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Written By: Dr. Szabolcs Hargittay and Dr. Zsolt Füsthy

Füsthy & Mányai Law Office

(Budapest, Hungary)

 

Legal background:

According to Section 62/F (1) of Law-Decree No. 13 of 1979 on International Private Law (hereinafter referred to as Law-Decree) in respect of property-related legal disputes and in contract law concerning any potential legal disputes in connection with a specific legal relationship, the parties may include a governing law clause or may stipulate the jurisdiction of a specific court. Parties may make such clause or stipulation:

a) in writing;

b) verbally, if confirmed by writing;

c) in a form that satisfies the established course of dealing between parties; or

d) in international commerce, in a form that conforms to trade usage with which the parties are or should have been familiar and that are generally known and regularly applied by the parties of these particular types of contracts in the business sector in question.

Pursuant to Section 73 (1)-(2) of Law-Decree the Minister of Finance shall issue a statement concerning the reciprocity described in Paragraph c) of Subsection (1) of Section 72, and such statement shall be binding on courts and other authorities.

A state of reciprocity shall not influence recognition of

a) an official foreign decision concerning personal status;

b) an official decision concerning property, if the jurisdiction of the foreign court making the decision had been stipulated by the parties in compliance with the provisions laid down in Sections 62/F and 62/G.

 

Decision of the High Court:

In a recent case in Hungary the High Court had to examine whether the parties had stipulated the jurisdiction of a specific court. In this particular case the Plaintiff referred to a court decision which decision had been passed in Delaware State. The Plaintiff wanted to enforce the abovementioned decision before a Hungarian court.

The High Court ruled that no reciprocity had been established between Hungary and United States in connection with the acknowledgement and enforcement of the court decisions. Furthermore, the High Court ruled that according to the Hungarian procedural law the burden of proof had been upon the Plaintiff. Therefore the Plaintiff should have proven that the jurisdiction of the specific court had been validly stipulated between the parties. The Plaintiff had failed to do that so the High Court rejected its claim.



Summary:

A decision of a foreign court in proprietary cases can be executed in absence of reciprocity if the parties agreed on the jurisdiction of the court and if this agreement does fulfill the requirements of an agreement due to the commercial practice of the parties.

 

For more informatoin on Füsthy & Mányai Law Office, please visit the International Society of Primerus Law Firms or www.fusthylawoffice.hu.