1. Applicable Law
1.1.1 Under Hungarian law, interim measures are available in three major forms: (i) injunctive relief (“ideiglenes intézkedés”), (ii) security measures (“biztosítási intézkedés”) and (iii) preventive evidence taking (“előzetes bizonyítás”)(evidence taking which is conducted prior to the ordinary evidence taking process within the framework of the underlying proceedings). In addition, since the preliminary enforceability (“előzetes végrehajthatóság”) of orders and judgments may serve similar purposes, it will also be regarded hereinafter as an interim measure.
1.1.2 Except for security measures, all types of interim measures are governed by Act III of the 1952 Civil Procedure Code (Civil Procedure Code). In 1995, the main rules applicable to injunctive relief changed significantly and, as those rules have not been amended since, the case law developed by state courts since 1995 is a key source of guidance in this area. In addition, the 1994 Act LXXI on Arbitration (Arbitration Act) contains several provisions on interim measures relating to arbitral proceedings. Security measures are governed by the 1994 Act LIII on Judicial Enforcement (Judicial Enforcement Act).
1.1.3 Although interim measures are mainly regulated by the Civil Procedure Code, in cases involving a specific subject matter, other pieces of legislation might be also relevant. For instance, the 1999 Act LXXVI on Copyright (Copyright Act), the 1995 Act XXXIII on Patents (Patent Act) or the 1997 Act XI on Trademarks (Trademark Act) set out a number of specific provisions regarding injunctive relief in disputes relating to intellectual property (IP) matters.
1.1.4 In international cases, provisions of the 1979 Decree No. 13 on Private International Law (Private International Law Decree), Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) (Brussels I Regulation) and international treaties, in particular the Lugano Convention,1 supersede the Civil Procedure Code. These provisions mostly relate to issues of jurisdiction and judicial enforcement of foreign decisions. In arbitration proceedings the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) (New York Convention) is applicable.
2.1 Injunctive relief
2.1.1 As a general rule,2 injunctive relief may be requested from the court where the substantive claim is pending and such request may not be submitted before the statement of claim is filed. Hence, jurisdiction in respect of interim measures aligns with jurisdiction over the substantive claim.
2.1.2 Within Hungary, the existence of subject matter jurisdiction and territorial jurisdiction over the substantive claim is also a pre-requisite for granting injunctive relief. Courts lacking subject matter jurisdiction and/or territorial jurisdiction for a given dispute are obliged to transfer the case to the court which has jurisdiction. Injunctive relief may not be ordered before such transfer of the case is affected and the statement of claim is found to be formally eligible for a hearing of the merits.3
2.1.3 There are a few exceptions to the general rules existing in Hungarian law. For instance, in disputes arising from copyright, patent or trademark infringement, injunctive relief may be requested even before the statement of claim is submitted.4 In such a case, the request is decided in uncontested proceedings – i.e. where the respondent does not have the opportunity to contest the application – by the same court that is entitled to decide on the substantive claim (if the statement of claim is not filed within 15 days from the date the court communicated its decision on the injunctive relief, the court – at the request of the counter party – shall set aside the injunctive relief).
2.2 Security measures
2.2.1 Security measures are ordered by the court having jurisdiction to issue the enforcement certificate (the document with which the court orders the enforcement of a claim confirmed by an enforceable judgment).5 As a general rule, in civil proceedings such competence is conferred upon the first-instance court hearing the claim.
2.2.2 Requests for security measures may also be granted in contentious proceedings heard by Hungarian arbitral tribunals.6 In such cases the request for ordering a security measure is submitted to the state court that would have territorial jurisdiction to hear the dispute in accordance with the Civil Procedure Code.7
2.3 Preventive evidence taking
2.3.1 Preventive evidence taking may be ordered upon the request of any interested party before the start or even during the course of the litigation proceedings, and – as a general rule – shall be requested at the court hearing the claim. If the claim has not yet begun, the order for preventive evidence taking may be requested at the district court having territorial competency in light of the applicant’s place of residence, or at the district court where it would be most practical for the application to be heard.8
2.3.2 Though preventive evidence taking essentially falls within the competency of the state courts, public notaries also have the power to carry out this type of procedure.9 Jurisdiction lies wherever the applicant’s place of residence is located, although a public notary also has jurisdiction if the preventive evidence taking is to take place within its jurisdiction.10
2.4 Preliminary enforceability
2.4.1 Preliminary enforceability shall be declared by the same court making the judgment or final order in a given dispute.11
3. Types of Interim Measures and their Criteria
3.1 The main categories of interim measures
3.1.2 As mentioned above, there are two main types of interim measures: injunctive relief and security measures. Nonetheless, in order to get a full picture of the interim measures system, preventive evidence taking and preliminary enforceability of orders and judgments should also be considered.
3.2 Injunctive relief
3.2.1 Injunctive relief is an order of the court which obliges the respondent (defendant) to satisfy, fully or partially, the applicant’s (claimant’s) claims before the final decision on the merits of the case is made. It is also possible to grant injunctive relief in respect of a defendant’s counterclaim.12
3.2.2 Injunctive relief may only be issued if (i) it is necessary in order to prevent imminent damage, for the conservation of the status quo in relation to the subject matter of the dispute or for the need for equitable protection of the applicant’s rights and (ii) the disadvantages caused by the interim measure do not exceed the advantages gained thereof. The applicant is only required to demonstrate the likelihood of the relevant facts on which the request is based,13 and is not required to conclusively evidence each fact.
3.2.3 The first instance order granting injunctive relief may be appealed. However, in order to achieve its aims, i.e. prevention of imminent damage, conservation of the status quo or protection of one party’s equitable interest, such an order is preliminarily enforceable irrespective of the eventual outcome of the appeal.14 The injunctive relief may be overruled or modified either in the final judgment regarding the substantive claim and/or by another order of the court because it does not result in a res iudicata.
3.2.4 By granting injunctive relief, the court may only impose an obligation on the respondent if that obligation may also form part of the final judgment. For example, although injunctive relief may be requested to conserve the status quo, the court may not impose a prohibition on disposal over an asset if the subject matter of the legal dispute is the ownership of such asset, because the final judgment recognising the ownership of one of the parties would not contain a prohibition on disposal.15 Note that in disputes related to infringements of intellectual property rights, the relevant laws provide for specific obligations to be imposed on the defendant in the form of injunctive relief.
3.2.5 Both state courts and arbitral tribunals may issue injunctive relief;16 but injunctive relief issued by arbitral tribunals may not be enforced via judicial enforcement.17 Nevertheless, state courts may also decide on requests for injunctive relief even if the substantive claim is pending in arbitration proceedings.18
3.3 Security measures
3.3.1 The objective of security measures is to secure and safeguard the enforceability of the claimant’s civil law claims. If the claimant can demonstrate a likelihood that enforcement of its claim is in jeopardy, the court may order:
- securing the claimant’s pecuniary claims; or
- seizure of the defendant’s assets.
3.3.2 Securing the claimant’s pecuniary claims is usually implemented through a freezing order on the defendant’s bank account or the court bailiff obliges the defendant to pay the amount to the bailiff’s trust account, while seizure of assets means that the defendant’s assets are partly or entirely registered by the court bailiff and henceforth the disposal of such assets is prohibited.
3.3.3 Security measures can be rendered either in situations where (i) an order or judgment has already been made in favour of the claimant but it is not yet enforceable (typically: it is not yet final and binding), or if (ii) litigation or arbitration proceedings are ongoing in relation to the claim to be secured but no decision has yet been made.
3.3.4 The effect of the security measure lasts until the enforcement is ordered in the underlying proceedings, unless the court withdraws it earlier.
Securing claims under not yet enforceable resolutions
3.3.5 As described in Section 2.2 above, security measures securing claims granted in decisions which are not yet enforceable may be ordered by the court with jurisdiction to issue the enforcement certificate, should the relevant decisions be eligible for enforcement. Claimants may submit a request for security measures if:
- the relevant decision is not yet final and binding and is not subject to preliminary enforcement; or
- the resolution is final and binding, but the relevant payment has not yet become due.19
Securing claims under ongoing litigation or arbitral proceedings
3.3.6 If litigation proceedings relating to matrimonial property20 or intellectual property rights21 are pending, the claimant may request that the court secures the assets from which its claims can be satisfied after the submission of the statement of claim has taken place. Note that security measures granted in intellectual property disputes are subject to specific preconditions similar to those of injunctive relief.22
3.3.7 In addition, applying for security measures is generally permitted if a statement of claim has been submitted to the court and the claimant proves the existence, quantum and the due nature of its claim with an authentic public instrument (a notarial deed) or a private document with full probative force (e.g. an original contract duly executed by the representatives of the two companies).
3.3.8 Finally, state courts may also grant security measures if arbitration proceedings are in progress before a Hungarian arbitral tribunal, provided that the applicant proves that the arbitration proceedings have been started; and also the existence, quantum and the due nature of its claim with an authentic public instrument (practically a notarial deed) or a private document with full probative force (e.g. an original contract duly executed by the two companies).23
3.4 Preliminary enforceability of orders and judgments
3.4.1 In general, enforcement in Hungary is only available for final and binding orders and judgments.24 There are several cases however, where the claimant’s (or in the case of counterclaims, the defendant’s) interest in enforcing the preliminary (not yet final) decision shall prevail.
3.4.2 The Civil Procedure Code provides for the preliminary enforceability of judgments in the following:
- awarding maintenance, annuities, and other similar periodic provisions;
- for the termination of trespass;
- awarding any claim recognised and acknowledged by the defendant;
- awarding monetary claims on the basis of any commitment contained in an authentic public instrument or private document with full probative force, if all underlying circumstances had been evidenced by such documents; or
- awarding non-monetary claims, if the claimant is likely to suffer unreasonably extensive damage or losses that would be difficult to ascertain, provided that the claimant deposits adequate security.25
3.4.3 In addition to the above, orders granting injunctive relief and security measures are also preliminarily enforceable.26
3.4.4 The court may deny granting preliminary enforceability (except for judgments awarding periodic provisions) if preliminary enforcement would result in a disproportionately greater burden upon the defendant than the burden the claimant would have to endure if preliminary enforceability is not granted (provided that the defendant submits a request for this before the hearing is closed).27 Judgments may also be declared partially enforceable.
3.4.5 Preliminary enforceability may be declared ex officio, hence no request is required from the parties. If an appeal was submitted against the judgment, the court of appeal may decide to suspend the preliminary enforceability if the above conditions were not met and thus preliminary enforceability should not have been granted.
3.5 Preventive evidence taking
3.5.1 In principle, evidence taking in Hungary is carried out during the course of the litigation proceedings, following the submission of the statement of defence by the defendant. There are situations, however, when any delay in the evidentiary procedure might risk the success of the whole proceedings. In order to avoid such risks and safeguard the interests of the parties, preliminary or preventive evidence taking by the court is allowed at any time, including prior to the start of the underlying proceedings, in circumstances where:
- there is a reasonable cause suggesting that the taking of evidence could not be performed successfully during the hearing or at any later stage of the proceedings, or it would entail considerable difficulties (i.e. the evidence is at risk);
- there is reason to believe that the preventive taking of evidence is likely to enable the hearing to be conducted and closed within a reasonable period of time;
- the proceedings relate to warranty claims; or
- preventive evidence taking is permitted by a specific legislation.28
3.5.2 Special legal provisions allowing the preventive taking of evidence can mainly be found in intellectual property laws. In addition, the Civil Procedure Code itself allows preliminary evidence taking in cases related to the establishment of paternity.
3.5.3 As shown, Hungarian law widely allows the preventive taking of evidence. The interested party is not required to prove the existence of the above conditions which serve as the basis for preventive taking of evidence; only a credible demonstration of the likelihood of their existence is necessary.
3.5.4 Evidence is at risk when it may cease to exist or may change before the ordinary evidentiary proceedings commence. An example of the evidence being at risk may be a fatally ill witness or a building very likely to collapse. Evidence may also be considered to be at risk if a witness intends to go abroad for a long time or if the evidence is perishable. Although every type of evidence gathering may be done preliminarily (hearing witnesses, on-site inspections, inspecting evidence at court), the most frequently used form of preventive evidence taking is the taking of expert evidence. The taking of expert evidence shall be ordered if items, documents or sites need to be analysed for the purpose of preparing the expert witness’s evidence and it will not be possible to carry out such analysis at a later stage of the proceedings.
3.5.5 As the court must safeguard the parties’ right to receive a decision in their dispute within a reasonable time, if it is credibly demonstrated that preventive taking of evidence could facilitate the proceedings, the court will not dismiss a request of a party to carry out such evidentiary procedure. It is to be noted that the evidence obtained by the preventive evidencing may be used by either of the parties during the proceedings.29
4. Procedural and Evidential Requirements for Interim Measures
4.1 Procedural requirements
4.1.1 Requests for interim measures are subject to the general procedural rules applicable to requests and submissions. In most cases, the request is filed in writing, but injunctive relief, preventive taking of evidence and declarations of preliminary enforceability may also be requested orally at a court hearing.
Formal requirements of the request
4.1.2 In the event of a written request, the submission shall indicate the court to which it is addressed, the names and places of residence of the parties and the subject matter of the proceedings, and it shall also refer to the case number in ongoing proceedings. One copy of the submission shall be submitted for each of the parties involved in the case, plus one additional copy. Requests for security measures shall be submitted in as many copies as the number of the parties involved in the case plus three.30 Where parties are represented by the same representative, it is sufficient for those parties’ representative to receive one copy only. Attachments to the submission shall be provided with all copies of the submission. If represented by an attorney, the attorney shall sign each original copy of the submission.31
4.1.3 In the event of an oral application in ongoing proceedings the request shall be recorded in minutes taken before the court hearing the case, or the district court with territorial competency to hear the application based on the place of residence or the workplace of the applicant party.32
4.1.4 The Civil Procedure Code allows for electronic submission if the submission is provided with an electronic signature. For the time being, the option to file a writ electronically is rarely used as the technical procedure is often rather burdensome. Nevertheless, the role of electronic communication in court proceedings will necessarily increase in the future as since 1 January 2016 companies have been obliged to submit each and every request in electronic format in litigation proceedings, and court documents in litigation cases are to be served electronically as well.33
Content of the request
4.1.5 The request has to include both a comprehensive and an express petition for an interim measure, and indicate the relevant facts and circumstances on which the request is founded as well as the underlying evidence that demonstrates credibly that the preconditions for the grant of the interim measure are met. The requested interim measure should be suitable for the protection of the specified legal interest.
4.1.6 As a general principle, the court shall interpret the requests and statements made by the parties according to their content, rather than to their formal title. The court is also bound by the requests of the parties in a way that it should not award more than was requested (the principle of party autonomy).34
Attachments to the request
4.1.7 All supportive evidence shall be attached to the request for an interim measure. Though in most cases there is no need to fully prove the relevant circumstances, enclosing documentary evidence is usually necessary to demonstrate credibly the facts on which the request is based.
4.1.8 Enclosures must be attached to each and every submitted copy of the request.
4.2.1 Before adopting a decision on the request for injunctive relief, the court shall hear the parties in person, or shall allow them to present their views relating to the request in writing. An oral hearing may only be omitted in cases of urgency, or if the party affected fails to show up at the hearing.35 In such cases the court is not even required to request a written statement from the parties.36 The same rules apply to preventive evidence taking. Additionally, it is to be noted that requests for security measures may be submitted within the framework of enforcement proceedings, which are not contested, hence such requests are decided ex parte. While the court shall decide on requests for injunctive relief as a matter of urgency (but without any specific deadline), requests for security measures must be decided within eight days.37
4.2.2 In connection with the decision to be made on the request for injunctive relief, evidence taking may only be conducted if it is deemed necessary due to the fact that according to the opinion of the court, the decision cannot be made otherwise.38
4.2.3 The court shall decide on the request for interim measures in the form of an order, which may be appealed.39 In the case of preventive evidence taking, the related order may only be appealed if it rejects the applicant’s request for evidence taking (i.e. if the preventive evidence taking is allowed and granted, the order may not be contested with an appeal). Preliminary enforceability is not declared in a separate order but within the respective judgment or order confirming the claim. The order of the court is preliminarily enforceable and remains in force until such time as it is repealed (if successfully appealed).40
4.3 Evidential requirements
4.3.1 Interim measures precede the final judgment on the merits of the case, and essentially serve the purpose of safeguarding a legally protected interest (preventing damage, ensuring the satisfaction or the enforceability of claims, preserving the status quo, protection of rights, etc.), the necessity of which usually arises in situations where steps must be taken without delay.
4.3.2 As a consequence, the standard of proof for granting an interim measure is generally lower than that relating to the final judgment on the merits of the case. The relevant facts underlying the necessity of the interim measures only have to be credibly demonstrated (i.e. the applicant need only demonstrate the likelihood of the factual ground of the request, and is hence not required to conclusively evidence each fact), and the taking of evidence may only be performed if deemed essential for reaching a decision.41 As to security measures, in certain cases – i.e. where the security measure is to be ordered for the enforcement of a claim for which another action has been filed either with a Hungarian court or a Hungarian arbitral tribunal – it is necessary to prove the existence, quantum and the due nature of the claim with an authentic public instrument (practically speaking, a notarial deed) or a private document with full probative force.42 As for preventive evidence taking, the general provisions on the taking of evidence – as provided for in Chapter X of the Civil Procedure Code – shall apply, while the existence of the preconditions for such evidentiary procedure needs to be credibly demonstrated.43
4.3.3 In the case of injunctive relief it shall also be demonstrated that the disadvantages caused by the requested measure do not exceed the advantages gained. This issue is subject to the discretion of the court as two hypothetical situations need to be evaluated and compared. The comparison of advantages and disadvantages is often the main obstacle to having the request granted.
4.3.4 In Hungarian law the lower standard of evidence is in many cases compensated for by the obligation on the applicant to provide appropriate security, or by the right of the respondent to demand such security from the applicant.44 The aim of the security is to provide financial coverage for the loss if the interim measure eventually proves to be unfounded. The amount of the security is determined by the court at its own discretion. Refusal to provide security serves as a basis for rejection.
4.3.5 Regarding judicial practice, it is to be noted that the attitude of courts is very strict and rigorous even though full proof of the underlying circumstances is not required by the law. Courts very rarely grant interim measures and in fact often require that the applicant offers substantive evidence to support its request. The balance between advantages and disadvantages is also a point where courts have a broad discretion and often follow a cautious approach in favour of the respondent.
5. Legal Safeguards for the Respondent
5.1 Principle of proportionality
5.1.1 Since interim measures are ordered in urgent situations without full proof of underlying circumstances, particular attention should be paid to the legal interests of both parties to the dispute. Hungarian law therefore provides a number of legal instruments for the respondent in order to safeguard its interests.
5.1.2 The system of interim measures is based on the principle of proportionality, which imposes the obligation on the court to take into consideration all relevant aspects of the case, which includes the careful balancing of the interests of both parties.
5.2 Right to present counter-arguments and evidence
5.2.1 Safeguards for the respondent particularly encompass the right to present counter-arguments and evidence, the right to make statements, request security, and to appeal against the decision of the court. As mentioned, injunctive relief may only be ordered without the respondent having been heard in cases of exceptional urgency or if any delay would cause irreparable harm or damage, hence ex parte decisions are exceptional,45 while in the case of security measures – where no hearing is held – it is primarily the right to appeal that is available as part of the due process.
6. Timing of Interim Measures
6.1 Similarities and differences when filing a request before or after the case on the substantive claim is pending
6.1.1 The main rule is that interim measures may be requested after the statement of claim is submitted to the court in the substantive dispute of the parties. That provision basically determines the timing of interim measures. As a consequence, the court first decides on the interim measure, and only deals with the merits of the case afterwards.
6.1.2 In exceptional cases, where injunctive relief may be requested before filing the statement of claim, there is a time limit (15 days) set for the requesting party to file its substantive claim with the court. Failure to meet the deadline entitles the court to repeal its decision to grant an interim measure upon the request of the respondent.46
6.2 Duration of an interim measure procedure
6.2.1 Since interim measures are typically requested in case of urgency, it comes as no surprise that requests for interim measures are decided within a short timeframe. Accordingly, as a general rule, the court shall decide on granting injunctive relief as a matter of urgency.47 The same deadline applies to requests for security measures, with the only difference being that the end of the deadline is precisely set to eight days running from the submission of the request.48 The court decision granting an interim measure is preliminarily enforceable and appeals do not suspend the order granting the interim measure.
6.2.2 In practice, court decisions on interim measures often take several weeks or even months. Moreover, the judicial enforcement of an interim measure further extends the timeframe. If there is an appeal against the decision and the first-instance court decides to suspend the enforcement of the order, enforcement may only be requested after the interim measure is confirmed in a final and binding decision, which may take 3-6 months at second-instance.
7.1 Court costs and compensation for professional representation
7.1.1 When applying for interim measures, the applicant should bear in mind the court costs that may arise and also the obligation to compensate the other party if the request for the interim measure is dismissed.
7.1.2 Litigation costs include all reasonable expenses of the parties that arise in connection with the case, including court duties, costs of expert evidence, interpreters, and also the fees of legal representatives.49
7.2 Advance on costs and security for party compensation
7.2.1 Court duty (a procedural fee) must be paid in order to initiate civil proceedings. In certain cases this is a fixed amount while in other situations the amount to be paid depends on the value of the subject matter of the dispute. The procedural fee also varies according to the type of proceedings. Procedural fees are advanced by the claimant (applicant) in the first instance, and the court will determine which party will ultimately bear those costs.
7.2.2 Non-EU resident applicants seeking interim measures are generally required to provide security/deposits if so requested by the other party to cover the eventual litigation costs.50
7.2.3 No procedural fee shall be paid for requesting injunctive relief if such request is submitted in litigation proceedings already in progress. However, if the request is submitted before the statement of claim (i.e. in the case of intellectual property related disputes), or the request is submitted during the course of ongoing arbitration proceedings, procedural fees must be paid with an application for injunctive relief. The procedural fee amounts to 3% of the value of the requested injunctive relief with a minimum fee of HUF 5,000 (approximately EUR 16) and a maximum fee of HUF 250,000 (approximately EUR 795).51 If the value of the requested injunctive relief cannot be determined, the procedural fee is HUF 6,000 (approximately EUR 19) or HUF 10,500 (approximately EUR 33) depending on whether the request is submitted to a district court or to a tribunal (county court).52
7.2.4 Requesting security measures is considered as equivalent to initiating enforcement proceedings, thus the relevant procedural fee (1% of the value of the security measure) is paid with a minimum fee of HUF 5,000 (approximately EUR 16) and a maximum fee of HUF 350,000 (approximately EUR 1113).53 If the value of the requested injunctive relief cannot be determined, the procedural fee is HUF 5,000 (approximately EUR 16).54
Preventive evidence taking
7.2.5 The rules for requesting injunctive relief apply to an application for preventive evidence taking. Thus, if requested within the framework of ongoing court proceedings, no procedural fee shall be paid, while if the request is submitted before the start of the court proceedings, the amount of the procedural fee is 3% of the value of the amount in dispute. The minimum and maximum fees are the same as described above.55 As a way of encouraging preventive evidence taking, it is provided that if preventive evidence taking precedes the litigation proceedings, the procedural fee payable for initiating the litigation proceedings shall be 50% of the otherwise applicable duty fee.56
7.3 Decision on costs and cost shifting
7.3.1 If the interim measure is requested and decided in litigation proceedings (which is typically the case with injunctive relief and preventive evidence taking), the costs are determined and allocated by the court in the judgment or court order that concludes the case. However, if the interim measure is requested in separate uncontested court proceedings (e.g. in the case of security measures or injunctive relief related to a pending arbitration), the court decides on the procedural costs in the order granting or rejecting the interim measure.
7.3.2 While the court costs (procedural duties, costs of evidence taking, etc.) are determined and allocated ex officio, the costs of the parties may be determined upon and based on their own requests. As a principle, the litigation costs of the successful party shall be covered by the losing party.57 In the case of partial success, the litigation costs shall be shared. It is to be noted that Hungarian courts tend to underestimate the costs of legal representation, thus the amount of compensation granted very rarely reaches the actual costs of the successful party.
7.3.3 The principle of costs sharing applies both for court costs (e.g. court fees) and party compensation (e.g representation costs). Accordingly, where a request for an interim measure is fully granted, the respondent must bear all costs. If a request is partially admitted, the costs are shared proportionally. If the difference between the ratio of success and loss is not significant, the court may order the parties to bear their own costs.58
8. Remedies Against the Decision on Interim Measures
8.1 Modification and revocation
8.1.1 In the case of injunctive relief, the first-instance court is entitled to revise and amend its own order upon request or, if the claimant has decided to reduce its claim, even ex officio.
8.2 Appellate remedies
8.2.1 The decision of the court regarding the request for injunctive relief or security measure may be contested separately, i.e. independently from the judgment on the merits of the case.59 Appeals against the court’s decisions on interim measures are governed by the general rules of appeals. The deadline for submitting an appeal is fifteen (15) days from the date of service of the decision. The appeal shall be submitted at the first-instance court in writing, or recorded in minutes. If a decision may be appealed, any means of contest – other than requests for the correction of typos or a supplementary decision – shall be recognised as an appeal.60 The appeal has to be decided by the second-instance court without a formal oral hearing. The first-instance court shall serve a copy of the appeal on the respondent to the appeal, soliciting its comments within eight days. After the expiry of this deadline, the first-instance court shall forward the documents of the case to the second-instance court, including the respondent’s comments, if any.61
8.2.2 Court decisions made regarding requests for interim measures may be challenged by both parties; meaning that orders granting and refusing relief are subject to appeal, with the exception being preventive evidence taking where only the dismissing court order may be appealed.62
9. Enforcement of an Interim Measure
9.1 Enforcement of interim measures issued by national courts
9.1.1 The enforcement of injunctive relief and security measures show substantial differences. The reason for the difference is that injunctive relief is ordered in the course of or in connection with ordinary court proceedings, while a request for security measures is adjudged within the framework of enforcement proceedings, hence no separate enforcement shall be initiated.
Enforcement of injunctive relief
9.1.2 As described above, an order granting injunctive relief is always preliminarily enforceable. Hence, if the respondent fails to comply with the injunctive relief ordered, the claimant may initiate enforcement proceedings against the respondent. The rules applicable to the enforcement of injunctive relief are identical to those prescribed for final and binding judgments.
9.1.3 The applicant shall request enforcement from the court that granted the injunctive relief, by submitting a form to issue a certificate of enforcement (“végrehajtási lap”).63 A procedural fee in the amount of 1% of the value of the injunctive relief to be enforced shall be paid by the applicant.64
9.1.4 Based on the certificate of enforcement, the court bailiff enforces the injunctive relief by coercive measures. If the injunctive relief provides for the payment of money, the court bailiff may:
- collect it from the wages of the respondent;
- collect it from the bank account of the respondent; or
- enforce it by selling movable or immovable property of the respondent.65
9.1.5 If the injunctive relief obliges the respondent to perform a specific action, the court bailiff calls upon the respondent for the voluntary performance of the action. If the respondent refuses to co-operate, the court bailiff notifies the competent court which may:
- oblige the respondent to pay a sum equivalent to such action to the applicant;
- authorise the applicant to perform the relevant action at the cost and risk of the respondent;
- impose a fine on the respondent of up to HUF 500,000 (approximately EUR 1,590); or
- enforce the performance of the specific action with police assistance.66
Enforcement of security measures
9.1.6 Once the court decides on granting the request for a security measure, one copy of the order is provided to the court bailiff.
9.1.7 Where the security measure is ordered in respect of pecuniary claims, the court bailiff delivers the order of the court to the respondent, and requests that the respondent pay the relevant amounts to the trust account of the court bailiff. Should the respondent refuse to do so, the court bailiff may:
- freeze the bank accounts of the respondent;
- seize the immovable and movable property of the respondent (seizure shall be terminated once the respondent pays the amount to be secured to the trust account of the court bailiff); and/or
- collect the respondent’s wage to its trust account.67
9.1.8 With regard to securing movable or immovable assets, the court bailiff seizes the relevant assets by prohibiting any disposal over them. Perishable items shall be sold by the court bailiff.68
9.2 Enforcement of interim measures issued by foreign courts
9.2.1 If an order for an interim measure was issued in a contracting state of the Lugano Convention, enforcement follows this treaty. Interim measures issued in EU member states may be enforced based on the Brussels I Regulation. For all other cases, enforcement follows the rules of the Private International Law Decree.
Enforcement under the Lugano Convention
9.2.2 An interim measure ordered in a Member State of the Lugano Convention is recognised and enforced in Hungary under the provisions of the Convention. In order to achieve enforceability, recognition must be requested from the competent Hungarian court. The court recognises the foreign interim measure by issuing a certificate of recognition.69After the certificate of recognition is issued, the order of the foreign court shall be deemed as having been issued by Hungarian courts for the purpose of enforcement. Based on the relevant case law70 enforcement of foreign ex parteinterim measures, is not supported.
Enforcement under the Brussels I Regulation
9.2.3 According to the Brussels I Regulation,71 any judgments given in a Member State of the EU and enforceable in the state of issue shall also be enforced and recognised in all member states without any declaration of enforceability being required. The definition of a judgment of the Brussels I Regulation includes decrees, orders, decisions and writs of execution issued by the courts of the EU member states.72
9.2.4 If a certificate is issued by the court which ruled on the interim measure in line with the provisions of the Brussels I Regulation, the competent Hungarian court shall recognise it as if it were issued by a Hungarian court.73 That order may be appealed but annulment is only possible for the reasons exhaustively listed in Article 45 of the Brussels I Regulation. The most important reason for annulment is if the judgment was given ex parte. Thus, ex parte interim measures are not enforceable under the Brussels I Regulation.
Enforcement under the Private International Law Decree
9.2.5 The recognition and enforcement of the decisions made by courts of a state which is not a member of the Lugano Convention or of the EU is governed by the Private International Law Decree. Even if the Hungarian Supreme Court has never addressed the issue it may be derived from the Private International Law Decree that interim measures may be recognised and thus enforced in Hungary, if:
- the court which made the decision had jurisdiction according to the Private International Law Decree to make such decision;
- the decision is final and binding according to the laws of the state of origin;
- there is reciprocity between Hungary and the state of origin (however, reciprocity is not required if the jurisdiction of the court issuing the interim measure was based on the parties’ agreement)74; and
- no ground for denial exists.75
9.2.6 Although there are several grounds for the denial of the recognition of a foreign decision, for the purpose of this analysis the most important one is that no ex parte decision may be recognised.
10. Interim Measures in International Commercial Arbitration
10.1 Interim measures by state courts
10.1.1 Both the provisions of the Arbitration Act and of the Judicial Enforcement Act make it possible to file a request for interim measures with state courts, even if the parties referred their dispute to arbitration.
10.1.2 Injunctive relief may be requested from state courts both prior to the commencement of the arbitration proceedings and during the proceedings.76 Security measures may only be requested after the commencement of arbitral proceedings, as a certificate issued by the arbitral tribunal shall be attached to the request for security measures in addition to proving the existence, quantum and due nature of the claim with a public instrument or a private document with full probative force.77
10.2 Interim measures by arbitral tribunal with seat in Hungary
10.2.1 The Arbitration Act provides that arbitral tribunals have the power to issue interim measures unless the parties agree otherwise.78 The Arbitration Act does not restrict the scope of the interim measures which arbitral tribunals may grant, nor does it define any specific rules in this regard.
10.2.2 The downside is that interim measures issued by arbitral tribunals – if not performed on a voluntary basis – are not enforceable, as the Arbitration Act provides for enforceability (and recognition) only regarding arbitral awards and not regarding other decisions of arbitral tribunals.79 Therefore, even though non-compliance with an interim measure may be taken into account by the arbitral tribunal when rendering its final award, parties rarely seek to have interim measures in arbitration proceedings conducted under the Hungarian Arbitration Act.
10.3 Interim measures by arbitral tribunal with seat abroad
10.3.1 Hungary is a member state to the New York Convention. Article III of the Convention provides for the enforceability of foreign arbitral awards. As decisions ruling on interim measures may not be considered as arbitral awards, no enforceability is granted to them under the Convention. Accordingly, interim measures imposed by foreign arbitral tribunals are not enforceable in Hungary; the claimant may only rely on the voluntary performance of the defendant. Moreover, as the Hungarian Arbitration Act only applies to arbitrations where the seat of the tribunal is located in Hungary, auxiliary court proceedings enabling the claimant to request injunctive relief or security measures are not available for claimants involved in foreign arbitral proceedings.