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Sarhegyi and Partners Successful for Hungarian State Against Hungarian Town

Sarhegyi and Partners Successful for Hungarian State Against Hungarian Town

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The Sarhegyi and Partners law firm has successfully represented the Hungarian State on appeal to the Metropolitan Regional Court against claims brought against it by the Hungarian town of Budaors involving challenges to aspects of the country's Budget Act. In addition to the immediate dispute, the case represents the first time that the issue of liability for damages caused by legislation was considered since the new Hungarian Civil Code entered into force in 2014.

According to Sarhegyi and Partners, following the appeal of the court of first instance's decision by the Hungarian State, "the Metropolitan Regional Court, in its verbally-promulgated final and binding decision, fully rejected the claim of Budaors and modified the decision of the court of first instance. According to the final decision, the legal costs should also be paid by Budaors. The court of second instance highlighted that the decision of the first instance had serious procedural and substantive mistakes, thus the respondent’s appeal was well grounded. The court of second instance decided on the issue of liability for damages caused by legislation and also declared that the previous judge misinterpreted the Budget Act. In the first instance, the concept of the so-called legislator’s functional immunity underlined by the Hungarian State’s legal representatives was rejected, despite the remarkable judicial practice developed in the era of the previous Civil Code. At the end, the Hungarian State won the case, as Budaors was not able to prove that the state’s legislation was unlawful, confirming by this the secondary argument of the state's representatives. The unlawful act in connection with the ... legislation [may] only be successfully proved by an annulment decision of the Court of Constitution. However, there is no such decision."

Budaors has announced that it will initiate a review of the decision by the country's Supreme Court. 

The Sarhegyi and Partners team was led by Andras Lovas.

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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