lawyers of Hungary.

Domestic laws

Enforcing foreign judgements in Hungary is governed by Act XXVIII of 2017 on the International Private Law (hereinafter referred to as the International Private Law Act) and Act LIII of 1994 on the judicial enforcement (hereinafter referred to as the Enforcement Act).

The International Private Law Act regulates the general and basic rules and conditions for recognizing foreign judgements, at first generally, and then it establishes some special provisions for property law cases, family law cases and cases affecting personal status. In relation to this law, it must be noted that it is applied in matters which do not fall within the scope of the generally effective and directly applicable legal act of the European Union or international treaty.[i] The Enforcement Act includes the basic and special procedural rules regarding the acknowledgement and enforcement of foreign judgements.

EU laws

The main legal act governing this subject is the Regulation (EU) No 1215/2012 of the European Parliament and of the Council on the Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Brussels I). This regulation superseded the previous Brussels I regulation, Council Regulation (EC) No 44/2001 of 22 December 2000 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. It must be noted that 1215/2012/EU Regulation shall be applied to cases where the procedures started after 10 January, 2015, while 44/2001/EC Regulation shall be applied to procedures commenced before that date. Besides those main regulations, the EU has other laws governing enforcement of foreign judgments regarding different, specific legal areas.[ii]

International legal acts

Hungary is signatory to several international conventions and treaties concerning enforcement of foreign judgements. Among several other international conventions and treaties, the following are the most important:[iii]

  • Hague Convention of 1 March, 1954 on Civil Procedure;
  • Hague Convention of 15 April, 1958 concerning the Recognition and Enforcement of Decisions–Relating to Maintenance Obligations Towards Children;
  • Hague Convention of 15 November, 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters;
  • Hague Convention of 25 October, 1980 on the Civil Aspects of International Child Abduction;
  • Convention on Recognition and Enforcement of Foreign Arbitral Awards, New York 10 June, 1958;
  • Convention on Recovery Abroad of Maintenance, New York 20 June, 1956.

Foreign court decisions, requirements of recognition, grounds of refusal

 Requirements

Within the meaning of the International Private Law Act, a decision shall mean (1) judgments given in civil law cases by regular foreign courts, (2) awards passed by foreign arbitration tribunals and (3) other decisions by any other foreign authority acting and issuing final decisions (hereinafter are jointly referred to as courts).

Foreign court decisions are recognized in Hungary if the decisions meet the following legal requirements:[i]

  • The jurisdiction of the foreign court that proceeded in the case is in compliance with the applicable rules of the International Private Law Act;
  • The decision given is final and binding, or has equivalent legal effect (meaning formal validity, such decision cannot be appealed) as per the foreign law under which it was passed; and
  • There is no ground for refusal as per Section 109 (4) of the International Private Law Act. (see later)

In addition to the above, it has to be noted that settlements reached in foreign courts or other authorities acting in civil cases shall be recognized and enforced under the same conditions, which are applicable to the decisions of foreign courts or other judicial authorities.[ii]

In addition to the above, there are special rules applicable to specific areas, such as property-related matters in which case reciprocity is an additional condition for enforcement, family law and personal status matters (which include special grounds of jurisdiction).

It must be emphasized that the EU and international laws may stipulate different requirements which shall be met by specific foreign decisions for which enforcement has been requested. International treaties and EU laws have priority over the provisions of the International Private Law Act. In connection with this, the International Private Law Act has a special, auxiliary provision, according to which, with respect to a given foreign decision, the recognition and enforcement of the decision of a foreign court is governed by international treaty concluded by Hungary (but not by the European Union). If the decision is not in compliance with the relevant provisions of the applicable international treaty, the decision will be recognized and enforced if it complies with the requirements specified by the International Private Law Act. For the purposes of this rule, reciprocity between Hungary and the foreign nation will be considered as granted.[iii]

Grounds of refusal

As mentioned before, Section 109(4) of the International Private Law Act sets forth the rules when the recognition of a foreign court decision shall be refused. Such reasons include:

  • Recognition of the decision would be against the public order;
  • The party against whom the decision was made did not attend the proceeding, neither personally nor by proxy, because the document based on the proceeding was initially written and not delivered to the address or habitual residence of such party in a way and at such time as is appropriate to enable the party to prepare a defense;
  • The proceedings regarding the subject of the same right originating from the same factual basis, regarding the same parties have been commenced before initiating the foreign proceedings;
  • A Hungarian court or another authority has already resolved a final decision about the same right originating from the same factual basis, regarding the same parties; and
  • A court of a foreign state other than the state of the foreign court resolving the decision has already resolved a final decision about the same right originating from the same factual basis, regarding the same parties that is fulfilling the requirements of recognition in Hungary.

The court will examine ex officio if the decision is against the public order, however, further grounds for exclusion shall be deemed absent unless proven otherwise. In this regard, the defendant has the right to refer to these grounds in a non-litigious procedure aiming the recognition of the foreign decision.

With regard to the refusal, we note that EU laws and international laws determine other grounds for the refusal of specific foreign decision.[iv]

Procedural rules

Recognition of a foreign decision does not require a separate procedure unless otherwise stipulated by law. Recognition is examined ex officio by the Hungarian court or authority during the procedure in which the question of recognizability arose.[i] However, the party concerned[ii] may request a special court procedure for the recognition of a foreign decision in Hungary. In such cases, the courts make their decision in non-litigious procedures.[iii]

A decision of a foreign court meeting the preconditions of recognition in Hungary may be enforceable.

The decision of a foreign court or an award of an arbitration tribunal may be executed through the same procedure as a Hungarian court decision or arbitration award pursuant to the rules recorded in Chapter XII of the Enforcement Act.[iv] While enforcing a foreign resolution, the provisions set forth in specific other legislation and in the international conventions shall also be applied, and jurisprudence based on reciprocity shall also be taken into consideration.[v]

A foreign decision shall be enforced based on an act, international treaty or reciprocity.[vi] If a decision is delivered in a civil or administrative case, or in a criminal case provided that it includes a civil law obligation, or it is based on a settlement approved by the court,[vii] the decision must meet the following fundamental conditions:[viii]

  • It is final and binding (or having equivalent legal effects) or subject to preliminary enforcement;
  • It contains an obligation; and
  • The deadline for performance of the obligation has expired.

If the judgment in question is considered enforceable, the respective Hungarian court shall certify this fact with a “confirmation of enforcement.”[ix] This decree provides that the foreign decision shall be enforced in the same method as a Hungarian court judgment/arbitration award.

Generally, an appeal may be submitted to the court of second instance to object to the decree of the Hungarian court.[x]

Regarding the court decisions passed in EU member states, in proceedings initiated as of 10 January, 2015, the Brussels I regulation is applicable, based on a judgment given in an EU member state. The judgment is enforceable in that EU member state and shall be enforceable in the other EU member state without any declaration of enforceability being required. In addition to this, we also note that there are some other EU rules  in which no recognition is required for the enforcement of decisions drawn in an EU member state in procedures falling under the scope of these laws.[xi]

Endnotes

[i]2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[ii] This wording suggests that recognition cannot only be sought by a person who participated in the proceedings before the foreign decision, but also by anyone who has a legal interest in the recognition of the decision.

[iii] 2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[iv] 2017. évi LX. törvény a Választottbírósági (Act LX of 2017 on Arbitration)

[v] Id.

[vi] Id.

[vii] Id.

[viii] Id.

[ix] Id.

[x] 2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[xi] For example, the EU laws listed in endnote No. 2


[i] 2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[ii] 2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[iii] 2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[iv] For example:

Council Regulation (EC) 44/2001: the foreign judgment resolved in an EU Member State cannot be recognized in Hungary if:

–             it is irreconcilable with a judgment given in a dispute between the same parties in Hungary;

–             it is irreconcilable with an earlier judgment given in another EU Member State or in a third State involving the same cause of action and between the same parties, provided that the earlier judgment fulfils the conditions necessary for its recognition in Hungary;

–             it conflicts with sections 3 [Jurisdiction in matters relating to insurance], 4 [Jurisdiction over consumer contracts] or 6 [Exclusive jurisdiction] of Chapter II, or in a case provided for in Article 72 of Council Regulation (EC) 44/2001.

Regulation (EU) No. 1215/2012: the foreign judgment resolved in an EU Member State cannot be recognized in Hungary if:

–             it conflicts with sections 3 [Jurisdiction in matters relating to insurance], 4 [Jurisdiction over consumer contracts] 5 [Jurisdiction over individual Hungary–11contracts of employment] of Chapter II, where the policyholder, the insured, a beneficiary of the insurance contract, the consumer or the employee was the defendant, or with section 6 [Exclusive jurisdiction] of Chapter II.

[i] 2017. évi XXVIII. törvény a Nemzetközi Magánjogról (Act XXVIII of 2017 on Private International Law) (Hung.).

[ii] Including but not limited to:

  • Regulation (EC) No 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure
  • Council Regulation (EC) No 4/2009 of 18 December 2008 on jurisdiction, applicable law, recognition and enforcement of decisions and cooperation in matters relating to maintenance obligations
  • Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000

[iii] In Hungary, the sources of international law, other than the generally acknowledged rules of the international law, become part of the Hungarian legal system with their promulgation by law.


Originally published in volume 31, number 2 of the International Law Practicum (2018), a publicaiton of the International Section of New York State Bar Association.

Please note that the above publication is under the copyright of Nógrádi Law Office. Unauthorized use and/or duplication of this material without express and written permission from Nógrádi Law Office is strictly prohibited.