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Changes to Arbitration Rules

Do hundreds of contracts need changing?

With effect from 1 January 2018, the rules on arbitration will be amended. The most important change is the restructuring of the arbitration court system.

Within the framework of the structural reforms, the Permanent Court of Arbitration for Money and Capital Markets and the Permanent Court of Arbitration for Energy will be abolished, while the Permanent Court of Arbitration for Commerce attached to the Hungarian Chamber of Commerce will be competent in all commercial cases. Integration does not involve the Permanent Court of Arbitration for Sports and the Court of Arbitration attached to the chamber of agriculture.

Note that ongoing cases pending before the dispute resolution forums to be abolished will be transferred to the Court of Arbitration for Commerce with effect from 1 January 2018. Where contracting parties have by prior agreement appointed either of arbitration courts to be abolished as the forum for dispute resolution, the Court of Arbitration for Commerce will assume jurisdiction after the new act enters into force.

Since from next year contracts cannot appoint either of the two abolished arbitration courts as a dispute resolution forum, it is worth revising and, if necessary, modifying standard terms and conditions, as well as other contracts that stipulate arbitration as the means of dispute resolution. Appointing arbitration courts which remain unaffected by integration, or transition to the State Court system, may provide an alternative solution for contracting parties.

Out of the numerous innovations governing the process, we should highlight renewal of proceedings. This legal institution was not included in earlier regulations. A party may now apply for renewal of proceedings by referring to a fact or evidence which was not taken into consideration in the main proceedings on grounds other than the applicant’s own fault and which, if taken into account, would have resulted in a more favourable decision for the applicant. Re-evaluation of an arbitration ruling can be requested within one year after the ruling has been served. The arbitration tribunal which reached the contested decision may decide as follows:  it can affirm the decision or adopt a new decision while partially or completely overturning the earlier decision.

Source: T/15361. Draft Act