Act LX of 2017 on Arbitration ("Act") shall come into force on January 1, 2018. The Act will replace the previous arbitration act that was first adopted in 1994.

New competence, new name

The Act delegates all commercial cases handled by the permanent court of arbitration in Hungary to the competence of the Court of Arbitration attached to the Hungarian Chamber of Commerce and Industry excluding commercial cases within the competence of the Permanent Court of Arbitration for Sports and the Court of Arbitration maintained by the Chamber of Agriculture.

The Act names the new, integrated permanent arbitration court as the Court of Commercial Arbitration and creates its new rules of proceedings. The Permanent Court of Commercial Arbitration also replaces the Permanent Court of Arbitration for Money and Capital Markets and the Permanent Court of Arbitration for Energy effect, both folding their operation as of December 31, 2017.

New possibilities

The Act, in comparison with the previous law, introduces some changes in order to improve the flexibility of the arbitration proceedings.

  • It creates the possibility that the parties may request the renewal of the procedure within one year from the delivery of the court ruling if in the course of the main proceedings the party requesting the renewal failed to validate a fact or evidence without any fault on his part, the evaluation of which would have resulted in a more favorable or preferable court ruling for the petitioner.
  • The Act allows intervention by third parties and non-contractual arbitration agreement parties may appear as parties in the proceedings with similar rights and obligations as those granted to the parties to the arbitration agreement.
  • The newly introduced regulation of interim measures and preliminary rulings are intended to improve the efficiency and flexibility of arbitration proceedings in Hungary.

Compulsory changes

According to the Act in cases where the contracting parties stipulated the competence of any of the two terminated arbitration courts, this clause automatically replaces the competence of the Court of Commercial Arbitration.

The Hungarian Chamber of Commerce and Industry is due to amend the Deed of Foundation of the Court of Commercial Arbitration until January 31, 2018. The same date should be respected by the Court of Commercial Arbitration for adopting its own rules of proceedings and publishing the list of recommended arbitrators on its website.

Pursuant to the Act, arbitrators over the age of seventy cannot be included in the official roster of recommended arbitrators. The restriction does not mean that the parties cannot appoint arbitrators who have already turned seventy years of age.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.