Originally from Baker and McKenzie International Arbitration Yearbook 2014-2015

A. LEGISLATION, TRENDS AND TENDENCIES

A.1 Legislation

International arbitration in Hungary continues to be governed by the Act LXXI of 1994 on Arbitration (the “Hungarian Arbitration Act”), to which no legislative amendment was made in 2014. However, it is noteworthy that the new Hungarian Civil Code (the “Civil Code”),4 which entered into force on 15 March 2014, introduced a significant amendment relating to the approach to arbitration clauses in consumer contracts.

Pursuant to Section 6:104 (1) i) of the Civil Code, a contract between a consumer5 and a business entity6 containing terms and conditions that have not been individually negotiated is considered unfair if its object or effect is to exclude or hinder the consumer’s right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration. In other words, arbitration clauses in consumer contracts are to be considered unfair unless the parties to the consumer contract individually negotiated this term or it is expressly prescribed by law. We are not aware of any legislation which would prescribe arbitration relating to any kind of consumer contract. Therefore, if the arbitration clause is part of the general terms and conditions of the consumer contract or otherwise such term is not negotiated individually by the parties to the consumer contract, the arbitration clause is to be considered unfair. The unfair contract term will then be null and void.7