Annulment of arbitration award

The annulment of an arbitration award by court is exceptional in Hungarian court practice. That is why the decision of the Curia of Hungary, which annulled a judgment of the Court of Arbitration attached to the Hungarian Chamber of Commerce and Industry (hereinafter referred to as "the Arbitration Court"), deserves attention.

The arbitral tribunal made its judgment in a way that the president of the tribunal sent the draft judgment by email to the other arbitrators who also made their comments by email. The president then prepared the final version of the judgment. However, the arbitrator appointed by the applicant refused to sign the judgment and submitted a dissenting opinion.

The applicant requested the annulment of the Arbitration Court's decision, referring to the breach of the Rules of Procedure of the Arbitration Court. The Curia stated that, according to the Rules of Procedure of the Arbitration Court, the acting council should deliver its judgement in a closed session, which is necessary to establish the position of the arbitrators and whether there is a majority opinion. According to the Curia, the requirement of a closed meeting is fulfilled if the arbitrators can discuss the legal problems in a closed discussion, at the same time, directly arguing with each other. Since in the case the arbitrators received the draft judgment electronically and made their observations in the same way, the judgment was rendered by the arbitrators not in a closed session so their proceedings according to the Curia’s view, did not comply with the Rules of Procedure, therefore the Curia annulled the judgment of the Arbitration Court.

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