Ombudsman's petition to Constitutional Court against legal restrictions on arbitration

Ombudsman's petition to Constitutional Court against legal restrictions on arbitration

According to the commissioner for fundamental rights the amended law on arbitration constitutes a violation of international treaties signed by Hungary and it is an infringement of the requirement of legal certainty. The ombudsman therefore asked the Constitutional Court to review the provisions of said law.

The amended regulation makes unavailable arbitration in matters concerning items of national property falling within the scope of the Hungarian Law on National Property and located within the territory of Hungary. The provisions of the law prohibit the choice of arbitration proceedings for persons entitled to dispose of national property. This regulation is a violation of several international treaties signed by Hungary, including the European Convention on International Commercial Arbitration, the Convention on the Settlement of Disputes between States and Nationals of Other States or the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Considering the provisions of the Basic Law and the case-law of the Constitutional Court, Hungarian legislation should be in compliance with international treaties to which Hungary has become a party. Since the amended law is contrary to this principle, the commissioner for fundamental rights requested the Constitutional Court to declare that the challenged provisions are contrary to international treaties and to annul them.

The ambiguous wording of the law violates the constitutional principle of legal certainty because according to its interpretation arbitration agreements concluded before the entry into force of the amendment should not be affected. The ombudsman therefore proposed the revision of the relevant provisions in this regard as well.

Download