Originally from American Review of International Arbitration - ARIA

I.  INTRODUCTION

In 2011 and 2012, the Hungarian parliament enacted laws that excluded arbitration for disputes involving Hungarian national assets. These provisions were fiercely criticized because they arguably ran counter to international treaty law and were, from a business perspective, not sustainable. In 2013, the anti-arbitration provisions passed the test of the Hungarian Constitutional Court (“CC”), which refused to pronounce them unconstitutional and, in a controversial judgment, established that they were not irreconcilable with international treaty law. However, the concerns related to economic sustainability proved to be real: in 2015, Hungary revoked these provisions in order to execute a major international economic transaction.
This article presents and analyzes Hungary’s recent legislative efforts and ultimate failure to exclude arbitration in matters involving Hungarian national assets, demonstrating the difficulties a country faces if it attempts to defy the prevailing pattern of dispute settlement in international trade. The lesson of the Hungarian arbitration saga is that, unsurprisingly, arbitration is not only a “take it or leave it,” but even a “take it or leave” rule of the club of international economic relations.