Preliminary Remarks. The PILA-2017 introduces some changes in comparison to the rules currently in force.

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1 Preliminary Remarks 1. On 11 April 2017, the new Hungarian Private International Law Act (Act XXVIII of 2017), adopted earlier by the Hungarian Parliament, was promulgated (henceforth PILA-2017). (See the text in Volume IV.) The PILA-2017 will enter into force on 1 January 2018and will fully replace the decree-law of 1979 (PILA) that currently regulates private international law. The adoption of the PILA-2017 was justified by the economic and social changes that occurred since then. The drafting process was based on extensive comparative research and the drafters also paid attention to recent developments in EU private international law. The PILA-2017 (like PILA) covers the determination of the applicable law, jurisdiction, recognition and enforcement of foreign decisions as well as other aspects of international civil procedure. 2. The PILA-2017 introduces some changes in comparison to the rules currently in force. The General Part deals with certain questions not regulated previously: application of the law of states having more than one legal system, overriding mandatory provisions and changes in the circumstances which 1/159

2 determine the governing law. As a novelty, the General Part also contains a general escape clause: if, based on the circumstances of the case, it is obvious that the case is substantially more strongly connected with a law other than the law designated by virtue of the Act, the court may exceptionally apply this law. In addition, a general subsidiary choice of law rule provides that, if the Act does not contain a specific choice of law rule for a legal relationship that is otherwise covered by the Act, the law of the state will apply with which that relationship is most strongly connected. The Special Part of the PILA-2017 extends equally to certain issues which were not regulated earlier, such as the (restricted) freedom to choose the applicable law in property matters for spouses and (registered) partners or the determination of the law applicable to illegally exported cultural property. Jurisdictional rules as well as the provisions on recognition and enforcement of decisions have been restructured and divided into general and special provisions (such as the rules on matters involving an economic interest and matters concerning family law and personal status). Law-Decree No 13 of 1979 on Private International Law2 Chapter I General Rules Purpose and Scope of Application of the Decree-Law 2/159

3 Section 1 The purpose of this Decree-Law is, in the interest of the development of peaceful international relations, to determine: the law of which state is to be applied if a foreign person, asset or right (hereinafter: foreign element) is involved in a civil law, family or labour law legal relationship and the laws of several states would be applicable, the jurisdiction and procedural rules to be followed in a legal dispute containing a foreign element. Section 2 This Decree-Law does not apply to any question regulated by international treaty. Legal Qualification Section 3 If the legal qualification of the facts or relationships to be judged in a legal dispute from the aspect of the determination of the applicable law is disputed, the interpretation of the rules and concepts of Hungarian law governs. If Hungarian law does not know a legal institution or knows it with different content or under another name and it wcannot even be determined by the interpretation of the rules of Hungarian law, in the legal 3/159

4 qualification the foreign law regulating the legal institution must also be taken into consideration. Reference Back to the Applicable Law Section 4 If, pursuant to this Decree-Law, foreign law is to apply, the rules of the applicable foreign law directly settling the question concerned shall govern. If, however, the foreign law refers back to Hungarian law in the question concerned taking into account this rule Hungarian law shall apply. Establishment of the Content of Foreign Law Section 5 The court or other authority inquires into a foreign law not known to it ex officio, if necessary, obtains an expert opinion and may also take into consideration the evidence submitted by a party. At the request of the court or other authority, the minister in charge of justice provides information on foreign law. (3) If it is impossible to establish the content of foreign law, Hungarian law shall apply. Reciprocity 4/159

5 Section 6 Unless otherwise provided by law, the application of foreign law does not depend on reciprocity. If a law renders the application of foreign law dependent upon reciprocity, the existence of reciprocity will be presumed until the contrary is proved. If a law requires proof of reciprocity, the minister in charge of justice provides a statement binding upon the court and other authorities regarding the existence of reciprocity. Disregard of the Application of Foreign Law Section 7 The application of foreign law must be disregarded if it violated Hungarian public order. The application of foreign law cannot be disregarded merely because the social and economic system of the foreign state differs from the Hungarian one. (3) In place of the disregarded foreign law, Hungarian law shall apply. 5/159

6 Section 8 A foreign law which is connected to a foreign element created by the parties artificially or by simulation for the purpose of circumventing the law otherwise applicable may not be applied (fraudulent connection). In case of fraudulent connection, the law otherwise applicable in accordance with this Decree-Law shall apply. Section 9 If the parties request disregard of the foreign law applicable in accordance with this Decree-Law together, in its place Hungarian law or in case of the possibility of choice of law, the law chosen shall apply. Chapter II Persons Human being as Subject of Law Section 10 An individual s legal capacity, disposing capacity and, in general, his personal status and personal rights shall be adjudged according to his personal law. Regarding the bearing of a name, the individual s personal law shall apply. Upon request of the person concerned, in the 6/159

7 course of the registration of a birth name the law of that other state shall apply of which citizenship is also held by him; in this case Subsection of Section 11 shall not apply. (3) Regarding claims arising from the violation of personal rights, the law applicable in the place and at the time of the violation of rights shall apply; if, however, Hungarian law is more favourable to the injured person in respect of the damages or reparation, the claim shall be adjudged according to this law. Section 11 An individual s personal law is the law of the state of his citizenship. A change in citizenship does not affect the former personal status and the rights and obligations created on the basis thereof. If a person has multiple citizenships and one of his citizenships is Hungarian, his personal law is Hungarian law. (3) The personal law of a person who has multiple citizenships none of which is Hungarian, as well as the personal law of a stateless person, is the law of the state in whose territory his domicile is located, or Hungarian law if he also has a domicile in Hungary. The personal law of a person having multiple domiciles abroad is the law of the 7/159

8 state with which he has the closest relationship. (4) If a person s personal law cannot be established on the basis of the previous subsections and he has no domicile, his personal law will be determined by his habitual place of residence. The personal law of someone having more places of habitual residence one of which is in Hungary shall be Hungarian law. Section 12 Domicile is the place where someone lives permanently or with the intention of settling there. The place of habitual residence is the place where someone stays for a longer period of time without the intention of settling there. Section 13 Regarding the personal status of a person enjoying the right of asylum in Hungary, Hungarian law will apply; this provision does not affect the former personal legal status and the rights and obligations created on the basis thereof. Section /159

9 Regarding economic activity, producer or trading (hereinafter: economic) quality of a private person, the law of that state shall apply in whose territory the economic operation was authorised. If the authorisation of the economic operation was not required or the operation was authorised in several states, regarding the economic quality the law of that state shall apply, in whose territory the central administration of his economic activity is located. Section 15 Regarding the legal capacity and disposing capacity of a foreign citizen and a stateless person as well as to his personal and property rights and obligations, the same rules shall apply as to domestic persons, unless otherwise provided by law. A non-hungarian citizen who has no disposing capacity or has restricted disposing capacity according to his personal law shall be regarded as a person having disposing capacity in terms of his property transactions concluded in Hungary within the sphere of covering the usual needs of every-day life if he would have disposing capacity according to Hungarian law. (3) 9/159

10 A non-hungarian citizen who has no disposing capacity or has restricted disposing capacity according to his personal law but would have disposing capacity according to Hungarian law shall be regarded as a person having disposing capacity also in terms of his other property transactions if the legal consequences of the transaction are to arise in Hungary. Section 16 Regarding a declaration of death or a missing person as well as establishing the fact of death, the law which was the missing person s personal law shall apply. If a Hungarian court declares a non- Hungarian citizen dead or missing or establishes the fact of the death of such a person for domestic legal interest, Hungarian law shall apply. The State as Subject of Law Section 17 Regarding the legal relations of the Hungarian state falling under the scope of application of this Decree-Law, its own law shall apply, unless a) 10/159

11 the state expressly consented to the application of foreign law, or b) the legal relation concerns immovable property located abroad owned or intended to be acquired by the state, or c) the legal relation concerns participation in an economic organisation of foreign interest. Subsection may only apply to a foreign state in case of reciprocity. Legal Persons Section 18 The legal capacity, economic quality, personal rights of a legal person and the legal relationships between the members thereof shall be adjudged according to its personal law. The personal law of a legal person is the law of that state in whose territory the legal person was incorporated. (3) If a legal person is incorporated according to the laws of more than one state, or no incorporation is required according to the law applicable at the place of the seat indicated in 11/159

12 the statute, its personal law shall be the law applicable at the place of the seat indicated in the statute. (4) If a legal person has no seat according to its statute, or has several seats and is not incorporated in accordance with the law of any of those states, its personal law shall be the law of that state in whose territory its central administration is located. (5) [Repealed] Chapter III Intellectual Property Law Copyright Law Section 19 Copyright shall be adjudged according to the law of that state in whose territory the protection is claimed. Industrial Property Right Section 20 An inventor and his legal successor shall receive protection according to the law of the state and in the state in which the patent was granted or where the application was made. The rule contained in Subsection also duly applies to other industrial property rights 12/159

13 (industrial design right, trade mark, etc.). Chapter IV Property Law and Other Rights in Rem Section 21 Unless otherwise provided by this Decree- Law, the law applicable at the place of the location of a thing shall apply to the property right and other rights in rem as well as to pledge (mortgage, lien) and possession. The law applicable at the place of the location of a thing is the law of that state in whose territory the thing is located at the time of the emergence of the fact giving rise to the legal effect. Section 21/A Regarding the property right and other rights in rem related to a security registered in a custodial account or to a dematerialized security, the law of that state is to apply in whose territory that securities account or securities custodial account is managed in which crediting was effected on behalf of the proprietor or holder of another right in rem. Where foreign law refers to Hungarian law on the question concerned, such reference shall be disregarded. Section /159

14 Regarding adverse possession of chattel property, the law of that state shall apply in whose territory the thing was located at the time of the expiry of the period of adverse possession. Adverse possession will not be interrupted by a change in the location of the thing in itself. Section 23 The emergence, existence or termination of rights in rem related to a registered watercraft or aircraft shall be adjudged according to the law of that state under whose flag or other insignia the vehicle is operating. The law of the state of the destination shall apply to rights in rem related to goods in transit. However, regarding the legal effects in rem related to the forced sale, storage or pledging of such things the law applicable at the place of the location of the thing will apply. (3) The personal law of a passenger shall apply to the rights in rem related to objects taken along for the purpose of personal use. (4) If the assets of an undertaking (business) devolve upon a legal successor as a whole, the legal changes in rights in rem with the 14/159

15 exception of such legal changes related to immovable property shall be adjudged on the basis of the personal law of the legal predecessor. (5) If the ownership of a thing devolves on the basis of a court ruling or through enforcement, regarding the acquisition of rights the law of that state shall apply whose court rules or whose authority proceeds in the enforcement matter. Chapter V The Law of Obligations Contractual Obligations Section 24 The provisions of Sections shall apply to those contractual obligations which fall outside the scope of application of Regulation (EC) No 593/2008 of the European Parliament and of the Council on the law applicable to contractual obligations. Section 25 Regarding a contract, the law chosen by the parties to the whole or only to a part of the contract at the time of conclusion of the contract or later shall apply. The choice will be made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case. In absence of choice of law, the applicable law will be determined in accordance with Sections /159

16 Section 26 Regarding a contract concluded on the stock exchange, in a public tender or at an auction, the law of that state shall apply in whose territory the stock exchange is located or the tender or the auction is held. The articles of association shall be adjudged according to the law of that state in whose territory the company pursues its activities. Regarding the articles of association establishing a legal person, the personal law of the legal person shall apply. Section 27 Regarding the existence and extent of an obligation based on security, the law of the place of performance shall apply. The creation, transfer, termination and enforcement of contractual rights and obligations based on a bond issued on the grounds of a public loan shall be adjudged according to the personal law of the issuer. (3) If a security grants the right of disposal over goods, regarding the effects in rem the provisions of this Decree-Law on in rem legal relations shall apply. (4) 16/159

17 If a security incorporates a right to membership, the creation, transfer, termination and enforcement of the rights and obligations based on the security shall be adjudged according to the personal law of the legal person. Section 28 Regarding other contracts, in the absence of choice of law, that law shall apply to which the contract is mostly connected based on the relevant elements of the given contractual relationship. Section 29 The law of the contract extends to all elements of the contractual relationship, in particular, to the conclusion of the contract, material and formal validity, contractual effects, and, unless the parties agreed otherwise or unless otherwise provided by this Decree-Law, to the agreements securing the contract, the set-off, cession and assumption of claims related to the contract. If according to the law governing the contract (Sections 25 28) the contract is considered as not valid for formal reasons, the court shall consider the contract as valid if it is valid according to the law of the state of the proceeding court, or the law of that state in whose territory it was concluded or where the intended legal consequences are to arise. (3) 17/159

18 Regarding the prescription of a claim, the law otherwise applicable to the claim shall apply. Section 30 Unless otherwise provided by this Decree-Law, regarding unilateral declarations the rules relating to contracts shall duly apply. Section 31 [Repealed] Non-Contractual Obligations Section 32 The provisions of Sections shall apply to those non-contractual obligations which fall outside the scope of application of Regulation (EC) No 864/2007 of the European Parliament and of the Council on the law applicable to noncontractual obligations. Section 33 Regarding the liability for damage caused outside a contract, the law prevailing at the place and time of the act or omission giving rise to the damage shall apply. If it is more favourable to the person sustaining the damage, the law of that state shall apply in whose territory the damage occurred. (3) 18/159

19 If the domicile of the person causing the damage and the person sustaining the damage are in the same state, the law of that state shall apply. (4) If, according to the law of the place of the act or negligence giving rise to the damage, the condition of liability is the existence of a fault, the existence of the fault may be established either according to the personal law of the person causing the damage or according to the law of the place of the infringement. Section 34 As to whether the conduct giving rise to the damage constitutes a violation of a traffic or another safety rule, the law of the place of the conduct giving rise to the damage shall apply. If the place of the act or omission giving rise to the damage is a registered watercraft or aircraft, to the damage and the consequences thereof outside national territory the law of that state shall apply under the flag or other insignia of which the vehicle was operating at the time of the infringement. Section 35 [Repealed] 19/159

20 Chapter VI Law of Succession Section 36 Legal relationships of succession shall be adjudged on the basis of the personal law of the deceased at the time of his death. This law shall also govern the question regarding to what extent the acquisition of the estate and the disposition of the expected inheritance is admitted. A last will shall be adjudged on the basis of the personal law of the deceased at the time of his death. A last will and the revocation thereof is formally valid if it complies with Hungarian law, or a) the law in force at the place and time of the making and revocation thereof, or b) the law which was the personal law of the deceased at the time of making the last will, the revocation thereof or at the time of the deceased s death, or c) the law in force at the deceased s domicile or habitual place of residence at the time of making the last will, the revocation thereof or at the time of the deceased s death, or d) 20/159

21 in case of a last will concerning an immovable property, the law prevailing at the location of the immoveable property. Chapter VII Family Law Marriage and its Validity Section 37 The substantive legal conditions for the validity of marriage shall be adjudged according to the common personal law of parties to be married at the time of the celebration of marriage. If the personal laws of the parties to be married are different at the time of the celebration of marriage, the marriage is only valid if the substantive legal conditions thereof are satisfied according to the personal law of both parties to be married. Regarding the formal requirements of the validity of marriage, the law in force at the place and date of the celebration of marriage shall apply. (3) [Repealed] (4) The provisions relating to the conclusion of marriage and the validity thereof shall also duly apply to the question of establishing the existence or non-existence of marriage. 21/159

22 Section 38 If a non-hungarian citizen wishes to marry in Hungary, he/she has to prove that there is no impediment to the celebration of marriage according to that person s personal law. In justified cases, the metropolitan and county government offices may grant exemption from the proof. (1a) The proof specified in Subsection, or the request for the exemption from the proof is not required if, according to the personal law of the party to be married, no such proof may be issued. Based on the notification from the minister in charge of foreign affairs or from the foreign representation of the given states, the central registry shall publish a list on its website of the states according to whose law no such proof may be issued. The marriage may not be cedlebrated in Hungary if there is an unavoidable impediment to the celebration of marriage under Hungarian law. (3) (4) [Repealed] Personal and Property Relations of the Spouses Section /159

23 Regarding the personal and property relations of the spouses, including the bearing of the spouse s name and the matrimonial property agreement, the common personal law of the spouses at the time of adjudication shall apply. If the personal laws of the spouses are different at the time of adjudication, their last common personal law, or in the absence of this, the law of that state shall apply in whose territory the spouses had their last common domicile. (3) If the spouses had no common domicile, the law of the state of the proceeding court or another authority shall apply. (4) A change in the personal law of the spouses does not affect the bearing of name established on the basis of the former law and the proprietary effects which came into existence validly, including the matrimonial property agreement. Dissolution of Marriage Section 40 Spouses may choose the applicable law in accordance with Articles 5 7 of Council Regulation (EU) No 1259/2010 implementing enhanced cooperation in the area of the law applicable to divorce and legal separation at the latest by the deadline set by the court in the first hearing. The agreement therefor is valid subject 23/159

24 to the formal requirements specified in paragraph of Article 7 of the mentioned Regulation. Section 41 [Repealed] Registered Partnership Section 41/A Regarding the coming into existence, validity and legal effects of the registered partnership, provisions of Sections shall duly apply, subject to the exceptions specified in Subsections (4). It is not an impediment to the conclusion of a registered partnership and the validity thereof is not affected if the personal law of the intended registered partner does not recognise the legal institution of registered partnership of same-sex couples, provided that: a) the intended registered partner having no Hungarian citizenship proves that there would be no impediment to the conclusion of marriage under his/her personal law, and b) at least one of the intended registered partners is a Hungarian citizen or has 24/159

25 domicile in the territory of Hungary. (3) In justified cases, the metropolitan and county government offices may grant an exemption from the proof specified in Point a) of Subsection. (4) Regarding the legal effects of the registered partnership, Hungarian law shall apply in the case specified in Subsection. Section 41/B Regarding the termination of a registered partnership, the law of that state shall apply: a) in the territory of which the habitual place of residence of the registered partners is located at the time of filing the action or request for the termination of the partnership; in the absence of this b) in the territory of which the last habitual place of residence of the registered partners is located if this habitual place of residence was terminated no more than one year before filing the action or request, provided that one of the registered partners still resides in this state at the time of filing the action or request; in the absence of this c) 25/159

26 of which both registered partners were citizens at the time of filing the action or request. If the applicable law cannot be determined based on Subsection as well as in the case specified in Subsection of Section 41/A, the law of the own state of the proceeding court or another authority shall apply. Family Status Section 42 In the question of the establishment of paternity or maternity and the rebuttal of the presumption of paternity, the personal law of the child prevailing at the time of his birth shall apply. The recognition of a child by the father shall be adjudged according to the personal law of the child prevailing at the time of recognition; the recognition of a child already conceived but not yet born shall be adjudged according to the personal law of the mother prevailing at the time of recognition. (3) The recognition may not be considered as invalid for formal reasons if it is formally valid either according to Hungarian law or according to the law in force at the place and time of recognition. 26/159

27 Adoption Section 43 The conditions of adoption shall be adjudged with joint regard to the personal laws of both the adoptive parent and the person intended to be adopted at the time of adoption. A Hungarian citizen may adopt a non- Hungarian citizen, and a non-hungarian citizen may adopt a Hungarian citizen with the authorisation of the Hungarian guardianship authority or with the authorisation of a foreign authority subject to the approval of the Hungarian guardianship authority. (3) The guardianship authority may authorise or approve the adoption only if it complies with the conditions determined by Hungarian law. (4) [Repealed] Section 44 Regarding the legal effects of adoption, the termination of adoption and the legal effects thereof, the personal law of the adoptive parent at the time of adoption or termination thereof shall apply. 27/159

28 If the personal laws of the adopting spouses are different at the time of adoption or the termination thereof, to the legal effects of adoption and the termination thereof a) the last common personal law of the spouses, and if there was no such law, b) the law of that state in whose territory the spouses had common domicile at the time of adoption or termination thereof, or in the absence of this c) the law of the state of the proceeding court or another authority shall apply. Legal Relationships between Parents and Child Section 45 Regarding the family law relations between parent and child, in particular, to the name borne by the child, the placement, care, legal representation and management of the child s assets with the exception of the maintenance obligation the personal law of the child shall apply. [Repealed] Application of the Law More Favourable to the Child 28/159

29 Section 46 Regarding the family status of a child having Hungarian citizenship or a child domiciled in Hungary and to the family law relations between him and his parents with the exception of the maintenance obligation Hungarian law shall apply provided that it is more favourable to the child. Maintenance of Relatives Section 47 [Repealed] Guardianship Section 48 Regarding the appointment of a guardian and the conditions of the termination of guardianship, the personal law of the person under guardianship shall apply. The extent to which a guardian is required to exercise guardianship shall be adjudged according to the personal law of the guardian. (3) Regarding the legal relations between the guardian and the person under guardianship, including the obligation of the guardian to manage assets and settle, the law of that state shall apply whose authority appointed 29/159

30 the guardian; if, however, the person under guardianship is domiciled in Hungary, Hungarian law shall apply, provided that this is more favourable to the person under guardianship. Conservatorship Section 49 Regarding conservatorship, the rules relating to guardianship shall duly apply. Regarding the legal representation of a person prevented from managing his own affairs and to the ad hoc conservatorship, the law of the state of the authority appointing the conservator shall apply. Interim Measure Section 50 If, in the interest of the placement or care of a non-hungarian citizen domiciled in Hungary, a measure permitting no delay is required, Hungarian law shall apply. Chapter VIII Sections [Repealed] Chapter IX Jurisdiction 30/159

31 General jurisdiction Section 54 A Hungarian court may proceed in all cases if the defendant s domicile or habitual place of residence, in case of a legal person (or a company without legal personality) its seat is located in Hungary, unless its jurisdiction is precluded by this Decree-Law. In the case of an action brought against more than one defendant, a Hungarian court may proceed against all of the defendants if the domicile (seat) or habitual place of residence of at least one of the defendants is located in Hungary, provided that the object of the litigation is such a common right or a common obligation that can be adjudged only uniformly, or if the ruling rendered in the lawsuit would affect all the defendants even without their participation in the lawsuit, or if the claims under litigation stem from the same legal relation. (3) In case of a joint action brought against both the principal and the secondary obligor, a Hungarian court may proceed irrespective of the domicile or habitual place of residence of the secondary obligor if the domicile (seat) or habitual place of residence of the principal obligor is located in Hungary. (4) 31/159

32 If a Hungarian court has jurisdiction for the adjudication of the action, it may also proceed in respect of the counterclaim. Special Jurisdiction Section 55 A Hungarian court may also proceed in legal disputes related to a contract if the place of performance is in Hungary. In applying this Section, the place of performance is the place that was stipulated by the parties in the contract as place of performance; in absence of such stipulation a) in case of a contract for the sale of goods, the place where the object of the sale is to be delivered; b) in case of a contract the object of which is the performance of a specific activity, the place where the activity is to be performed in accordance with the contract; c) in case of other contracts, the place determined by Hungarian law as the place of performance of the disputed claim. Section 56 [Repealed] Section 56/A 32/159

33 A Hungarian court may also proceed in legal disputes stemming from damage caused outside a contract if the place of the conduct giving rise to the damage or the place of occurrence of the damaging result is in Hungary. In respect of a claim brought in criminal proceedings for the compensation of damage caused by crime, a Hungarian court may proceed if the criminal act constituting the grounds of the procedure falls under Hungarian criminal jurisdiction. (3) In a lawsuit brought for establishing or increasing compensation payments, a Hungarian court may also proceed if the domicile or habitual place of residence of the person entitled thereto is in Hungary. (4) In respect of claims brought because of a danger of damage, a Hungarian court may proceed if the place where the event giving rise to the damage is likely to occur is in Hungary. Section 56/B In lawsuits brought against a foreign undertaking, a Hungarian court may also proceed if the undertaking has a branch or agency located in Hungary and the legal dispute concerns the activity of the latter. 33/159

34 In lawsuits brought against a foreign citizen established in Hungary as an independent entrepreneur, a Hungarian court may also proceed if the legal dispute concerns the domestic economic activity of that person. Section 57 Against a defendant who has no domicile or habitual place of residence in Hungary, a Hungarian court may proceed in property lawsuits if the defendant has assets located in Hungary on which execution may be levied. Any claim due to the defendant shall also be considered as the defendant s asset located in Hungary if the debtor of the claim is domiciled in Hungary or if the claim is secured by a thing located in Hungary. Section 58 In lawsuits related to legal relation of succession, a Hungarian court may also proceed if the deceased had Hungarian citizenship at the time of his death. A Hungarian notary public may proceed in probate proceedings if the deceased had Hungarian citizenship at the time of his death or if the estate is located in Hungary. Section 59 In proceedings on child placement, the contact between the child and the parent 34/159

35 living apart and parental custody, a Hungarian court or another Hungarian authority may also proceed if the child s domicile or habitual place of residence is in Hungary. In proceedings concerning marital property law or the property matters of registered partners, a Hungarian court may proceed if the domicile or the habitual place of residence of one of the spouses or registered partners is in Hungary. (3) If any of the questions specified in Subsections and is settled in proceedings concerning personal status, a Hungarian court or another Hungarian authority may also proceed if it has jurisdiction over the proceedings concerning the personal status. Section 59/A In cases related to the legal relations between a guardian and the person under guardianship and between the conservator and the person under conservatorship, a Hungarian court may also proceed if the person under guardianship or conservatorship is a Hungarian citizen or has his domicile or habitual place of residence in Hungary. Jurisdiction in Legal Disputes Stemming from Consumer Contracts and Contracts of Employment Section /159

36 In lawsuits stemming from a consumer contract, brought by the consumer, a Hungarian court may also proceed if the consumer s domicile or habitual place of residence is in Hungary and if the party entering into a contract with the consumer, pursuing commercial or professional activity a) performs activity in Hungary, including if the activities performed elsewhere are directed to Hungarian consumers; or b) has a branch or agency in Hungary or is a foreign citizen established in Hungary as an independent entrepreneur. Section 61 In lawsuits stemming from contracts of employment, brought by the employee against the employer, a Hungarian court may also proceed if a) the habitual place of employment is in Hungary or was last in Hungary; or b) the place of business of the employee which engaged him is or was located in Hungary provided that the habitual place of employment neither is nor was in the same state. Section /159

37 In legal disputes stemming from a consumer contract or a contract of employment, grounds of jurisdiction other than specified in Sections 60 and 61 and Section 54 and the jurisdiction stipulated by parties (Sections 62/F-62/H) may not be relied upon. Exclusive Jurisdiction Section 62/A Exclusively, a Hungarian court or another Hungarian authority may proceed a) in proceedings brought for the enforcement of a right in rem in immovable property located in Hungary and in proceedings concerning a rental and lease agreement; b) in probate proceedings concerning the estate located in Hungary of a deceased person having Hungarian citizenship; c) in proceedings brought against the Hungarian State or a Hungarian state organ, unless the Hungarian State has expressly waived its immunity or if the subject matter of the proceedings concerns a legal relation of the Hungarian State or a Hungarian state organ, in respect of which immunity from Hungarian jurisdiction is not even granted to a foreign state according to Subsection of Section 62/E; d) 37/159

38 in proceedings brought against a Hungarian citizen acting as a diplomatic representative abroad or otherwise enjoying jurisdictional immunity, unless the Hungarian State has expressly waived the immunity; e) in proceedings concerning the annulment of a document or security issued in Hungary; f) in proceedings related to the granting, the extent and termination of a domestic industrial property right; g) in proceedings related to the foundation, insolvency and termination of a legal person or a company without legal personality seated in Hungary, in proceedings concerning the validity of the contract or statute (constituting document) on the basis of which the legal person (company) is registered and in proceedings concerning the supervision of the decisions passed by the organs of the legal person (company); h) in proceedings concerning the entry of rights, facts and data in public registers kept in Hungary; i) in proceedings concerning an enforcement in Hungary. Section 62/B 38/159

39 In proceedings concerning the personal status of a Hungarian citizen, a Hungarian court or other Hungarian authority may proceed in all cases. This jurisdiction is exclusive, unless a) a procedure is brought abroad for the dissolution of marriage or the termination of registered partnership of a Hungarian citizen and the party having Hungarian citizenship, or if both parties are Hungarian citizens, at least one of the parties is domiciled or has his habitual residence in the state of the proceeding court or other authority; b) a procedure is brought abroad for placing or releasing a Hungarian citizen under or from conservatorship and the domicile or habitual place of residence of the person to be placed or being under conservatorship is in the state of the proceeding court or other authority; c) a procedure is brought abroad for establishing paternity or the rebuttal of the presumption of paternity concerning a child having Hungarian citizenship and the domicile or habitual place of residence of both the child and the father is in the state of the proceeding court or other authority; d) a procedure is brought abroad for the termination or restitution of parental supervision concerning a child having Hungarian citizenship and the domicile or habitual place of residence of both the child 39/159

40 and the parent whose right of supervision is concerned in the procedure is in the state of the proceeding court or other authority; e) a procedure is brought abroad for the authorisation or termination of adoption of a Hungarian citizen, provided that the adoptive parent is a foreign citizen and that the Hungarian guardianship authority approved the adoption in accordance with Subsections and (3) of Section 43. Excluded Jurisdiction Section 62/C A Hungarian court or another Hungarian authority may not proceed a) in proceedings brought for the enforcement of a right in rem in immovable property located abroad and in proceedings concerning a rental and lease agreement; b) in probate proceedings concerning the estate located abroad of a deceased person not having Hungarian citizenship; c) in proceedings brought against a foreign state or a foreign state organ, unless the foreign state has expressly waived the immunity or if the subject matter of the proceedings concerns a civil legal relation 40/159

41 specified in Subsection of Section 62/E of the foreign state or a foreign state organ; d) in proceedings brought against a foreign citizen acting as a diplomatic representative in Hungary or otherwise enjoying jurisdictional immunity, unless the foreign state has expressly waived the immunity; e) in proceedings concerning the annulment of a document or security issued abroad; f) in proceedings related to the granting, the extent and termination of a foreign industrial property right; g) in proceedings related to the foundation, insolvency and termination of a legal person or a company without legal personality seated abroad, in proceedings concerning the validity of the contract or statute (constituting document) on the basis of which the legal person (company) is registered and in proceedings concerning the supervision of the decisions passed by the organs of the legal person (company); h) in proceedings concerning the entry of rights, facts and data in public registers kept abroad; i) in proceedings concerning an enforcement abroad. 41/159

42 Section 62/D In proceedings concerning the personal status of a person having no Hungarian citizenship, a Hungarian court or another Hungarian authority may not proceed, with the exceptions specified in Subsections and (3). In lawsuits between persons having no Hungarian citizenship concerning personal status, a Hungarian court may proceed if the domicile or habitual place of residence of one of the parties is in Hungary. (3) Regarding a declaration of a person having no Hungarian citizenship dead or missing or to establish the fact of death, a Hungarian court may proceed if the last known domicile or habitual place of residence of the missing person was in Hungary and some domestic legal reason in particular, the existence of a marriage or registered partnership of the missing person with a spouse or registered partner having Hungarian citizenship or a domicile in Hungary or the settlement of the legal fate of such person s property located in Hungary renders it necessary to declare the person dead, missing or to establish the fact of death. (4) In proceedings for the authorisation or termination of adoption of a person having no Hungarian citizenship, a Hungarian court 42/159

43 or another Hungarian authority may proceed if the adoptive parent is a Hungarian citizen or if his domicile or habitual place of residence is in Hungary. Section 62/E In proceedings brought against a foreign state or a foreign state organ, a Hungarian court or other Hungarian authority has jurisdiction if the subject matter of the procedure a) is a right or obligation of the foreign state (foreign state organ) stemming from a contract under civil law if the place of performance of the contract is in Hungary; unless the other party is another state or state organ thereof; b) is a right or obligation stemming from a contract of employment or another legal relationship for carrying out work entered into between a foreign state (foreign state organ) and a natural person having Hungarian citizenship or domicile in Hungary, provided that the place of employment is or was last in Hungary; unless the employee is a citizen of the foreign state that employs him; c) is a claim brought against the foreign state (foreign state organ) on the grounds of injury caused to life, health, physical 43/159

44 integrity or property, provided that the event giving rise to the damage ocurred in Hungary and the person sustaining the damage was in Hungary at that time; d) is a right in rem over an immovable property in Hungary owned or intended to be acquired by the foreign state (foreign state organ); e) is the membership, share or interest of the foreign state (foreign state organ) in a legal person or a company without legal personality seated in Hungary, or any right or obligation stemming therefrom; f) is a legal relationship of succession of the foreign state (foreign state organ) in connection with a succession opened in Hungary; g) is the granting, extent or termination of a domestic industrial property right the holder of which is a foreign state (foreign state organ). On the basis of an adverse ruling against the foreign state, no execution may be levied on the assets of the state located in Hungary that serve to carry out the public functions of the state or the operation of its state organs. Prorogation of Jurisdiction by the Parties 44/159

45 Section 62/F In respect of property matters, the parties may stipulate the jurisdiction of the courts or a specific court of a state for a legal dispute which have arisen or which may arise in the future in connection with a particular legal relationship. Parties may make such stipulation a) in writing; b) verbally with confirmation in writing; c) in a form which accords with the business practices which the parties have established between themselves; or d) in international commerce, in a form which accords with the commercial usages of which the parties are or ought to have been aware and which is widely known to and regularly observed by parties to contracts of the type involved in the particular commerce concerned Unless the parties expressly agree to the contrary, the court or courts stipulated shall have exclusive jurisdiction. However, if the parties stipulate the jurisdiction of a foreign court and this court declares that it has no 45/159

46 jurisdiction, a Hungarian court may establish its jurisdiction according to the general rules. Section 62/G The stipulation is invalid if the parties stipulate the jurisdiction of a foreign court in respect of any of the cases specified in Section 62/A or the jurisdiction of a Hungarian court in respect of any of the cases specified in Section 62/C. A prorogation of jurisdiction regarding legal disputes stemming from a consumer contract or a contract of employment a) may not result in having the consumer or the employee exposed to being sued in courts other than the courts of the state of his domicile or habitual place of residence; and b) may not exclude that the consumer or the employee can bring a lawsuit before the courts of the state of his domicile or habitual place of residence or before the courts of the state of his habitual place of employment. (3) The provisions set out in Subsection shall not apply if the parties make the stipulation after the legal dispute has arisen. 46/159