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Last update: 21-08-2007
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Jurisdiction of the courts - Hungary

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If you want to initiate legal proceedings in civil or commercial matters, you will have to identify the court that is competent to deal with your case or, in other words, has jurisdiction. If you use the wrong court or if there is a dispute over the question of jurisdiction you run the risk of a considerable delay in the proceedings or even of a dismissal of your case because of a lack of jurisdiction.

The provisions applicable to the jurisdiction and competence of courts are enforced in all proceedings initiated on the basis of the law irrespective of whether the contending parties are national or foreign legal or natural persons, except where an international agreement provides otherwise.



 

TABLE OF CONTENTS

A. Should I apply to an ordinary civil court or to a specialised court? A.
B. Where the ordinary civil courts have jurisdiction, how can I find out which one I should apply to? B.
I. Is there a distinction between lower and higher ordinary civil courts, and if so which one is competent for my case? I.
II. Territorial jurisdiction (does the court of city/town A or of city/town B have jurisdiction for my case?) II.
1. The basic rule of territorial jurisdiction 1.
2. Exceptions to the basic rule 2.
a) When can I choose between the court in the place where the defendant lives (court determined by the application of the basic rule) and another court? a)
b) When do I have to choose a court other than that in the place where the defendant lives (court determined by the application of the basic rule)? b)
c) Can the parties themselves attribute jurisdiction to a court that would not be competent otherwise? c)
C. Where specialised courts have jurisdiction, how can I find out which one I should apply to? C.

 

A. Should I apply to an ordinary civil court or to a specialised court?

Under Article 16 of Act LXVI of 1997 on the organisation and administration of courts, only one specialised court operates in Hungary: the Labour Court, which deals mainly with employment-related cases.

The Labour Court is a court of first instance which handles:

  1. disputes preceding the conclusion of labour contracts and concerning rights arising from an employment relationship after the termination of employment,
  2. disputes relating to a collective agreement between the parties authorised to make such an agreement or between them and a third party concerning the rights arising from the collective agreement,
  3. the enforcement of claims based on illegal conduct relating to strikes and other means of labour struggle or to the freedom of organisation.

Claims under the law governing employee-employer relations and directly related to employment can also be enforced in certain labour disputes.

The jurisdiction of the labour court includes labour inspection, administrative decisions concerning occupational safety, administrative decisions taken by the county (metropolitan) labour centre under the Employment Promotion and Unemployment Benefits Act, and the court review of social security decisions, which are dealt with in accordance with the rules for hearing administrative cases.

In labour disputes, the labour court for the area in which the employer's headquarters are located or where the place of business in which the employee works or worked is located has sole jurisdiction.

In cases relating to the service relationships of professional members of the armed forces, the labour court competent for the area in which the first-instance body making the prejudicial decision is located has jurisdiction, while the Metropolitan Labour Court hears legal actions initiated by undercover members of the civil, military and national security services and the police.

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Appeals are not heard by the special court but by a regular court, specifically the county court that has jurisdiction over the area in which the labour court is located.

B. Where the ordinary civil courts have jurisdiction, how can I find out which one I should apply to?

I. Is there a distinction between lower and higher ordinary civil courts, and if so which one is competent for my case?

First-instance judgments are passed by:

  • local courts (municipal courts, district courts) and
  • county courts (metropolitan court).

Second-instance judgments are passed by:

  • county courts (metropolitan court) in matters within the remit of local courts (municipal courts, district courts),
  • high court of appeal in matters within the remit of county courts (metropolitan court),
  • the Supreme Court in matters within the remit of the high court of appeal (Article 233/A) and in cases specified in Article 235(3).

The Supreme Court decides on review cases (special legal remedy).

All legal actions not referred to county courts by the law come under the jurisdiction of local courts.

Labour-related disputes listed under (A) come under the jurisdiction of the labour courts.

The first-instance jurisdiction of county courts covers the following:

  1. legal actions pertaining to property rights where the value of the property exceeds HUF five million, except for property actions brought by married couples if they are initiated with or in the course of divorce proceedings;
  2. legal actions initiated to obtain compensation for damage caused by persons acting in their official capacity under the authority of a public administration;
  3. disputes concerning copyright and related rights, including actions to enforce rights and cost claims coming under joint legal management, legal actions concerning industrial property, and cases concerning rights provided for by Article 86(3)-(4) of the Civil Code;
  4. legal actions relating to the international transport of goods or transport contracts;
  5. among legal actions concerning companies:
    1. legal actions to repeal a court of registration decision granting a registration application,
    2. legal actions to establish that a company's instrument of incorporation or amendments thereto are invalid, or to prevent their entry into force,
    3. legal actions for the court review of decisions of company bodies,
    4. legal actions between companies and their members (or former members) and between members (or former members) themselves regarding membership relations,
    5. legal actions relating to the acquiring of participations in companies, and
    6. legal actions to change the liabilities of a member (shareholder) bearing limited liabilities for company debts to unlimited liabilities;
  6. among legal actions concerning organisations not qualifying as companies and registered by the county court:
    1. legal actions initiated against such organisations by the body legally overseeing them,
    2. legal actions based on membership relationships between such organisations and their members (or former members) and between the members (or former members) themselves;
  7. legal actions to enforce civil rights claims arising as a result of the infringement of moral rights, including legal actions for compensation for such infringement if they are initiated with or in the course of such legal actions;
  8. legal actions concerning the legal relations arising from securities;
  9. public administration lawsuits, except for those referred to the Labour Court;
  10. legal actions for rectifications by the press;
  11. legal actions to annul unfair contractual conditions [Article 209/A(1) and (2), Article 209/B, Article 301/A(4)-(6) of the Civil Code];
  12. legal actions to establish the facts for cases where the value of the subject of the legal action would exceed the value provided for under paragraph (a);
  13. legal actions for compensation for not completing a proceeding within a reasonable period;
  14. legal actions concerning financing contracts signed with healthcare providers [Article 30 of Act LXXXIII of 1997];
  15. legal actions that the law refers to the jurisdiction of county courts.

If any of the co-plaintiffs belongs to the jurisdiction of a county court, the legal action will come under that court's jurisdiction.

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The so-called threshold value is applied in respect of legal actions concerning property. In the other cases listed above, legal actions are brought in the first instance to the county court owing to their nature (usually because they are more complicated).

II. Territorial jurisdiction (does the court of city/town A or of city/town B have jurisdiction for my case?)

1. The basic rule of territorial jurisdiction

In general terms, the court in whose area the defendant lives has jurisdiction in all cases where the exclusive competence of some other court is not established (general jurisdiction).

If the defendant does not have a domicile in Hungary, the place where he/she is staying has jurisdiction. If the place where the defendant is staying is unknown or is situated abroad, his/her last place of residence in Hungary has jurisdiction. If this cannot be established or if the defendant did not have one, jurisdiction will be according to the plaintiff’s domicile or, failing this, the place where the plaintiff is staying or, if the plaintiff is not a natural person, the place where the plaintiff’s headquarters are located.

In lawsuits against legal persons, general jurisdiction can be determined according to the location of the legal person's head office or the headquarters of the body entitled to represent it. In case of doubt, the place of administration is considered to be the headquarters. If the legal person's headquarters are in Budapest but its operations extend to the territory of Pest County, the court that has jurisdiction over Pest County deals with the case.

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If the legal person does not have headquarters in Hungary, jurisdiction in a legal action by a Hungarian legal person (the plaintiff) will be fixed according to the location of the legal person's headquarters. If the plaintiff is a Hungarian natural person, jurisdiction will likewise be established according to the plaintiff’s domicile or, failing that, the plaintiff’s place of residence.

In legal actions against enterprises without legal personality, the rules relating to legal entities are applied when establishing jurisdiction.

2. Exceptions to the basic rule
a) When can I choose between the court in the place where the defendant lives (court determined by the application of the basic rule) and another court?

In all cases where the sole jurisdiction of another court is not specified, the plaintiff may, if he so chooses and on meeting certain preconditions, initiate the legal action before another court provided for by the law instead of before the court with general jurisdiction for the defendant. For example, in legal actions relating to property, the court in whose area the defendant is staying for a foreseeably long period (e.g. as an employee or student) is also competent. For non-professional members of the armed forces, their permanent place of duty determines which court is competent. This reason for jurisdiction cannot be applied in the case of defendants who do not have the capacity to act in a lawsuit.

For a defendant who has neither a domicile nor a place of residence in Hungary, a property-related legal action can also be initiated at a court in whose area the subject of the legal action is based or where the defendant's seizable assets are located. If the assets consist of a claim, the legal action can be initiated in the area where the defendant’s debtor lives or, if the claim is insured by something, it can also be initiated at the place where the latter is located.

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A property-related legal action can be initiated against a foreign legal person  at the court in whose area the person appointed to manage the foreign legal person's affairs lives, as an alternative to the court referred to above. The court with jurisdiction over the area in which the Hungarian branch establishment of the foreign legal person is located or where its commercial representation is based is also competent.

A legal action to obtain maintenance, allowances and suchlike may also be brought to the court with jurisdiction over the claimant's place of residence.

A legal action for child custody may also be initiated at the court competent according to the child’s place of residence.

Legal actions relating to ownership or possession of real estate and other rights or legal relations connected with the real estate may also be initiated at the court with jurisdiction over the place where the real estate is situated.

Legal actions for claims arising from transactions with business organisations in the field of their activities may also be initiated at the court of the place of the transaction or place of performance.

Legal actions for damages may also be initiated at the court competent according to the place or area where the damage occurred.

Legal actions relating to a bill of exchange may be initiated at the court competent according to the place of payment.

b) When do I have to choose a court other than that in the place where the defendant lives (court determined by the application of the basic rule)?

In order to organise cases into groups or ensure expertise, specific legislation may rule that in given cases only one court, e.g., the metropolitan court, should proceed in the first instance. For example, legal actions relating to industrial property belong to such a group. Sole competence can only be established by the law. The court designated is usually the metropolitan court.

c) Can the parties themselves attribute jurisdiction to a court that would not be competent otherwise?

In property-related cases the parties may attribute jurisdiction to a particular court for resolve a particular dispute or the disputes which may arise from a particular legal relationship. The parties may submit to this jurisdiction:

  1. in writing;
  2. verbally, with written confirmation;
  3. in a form consonant with the business practices developed between the parties; or
  4. in international trade, in a form consonant with the trade practices that are known or should be known to the parties and that are generally known and regularly used in the given business field by parties to this type of contract.

Jurisdiction cannot be attributed in cases where the sole competence of a particular court is established by law.

Unless otherwise agreed by the parties, the designated court has sole competence.

The stipulation also applies to legal successors.

C. Where specialised courts have jurisdiction, how can I find out which one I should apply to?

The legal provisions concerning a particular case clearly state the court you should apply to.

« Jurisdiction of the courts - General information | Hungary - General information »

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Last update: 21-08-2007

 
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