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Waiting for another credit upgrade When Fitch Ratings agency lifted Hungary’s sovereign debt out of junk status it was good news, but one more positive assessment is needed before the country can start borrowing cheaply. 3

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Government backs riverside project The state’s Eximbank loaned HUF 16.5 billion for a 55-hectare residential, retail and leisure development in Kopaszi-gát, an underdeveloped Danube riverside patch in south Buda. 8

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EDITOR-IN-CHIEF: Tom Popper DEPUTY EDITOR: Aniko Fenyvesi ASSOCIATE EDITOR: Robin Marshall NEWS EDITOR: Christian Keszthelyi EDITORIAL STAFF:

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Rosy numbers ignore real problems Numbers may not lie, but the people who use them sometimes do. Hungary’s unemployment figures dipped below 6% in February-April, according to the Central Statistical Office (KSH). But when counting people who have jobs, KSH includes Hungarians who work abroad, as well as those in the state’s workfare program. The figures show improvement, but they don’t show reality. In reality, the Hungarian economy has been doing moderately well – not as good as some of our Central European neighbors, but good enough to create a shortage of workers in many fields. Nonetheless, there is still a group of people who are stubbornly unemployed, including those on workfare, who earn less than the minimum wage for work like sweeping the street. These people make up an estimated 5% of the work force and they represent a structural problem. The government should be working on special programs that address their needs, not hiding their existence with funny numbers. Before the Fidesz government came in in 2010, there were far fewer people involved in workfare, and they were counted as unemployed. The current government has ordered the KSH to change the way it tallies unemployment – and the result has been much rosier figures. In a similar vein, officials are telling the KSH not to include Eximbank (Hungarian Export-Import Bank Plc.) in the government sector when figuring Hungary’s state budget deficit. Eurostat, the European Union’s statistics

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agency, has said that this is wrong, because Eximbank is a governmental, non-market entity. The head of the KSH and Hungary’s Ministry of Economy are still arguing with Eurostat over how to classify the bank – and this is no small accounting detail. Excluding Eximbank from the government makes Hungary’s official deficit seem much smaller, and allows officials to go deeper into debt in the next year or two, as they prepare pre-election budgets. But thus far, no one has given compelling reasons for letting the government dodge responsibility for the debt of Eximbank – which very much acts like a government institution and frequently makes loans to businesses and people who are favored by officials. Founded as the Hungarian Royal Central Statistical Office in 1897, KSH is a quasi-autonomous nongovernmental organization that was recently approved by a European Commission audit as being impartial. Their web site, ksh.hu, is a trove of easily accessible information about Hungary and its economy – a regular nerd’s paradise. Efforts to co-opt KSH’s leadership and functions for the benefit of the current government’s propaganda machine risk damaging the credibility of an excellent institution. What’s worse, they risk ignoring serious concerns, including the problem of long-term unemployment and an excessive government budget deficit. Instead of giving into the temptation to lie with numbers, officials need to do the math, understand our real problems and look for actual solutions.

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A dog eyes Lake Balaton in summer 1989, above. At left, a canine leaves the new dog beach opened by the Balaton city of Fonyód on May 31. Most beaches on the lake do not allow dogs, but officials say they expect Fonyód’s caninefriendly policy to attract more pet-owning tourists. Other towns on the lake are said to be considering their own beaches for our best friends.

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Co-head of Hungary’s Green party (LMP) quits  4

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Budapest mayor outlines future development  5

Half-way out of the junk heap While the upgrade by the Fitch Ratings agency was cheering news, Hungary still needs at least one more positive endorsement from a big agency, and current figures may mean that more upgrades are not forthcoming. ZSÓFIA CZIFRA

Hungary is now out of “junk status” at one of the large credit rating institutions. Fitch Ratings finally upgraded the country to investment grade on May 20, changing Hungary’s rating to BBB- with a stable outlook. Prior to the action, analysts had been split: While some were positive about an upgrade, others said the weak quarterly GDP data and some political uncertainties around foundations operated by the National Bank of Hungary might make Fitch further delay its decision. In its rationale, Fitch wrote that the combination of high current account surpluses, high European Union (EU) fund inflows, banks’ external deleveraging, the self-financing program and foreign currency mortgage conversion have contributed to a sharp improvement in Hungary’s external balance sheet and reduction in vulnerability. It also mentioned the sharp reduction in net external debt, down from 73% of GDP in 2012 to 43% of GDP in the third quarter of 2015. Fitch uses its own methodology for calculating net external debt which differs from that which the Hungarian central bank uses. Among the factors of medium importance that led to the decision, Fitch lists the government’s tighter fiscal policy, which, as the ratings agency says, has been consistent with a gradual decline in government debt from a high level. The agency forecasts that debt will slowly decline in the medium-term. The situation of the banking sector has improved, the rating institution noted. As an assumption, for its mediumterm government debt projections, Fitch assumes the government will maintain the budget deficit at around 2% of GDP, with real GDP growth at 2%, some depreciation in the exchange rate and a gradual recovery in prices towards the 3% target. Government debt will slowly decline in the medium-term, to 67% of GDP by 2022.

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Volume index of investment in Hungary. Corresponding period of previous year equals 100. (Source: Central Statistical Office)

Raiffeisen Bank’s chief analyst Zoltán Török said the upgrade confirms efforts to stabilize the economy in the past fourto-five years. Surprising timing

If another rating agency upgraded Hungary, savings due to the lowering yields could reach HUF 40-60 billion in the coming 1-1.5 years, Hungary’s Economy Minister Mihály Varga said right after Fitch’s action. The minister also said that the upgrade is a result of economic reforms the government implemented in 2010. He added that the government expects the two other major credit rating agencies to take similar action to Fitch. Although Hungary’s upgrade to investment grade has been in the pipeline for months, the decision was a positive surprise, given a series of reports that seemed to reduce the chances of an upgrade, according to Eszter Gárgyán, a Budapest-based analyst at Citigroup. She said Moody’s Investment Services might be the next to upgrade Hungary this year, followed by Standard & Poor’s next year. Others were not that surprised though: Raiffeisen Bank’s chief analyst Zoltán Török said the upgrade confirms efforts to stabilize the economy in the past fourto-five years. He added that a fiscal loosening this year and next was “not too serious” and the effect would be balanced,

in part, by policy measures boosting demand and contributing to economic growth.

Easing cycle ends The upgrade was not the only hot topic for the past fortnight: At its latest rate-setting meeting, the Monetary Policy Council of the National Bank of Hungary sent the key rate to another historic low mark when deciding to further cut it by 15 basis points to 0.9%. In a statement released after the meeting the council said: “With the current 15 basis point reduction the policy rate has reached the level of 0.9%, which ensures the medium-term achievement of the inflation target and a corresponding degree of support to the economy.” The MPC added that the inflation outlook and the cyclical position of the real economy point to maintaining the 0.9% base rate for an extended period.

How to kick start the economy In spite of the – as the government put it, well earned – acknowledgement by Fitch, the Hungarian economy is not out of the woods yet. According to business weekly Figyelő, the cabinet was so taken aback by the weak GDP figures for the first quarter of 2016 that Prime Minister Viktor Orbán was quick to order a “crisis meeting”, and as an outcome of the consultations, he asked for a proposal by the Economy Ministry on how to boost the economy. Ágnes Hornung, state secretary at the Economy Ministry in charge of finances, told Figyelő that a stimulus package is in the making, but revealed no further details.

Things to watch in the coming weeks Retail data for April will be released on June 3, although only first estimates, with the recent favorable trend expected to continue. Not so good news will arrive the following week: A second reading of the poor Q1 GDP data will be published on June 7, and industry figures for April will also be published that day. The consumer price index for May is scheduled for June 8, and construction data for April will come out on June 15. The latest figures on investments have not changed things for the better either: The volume of investments in Hungary was down by 9.6% year-on-year in the first quarter of 2016, the Central Statistical Office (KSH) reported at the end of May. The fall in investments was primarily the outcome of the completion of developments financed from EU sources, and was not a huge surprise as poor GDP data had already suggested that investments had also been hit hard by the drying up of EU funds. Data shows that private investments have been on a descending path for several quarters now. The volume of investment only grew in some sections representing small weight, such as investments in electricity, gas, steam and air conditioning supply, and developments connected to renewable energy sources.

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NEWS IN BRIEF M&A activities in Hungary exceed $9 bln in 2010-2015 More than 600 merger-and-acquistions transactions were carried out in Hungary in 2010-2015, with a total value of more than $9.1 billion, EY said in a market analysis published on June 1. The market performance of Hungarian M&A transactions were chiefly influenced by global trends, however, the country slightly lagged behind in its response to processes of the global market. EY added in the report that there is a significant correlation between changes in the country’s GDP and the number of M&A deals carried out in Hungary. Analysts are expecting gradual expansion in the following years, according to EY. More than 90% of the M&A transactions in the period were under $100 million in value, with the biggest deal being the Chinese Wanhua group’s purchase of Borsodchem Zrt. for $930 million in 2011, followed by Hungarian oil and gas company MOL’s purchase of Eni in Czech Republic, Slovakia and Romania, for more than $600 million, and Richter Gedeon’s investment in Switzerland with the purchase of PregLem for $442 mln. In the majority of the cases both the company making the purchase and the company being purchased were Hungarians firms active in the market in 60% of the cases during the period, the EY report shows.

Bank branch numbers fall 23% in Hungary The number of bank branches operating in Hungary fell 23% in the 2008-2015 period, Hungarian daily Népszabadság reported on May 23, based on data from the National Bank of Hungary. Raiffeisen cut the number of its branches by 58%, UniCredit by 51%, CIB by 46%, Sberbank by 39%, while Erste closed one-third of its branches in the country, according to the report. Népszabadság noted that the only bank to add branches in the period was FHB. The paper said most branches in the country are owned by Hungary’s OTP (210), followed by Erste (120) and Budapest Bank (96).

OECD lowers its GDP forecast for Hungary to 1.6%

The OECD on June 1 lowered its GDP growth forecast for Hungary to 1.6% in volume terms from the previous forecast of 2.4% published in their previous Economic Outlook in November, Hungarian news agency MTI reported. The OECD maintained its 3.1% projection for Hungary’s growth next year. “Growth is projected to moderate in 2016 due

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to a temporary contraction in public investment as a new cycle of EU structural funds commences, but should pick up again in 2017. Private demand should remain solid and employment should continue to expand,” the OECD said in the report. OECD raised the forecast for private consumption by 3.7% this year and the next, up from the 3.2% rise in the previous report. Gross fixed capital formation could decrease by 1.8% this year instead of the 3.2% fall predicted earlier and in 2017 it could expand by 6.9%, at a significantly faster rate than the 0.8% growth noted in the November report, MTI said.

Áder: Early ratification of climate deal ensures Hungary‘s seat in negotiations

Hungaryʼs early ratification of the Paris Agreement on global action to avoid dangerous climate change ensures the country a place at the negotiating table when rules for the deal’s implementation are drafted, President János Áder said on May 26, according to Hungarian news agency MTI. Giving an interview to Hungarian state-owned all-news channel M1 yesterday, Áder said lawmakers had ratified the Paris Agreement with a unanimous vote in Parliament, making Hungary the first European Union member state to officially back the deal, MTI reported. Hungary is in a good negotiating position as it is one of just 21 countries around the world whose economies grew while their emissions of greenhouse gases fell – because of improved energy efficiency, Áder said. The Hungarian Parliament voted formally on backing the Paris agreement that Áder signed at the United Nations Headquarters in New York in April. The agreement, which was signed by the leaders of 171 countries, including 60 heads of state and government, will take effect once 55 countries representing at least 55% of global emissions of gases responsible for global warming have ratified it, MTI noted.

Greenpeace: Paks upgrade ‘unviable without state subsidy’ The upgrade of Hungary’s sole nuclear plant in Paks, referred to as Paks II, is unviable without a state subsidy, and as such the project could distort competition on the market, Greenpeace says in its study published on May 31. According to Greenpeace, state subsidies for the project would likely have an incentivizing effect, as the project could not have happened in their absence. Greenpeace says in the report that Paks II has the “potential to distort competition on the Hungarian market as it would petrify the current

LMP co-leader resigns in frustration Above, Bernadette Szél, left, co-leader of Hungary’s Green party, Politics Can Be Different (LMP), and Erzsébet Schmuck, the party’s deputy faction leader, on June 1 announce that the party will elect a new co-leader by summer’s end. Saying it has become impossible to oppose the ruling party, András Schiffer (inset), founder and co-leader of LMP, announced his resignation on May 31, according to reports. Schiffer reportedly told his party’s steering board that he would resign as party co-chair as of June 1 and return to his mandate as a member of Parliament on August 31. Schiffer reportedly said ‘the current parliamentary cycle has clearly demonstrated that we do not have the intellectual atmosphere for pursuing politics that criticize the system.’ He reportedly said it was a sad fact that in neighboring countries such civil movements had a ‘much stronger footing’ than they do here, noting that ‘this country has not had a general strike since 1989.’ situation with the dominant market power of state-controlled generation companies”. According to Greenpeace, the demand for electricity in Hungary can be met at a lower cost through “electricity imports or other solutions, such as investment into energy efficiency measures or renewable energy”. The study says that the project “will likely have a crowdingout effect on the alternatives to nuclear power generation with lower costs than Paks II”. Citing the example of the recent renewable power auctions in Germany, Greenpeace says that such practices are more competitive given that “private capital can deliver the needed generation capacity in a cost-efficient way”. Based on a correlation analysis, the study found low correlations between power prices in Hungary and surrounding countries, and this fact could disrupt “the seamless trade between Hungary and neighboring countries”. Following an analysis of the market concentration in the Hungarian power generation market, Greenpeace says the study shows that the Hungarian state has a “dominant position on the Hungarian power generation market and this dominance will even be increased with the commissioning of Paks II”.

Varga: Government to set up fund for non-performing mortgages Hungary’s government plans to set up a special housing fund in which banks can place some of their non-performing

mortgages, National Economy Minister Mihály Varga told Reuters in conjunction with the Eastern Europe Investment Summit, Hungarian news agency MTI reported on May 31. “This would improve banks’ balance sheets, and would allow smaller provisions and increased lending,” Varga told Reuters in an interview for the summit at his office in Budapest. He said 40,00050,000 mortgages could be placed in the fund, adding that details would be announced after talks with all partners are completed. Varga told Reuters the government would probably close a deal to buy a 15% stake in Erste Bank’s Hungarian unit in the first half of June. The government decided to acquire the stake under an agreement reached with the European Bank for Reconstruction and Development (EBRD) and lenders in February 2015.

OLAF: Big concentration of suspected false claims in Hungary European Union funds provided to fraudulent claimants last year reached approximately €1 billion, with the biggest concentration of false claims allegedly coming from Romania, Bulgaria and Hungary, an annual report published May 31 by the European Anti-Fraud Office (OLAF) shows, according to Reuters. The report from OLAF states that €888 million in funds were probably disbursed to dishonest claimants in

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2015, dropping from the previous year’s €901 million, Reuters reported. Last year OLAF launched 45 procedures related to fraudulent claims; Bulgaria had 19 such procedures, while Hungary had 17, according to Hungarian online daily 444.hu. OLAF received 21 reports from Hungary on suspected false claims, 20 from the private sector and one from the public sector, 444.hu added. Out of the global €888 mln, OLAF was only able to get countries to pay back 187.3 mln. OLAF did not disclose the amount of EU funds in question for Hungary, 444.hu said.

Lázár: Orbán would repay scholarship in snub to Soros In order to demonstrate his political distance from Hungarian-born billionaire George Soros, Hungary’s Prime Minister Viktor Orbán is ready to repay the scholarship that he received from Sorosʼ foundation in 1989, Cabinet Chief János Lázár said on May 26. Speaking at his weekly press conference, Lázár said that the prime minister told him that if “Mr. Soros needs the money, those who received scholarships will pay them back,” according to Hungarian online daily origo.hu. In the last couple of weeks, Lázár and Orbán have been ratcheting up their criticism of Soros, who has been a strong advocate of the need to help refugees in Europe, and has also funded efforts to provide that help. Orbán advocates keeping refugees and asylum seekers out of Hungary and Europe. He has said it is essential to keep Muslims from “diluting” Europe’s Christian population and that keeping refugees out of this country is necessary to protect Hungarians’ “wives and daughters”. During his university years, Orbán received a scholarship from the Soros Foundation and spent four months in England, where he studied at Pembroke College, Oxford University, in 1989, according to his CV posted on the Parliament’s official website. Orbán halted his studies in England and came back to Hungary for the elections held in 1990. News outlets have noted that government spokesperson Zoltán Kovács also received a scholarship at the Soros-funded Central European University. Kovács, who was also present at the press conference, said he received the scholarship as part of his civilian life before 2001, and it has nothing to do with the political views he nurtures and political activities he has conducted after 2010. Lázár said that, just because officials once received funding from Soros does not mean they are beholden to the philanthropist. “It is a big problem if George Soros believes that scholarships provided by him should go hand-in-hand with promoting his views, without criticizing them,” Lázár told the press conference.

MFB cancels Zsolnay loan, liquidation can begin in 15 days Hungarian state-owned Development Bank (MFB) canceled the HUF 413 million loan provided to porcelain maker Zsolnay Porcelánmanufaktúra, and if the company fails to comply with the repayment scheduled in 15 days, the lender will start liquidation of the company. Confirming earlier press reports about the possible liquidation, Iván Szabó the legal representative of the local council of Pécs, Zsolnayʼs minority owner, told Hungarian news agency MTI on May 31 that the loan

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matured last August and was canceled on May 18 after a shareholders meeting. Not long after Zsolnayʼs majority owner Bachar Najari aired concerns of a “hostile takeover”, reports yesterday suggested the MFB decided to launch a liquidation procedure against the company in the event that it fails to comply with the loan repayment schedule. According to most recent reports, the local council of Pécs had already set up a company with the name Ledina Kerámia to take over the operation of the porcelain manufacturer in the event that it is liquidated, but this was not confirmed by MTI. Najari, a Syrianborn businessman, acquired a 74.5% majority stake in the company from now minority owner Pécs local council in 2013. Since airing his “hostile takeover” fears, the majority owner announced at a general meeting that he initiated the squeeze-out of the company’s minority owner.

Mayor tells of improvements, both past and future

OTP weighs Tesco purchase, scraps venture on business grounds Hungarian-owned commercial lender OTP Bank admitted that it had been considering the acquisition of the European portfolio of U.K.-based retail chain Tesco, but decided to scrap the idea based on the financial risks the purchase could cause, the lender told Hungarian online daily Népszabadság’s nol.hu on May 26. The bank was commenting on a report published in Hungarian weekly Figyelő, which suggested OTP owner Sándor Csányi had been asked to cancel his bid for the retailer by Prime Minister Viktor Orbán, fearing the impact it might have on Hungary’s political relationship with Poland. “The theoretical possibility of buying Tesco’s Central European network, either in whole or in part, came up at OTP Bank. In the early phase of consideration, it became clear that the acquisition would mean a disproportionately large burden and risk, compared to our planned exposure in the retail sector, thus negotiations did not even take place,” Hungarian news agency MTI quoted from the Népszabadság report. The lender also told the portal that Csányi is not planning to make investments in the retail sector. Speculation about Tesco pulling out of the V4 countries first arose in the fall, but Tesco has since said that it had concluded the restructuring of its portfolio with the sale of its South Korean unit and added that its operations in Central Europe can be expected to continue, MTI added.

State secretary: Government wants Uber to ‘line up’ The Hungarian government does not want to ban the operations of U.S.-based ride-sharing application Uber in Hungary, but would like the company to “line up”, in other words adhere to regulations that allow for fair competition, state secretary János Fónagy said on May 31, following negotiations with Uber’s Hungarian representatives. The state secretary said he had informed Uber that the government does not want to ban its service, nor is it against modern methods, online daily index.hu reported. Earlier reports suggested that the Hungarian government could even ban services like Uber if they do not follow the rules. Fónagy now says that the government simply wants to regulate the Hungarian operations of such services based on Hungarian laws.

Mayor István Tarlós speaking to AmCham on May 19. (Photo: MTI/Noémi Bruzák)

In a talk with the “Some trees must be chopped American Chamber of down, but wait and see what Commerce in Hungary, the riverbank will look like,” the mayor of Budapest the mayor said of plans for explained some exciting Danube-side development. plans for development renovation of M3 Metro line is a super of the capital. LEVENTE HÖRÖMPÖLI-TÓTH

Budapest has become a better place to live thanks to the development projects that have taken place in the past few years – and new projects will improve things even more, Mayor István Tarlós told a May 19 business forum hosted by the American Chamber of Commerce. Before talking about future plans, Tarlós presented a lengthy checklist of achievements, including the completion of M4 Metro line. He noted, however, that the M4 came with strings attached: The European Union funded the project on the condition that a congestion charge will be levied against drivers in Budapest. Currently there is a law that forbids its introduction. “The ban must be lifted by the end of 2017, otherwise the city will face heavy legal consequences,” the mayor said. Public transportation as such saw some major upgrades as well. Among other things, 850 buses have been replaced out of a 1,300-strong fleet since 2010, while tramlines one and three have been renovated. Hundreds of ticket machines have been put into operation thanks to an EIB loan, and a fully functioning e-ticket system should be up and running by December 2017. Popular destinations such as the Budapest Zoo and Margaret Island enjoyed important facelifts. On the island alone there are 33 ongoing projects.

Five- and ten-year plans And it doesn’t end there; more largescale projects are underway as detailed in the papers entitled “Budapest 2020” and “Budapest 2030”, respectively. The

urgent matter. “Metro cars will be only upgraded, though, since the budget of HUF 137.5 billion does not suffice to cover their replacement; the focus is instead on the improvement of the metro infrastructure,” Tarlós explained. One of the biggest undertakings is undoubtedly the arrangements related to flood protection. Measures have already been taken to make sure the Danube bank is better able to cope with floods, but more is to come, especially on Margaret Island and in the Csillaghegy area. Responding to criticism by environmentalists, Tarlós said: “Some trees must be chopped down, but wait and see what the riverbank will look like.” A heat generating waste management recycling facility, designed to handle 250,000 tons of waste per year, should go some way to appeasing the greens. The bath renovation program should also continue. Rudas has earned the first five-star bath title in the city, and Gellért can look forward to a similar ranking, while Széchenyi has been earmarked to have its machinery refurbished. Tarlós highlighted three more projects in the pipeline that rely on EIB loans of HUF 92 bln in total. “The Chain Bridge and the Castle Tunnel should be renovated from this money, the fogaskerekű [Cogwheel Railway] should be extended in both directions, and Blaha Lujza tér awaits complete reconstruction,” he said. He warned, though, that further success might be subject to a change of attitude, in particular on the part of politicians and journalists. “The practice that everybody criticizes one another for every little tiny detail needs to stop. There is too much hatred out there. The overall atmosphere in the city can improve only if this change happens,” Tarlós said.

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WHO'S NEWS Nagy & Trócsányi promote new partner

Dr. Viktória Szilágyi was promoted from associate to partner at independent law firm Nagy & Trócsányi, effective from July 1. Szilágyi, a Hungarian attorney admitted to the Budapest Bar, is the 12th partner at Nagy & Trócsányi. She graduated from ELTE, and has been working at the law firm for 12 years, having joined it immediately following her graduation. She specializes in M&A transactions, corporate and real estate matters and various industry specific legal work.

DVM group names new communications chief

Orsolya Simon (left) was appointed Marketing & PR Director of DVM. Simon will responsible for the overall communication of the integrated building services provider, with a special focus on the design, construction, project management and

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sustainable consultancy businesses, the press statement said. Before joining the DVM group, she worked for global property advisor CBRE for more than a decade, where she built up and ran the marketing and PR division in Hungary. Dr. Ildikó Rézműves (right), who had held the position since 2014, is now responsible for the strategic communication of the group’s property developer division. She is in charge of the complex market support of Horizon Development’s major projects (Váci 1, Szervita Square Development, Promenade Gardens) as well as the complete, operative marketing and PR management of six premium office buildings belonging to the Munichbased GLL Real Estate Partners’ portfolio in Budapest, the press statement said. “I am happy to welcome Orsolya to DVM group: I am glad we gained yet another skillful professional with international experience. Our 20-year-old, dynamic company has reached a new milestone,” Attila Kovács, managing partner of DVM group, said in connection with the promotion. “Our continuous improvement is reflected by our office’s recent move to the revitalized Váci 1 building. Our new HQ provides a more professional work environment that enables us to deliver an even higher standard of service to our clients,” the director noted.

Do you know someone on the move? Send information to news@bbj.hu operations since 2011. Petrányi’s role will cover CMS offices in Bucharest, Budapest, Kyiv, Poznań, Prague, Sofia, Istanbul and Warsaw. With more than 20 years’ experience in the region and based in Budapest, Petrányi has held a number of leadership positions, including deputy managing partner for CEE and co-head of the CEE TMC Group. Her experience in leading regional teams and cross-border projects includes nine years in an inhouse leadership position with Deutsche Telekom’s Hungarian subsidiary – one of the largest companies in Central and Eastern Europe. Her areas of specialization span from IT law, competition law, IP law, public procurement matters and general commercial contracts, to corporate restructuring and M&A. She joined the firm in 2009. “CMS is well positioned to meet all the complex challenges and opportunities faced by our clients,” Petrányi said. “My priorities are to build on our firm’s commitment to consistently provide our clients with the highest quality service and ensure that our teams work in a supportive and dynamic culture.”

Invitel names new CFO

Turk Telekom International names top marketer

CMS appoints new CEE managing director

Dóra Petrányi was appointed the CEE managing director of CMS and will be responsible for the managing and development of the firm’s operations in Central and Eastern Europe. Petrányi begins her four-year term with effect from May, succeeding Andrew Kozlowski who has managed regional

industry. As part of the reorganization, Kis will lead TTI’s market development, business development, marketing communications, strategy and product marketing, pricing and service procurement teams. “By this organizational transformation, TTI will have an exceptional visionary leader with big ideas and outstanding strategic management skills. We are delighted to have him in the lead marketing role for Turk Telekom International,” said Cengiz Oztelcan, CEO of TTI.

Albert Kis was appointed chief marketing officer of Turk Telekom International (TTI), effective from May 1. Prior to assuming this role, Kis served as CTO of TTI and was with the company for several years. He possesses not only superior technical skills but also a deep understanding of the wholesale business. The company expects the professional to bring “great value” to the company with his “leadership and wide perspective” on the international wholesale telco

Ákos Balogh was appointed Chief Financial Officer for Hungarian telco Invitel, on May 1. Before joining Invitel, Balogh worked for Nets Group in Scandinavia as regional financial leader. He also worked for Euronet Worldwide. He has international experience working in many different parts of the world, such as the Philippines, Switzerland, Thailand, Romania and also Hungary. He has worked for Philip Morris International and also GE Healthcare during his professional career. Balogh graduated from the Christopher Newport University in the United States, and completed the Financial Leading Platform of Harvard Business School. “I am sure that the complex knowledge Balogh acquired on international grounds in different market regions will pay off as a serious added value in the future for our company,” Invitel CEO David Blunck said. “I am happy to join Invitel. It is an exciting and an honorable mission to join a committed management and contribute to the future successes of the firm in this fast-changing innovative market,” Balogh said.

2016. 06. 01. 21:15

www.bbj.hu

2 Business

Budapest Business Journal | June 3 – June 16, 2016

PROMOTION

MVM’s solar energy system boosts business and the environment OUR SOLAR ENERGY SYSTEM SERVICE IS GOOD FOR BUSINESSES AND INSTITUTIONS that are

• • •

committed to applying renewable energy, willing to partly or fully compensate for their energy-consumption from their own energy-sources, wishing to establish solar energy systems with the help of MVM Partner Zrt. as an expert partner.

IN THE FRAMEWORK OF OUR SOLAR ENERGY SYSTEM SERVICES we do the following:

• • • • •

• • • •

Preparing alternative offers without any commitment from the ordering firm, Evaluating and measuring the place of establishment, Making binding offers for solar energy systems, Acquiring solar energy systems, Dealing with tasks in related to establishment, licensing, and other errands dependning on the place of installing the systems, Implementation following the related regulations, standards, laws and rules, Declaring the systems ready as well as contributing to the technical handover licenced for the network, If needed, handling the demands by the authority and network operator until the establishment, Preparing necessary documents and measurement registers.

WE ARE PARTNERS IN INNOVATION AND USING RENEWABLE ENERGY

Thanks to our services your business and institution protects our environment 1.4. What size of solar energy systems with the establishment and operation of does MVM Partner implement? a solar energy system. You will generate MVM Partner deals with the electricity with using environmentally- implementation of domestic-scale friendly renewable energy that can also power plants and well as small plants. support your electricity consumption demands. 1.5. What kind of rules and regulations

apply for solar power plants?

IF WE CAUGHT YOUR ATTENTION, • contact us at energiatudatossag@ • • mvmp.hu email address. • • FREQUENTLY ASKED QUESTIONS

1.1. What is a solar energy system, plant?

It is a system that turns solar energy directly into electricity.

1.2. What is HMKE?

It is an abbreviation of a Hungarian term meaning “domestic-scale power plant”, which is an electricity generating device that is connected to a low current network, and its connection performance at the place of usage does not exceed 50 kVA.

1.3. What is a small-scale power plant?

A small power plant is an electricity generating device that performance does not exceed 50 MW.

BBJ_2411_biz.indd 7

Law no.: 2007/LXXXVI Government decree no.: 273/2007. (X. 19.) MEKH regulation: 7/2014. (IX. 12.) Regulations of distribution

1.6. What kind of services are included in the establishment of solar energy systems?

Evaluation and measurement of the installation location, designing and planning of the systems, conducting the licensing process in its entirety, installation of the system and launching its operations.

1.7. Is it possible to connect to a KÁT system with a HMKE solar energy system?

As the 1. § 2. point of government decree no. 389/2007. (XII. 23.) does not regulate domestic-scale power plants, HMKE generated electricity cannot be sold through KÁT system.

1.8. How can the electricity generated in a HMKE system be sold?

•

In the case of domestic-scale power • plants the so-called balance cost accounting is applied between the • generator and the electricity trader.

1.9. What is balance cost accounting?

Implementation of the generator unit after the documentation is approved. Connection to the network and network usage contract is modified. Once declared ready, the measurement device is changed or reprogrammed and operations are launched. HMKE contract amendment is signed. The steps do not include the unique licensing tasks.

It is a method to be applied in the • case of HMKE, under which in the period of cost accounting (monthly, • biannual or annual) the trader counts the difference of the consumed and generated electricity in related to the 1.11. What errands does KÁT membership public network. go along with? The planned generating data for the 1.10. What is the process of licensing following twelve months need to be sent HMKE? to the KÁT accountable, divided into • As a first step a report of demand months and zone timing. The generating should be sent to the related scheduled for the next month need to be Distributor Licensee, with the supplied every month. Related figures can be changed on a daily manner on filled out domestic form. • The Distributor Licensee declares every working day by 10.00 am the that at the connection point latest. The exact generating schedules they are able to receive the are essential part of the KÁT system. performance through single- Differences beyond the tolerance value phase or poly-phase connection, the accountable of the system is entitled as well as ask for the connection to levy modification and regulation fee, documentation. in case of monthly and daily alterations, • Handing in the connection respectively. Detailed regulations for documentation to the Distributor such are available at the webpage of Licensee. MAVIR.

2016. 06. 01. 21:15

08 2Business

REAL ESTATE NEWS

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

Government backs Kopaszi-gát project State-owned Eximbank is loaning HUF 16.5 billion for the residential and office development in a cove along the Danube in south Buda. Parliament may also approve a fast-track designation for the project. A sketch of the proposed project. GARY J. MORRELL

index.hu reported. The justification of the government proposal to “fast-track” the Property Market Real Estate Development project says it is in Hungary’s interests Kft., a subsidiary of builder Market because new jobs would be created in Group, announced on May 24 that is the area and the development would be a finalizing permits for development of the good source of taxes. phased BudaPart office and residential Property Market, who purchased development in south Buda, located in a the disused site last year, describe park environment at Kopaszi-gát, a green, the project as a “new city quarter” on a underused cove on the bank of the Danube. 55-hectare site with office, residential, The project has strong government retail and leisure components in addition backing. Property Market Kft. received a to the possibility of a hotel. The Danish loan of HUF 16.5 billion from Hungarian architectural and urban planning studio state-owned Eximbank to fund the Adept has been employed to develop the development, according to reports master plan for the development. It has published on May 25. Furthermore, under worked on the planning of several largea bill proposal submitted to Parliament on scale residential and mixed-use schemes May 22, the investment would be given in northern Europe including the Royal “elevated significance”, which means Seaport project in Sweden. related licenses for the construction The first phase is planned to deliver could be acquired faster and easier, 16,000 sqm of speculative office space

in addition to a possible second building. Anders Lonka, a founding partner at This could include a 120-meter tower to Adept says the idea is to create a mixedbe designed by Hungarian architects. use neighborhood with large public The south Buda office sub-market spaces. “We have created diversified currently has a vacancy rate of around streets with open ground floors and a 5% compared to the average of 11% diversity in the height and look of the across the city, and is the most favored different apartment blocks. The site office location, along with the so-called provides access to the waterfront with Váci corridor. “The first phase is planned views of the river.” to be delivered in 2018 and with the low The complex has direct road links and vacancy rate I see no problem in leasing tram connections, although no direct such well located quality office space. metro connection. The development We are looking for pre-leases and will provides direct access to a 15-hectare soon announce a leasing agent,” said park, the area contains eight restaurants Gergely Árendás, managing director of and can attract as many as 10,000 visitors Property Market. on a good weekend. The phased project has the potential Quatar-based Constellation Hotels to deliver more than 200,000 sqm of Holdings, an experienced hotel investor, is office and residential space phased over the financing partner in the approximately a ten-year period in addition to a large HUF 200 bln project and additional debt residential component. financing is available if necessary.

Sale of V17 another sign of strong office market The environmentally friendly building on Váci út is already 80% pre-leased.

€55 million, making it the biggest single office transaction for some time.

Demand for investment product rising

GARY J. MORRELL

The investment market is showing continued signs of recovery as Magyar Posta Takarék Real Estate Investment Fund, managed by Diófa Fund Management, has completed the forward purchase of the 12,700 sqm V17 office building from Wing for an undisclosed fee. The BREEAM “Very Good” accredited building located adjacent to the Lehel tér metro station is 80% pre-leased to E.ON Hungary. The transaction will be completed once E.ON’s 600-strong staff has taken full occupancy in October. Aspectus Architects Studio designed V17 and the project is being financed by K&H Bank. “This outstanding concept, combined with the dynamism of the Váci út business district, has already proven its worth to Diófa Fund Management,” said Gergely Bíró, CEO of the fund management company. In a deal last year Diófa purchased the 17,000 sqm Infopark E at Infopark from Bluehouse Capital.

BBJ_2411_biz.indd 8

The V17 office building on Váci út. Features at V17 include natural ventilation of the building through the induction of fresh air. Natural sunlight will be maximized by large glazed surfaces that can be shaded as necessary. The construction was undertaken using recyclable materials with a minimal environmental burden. Hot water is provided using solar collectors and the building’s mechanical systems will be

individually regulated. The complex has a bicycle storage facility with capacity for 90 bikes, showers and changing rooms, as well as a system for charging electric cars. Already this year Zeus Capital Management has purchased the 21,000 sqm Váci Corner in the Váci út business corridor from HB Reavis. The transaction was concluded at an estimated price of

“Investment demand is higher than the available product on the market. However the pipeline projects for the next 18-24 months will help resolve this problem,” said Adorján Salamon, managing director of Eston International at its recent property market presentation at the Bank Center. “Even though we have had limited supply in recent years we expect a record of above €1 billion in transactions for the year.” He sees the traditional split in market sectors with the office market representing the majority of investment deals. Investors are considering both new-build and value-add acquisitions. Most investors are foreign funds, with the exception of Este Open-end Real Estate Investment Fund and Diófa. The conservatively minded large institutional German funds are finally looking at the Hungarian market again now that the country is once again regarded as a safe target. Eston International has been instructed on an open-market tender for a more than €100 mln asset. It sees prime office yields as compressing to 6.5% by the end of the year, retail around 6%, and industrial compressing to 8.25%.

2016. 06. 01. 21:15

GRUPPO T.F.M. KFT. 1068 Budapest, Király u. 102.

1ST DISTRICT

3RD DISTRICT

5TH DISTRICT

10TH DISTRICT

13TH DISTRICT

15TH DISTRICT

58 SQM – 3 ROOMS, MAGAS STREET

39 SQM – 1 ROOM, RAKTÁR STREET

55 SQM – 2 ROOMS, BALATON STREET

132 SQM – 7 ROOMS, ÁLLOMÁS STREET

33 SQM – 1 ROOM, CENTRAL PARK SUBDIVISION

220 SQM – 6 ROOMS, RÁKOSPALOTA

At the foot of the Buda Castle, this very well divided, quiet apartment in good condition has nice view over the city.

In a very green area, this renovated, bright apartment has fully ﬁtted kitchen and parking space in the garden of the nice style period building.

This two storey family house that needs renovation built on 450 sqm of lot, beneﬁts of 2 kitchens, 2 bathrooms, air conditioning system and garage.

18.900.000 HUF

This completely renovated, duplex apartment beneﬁts of 2 kitchens, 2 bathrooms, private gas heating, air conditioning system and alarm system.

In a new built subdivision with elevator, this very bright, high ﬂoor apartment has 10 sqm of balcony. Good connection to public transport.

42.900.000 HUF

This sunny apartment is in perfect shape and situated adjacent to Parliament and Ministry of Defence. Beneﬁts of a fully ﬁtted kitchen and perfect layout. 36.990.000 HUF

29.990.000 HUF

16.490.000 HUF

44.000.000 HUF

+36.1.201.0403

1ST DISTRICT

+36.1.430.1403

3RD DISTRICT

+36.70.3156.087

5TH DISTRICT

+36.70.646.6818

10TH DISTRICT

+36.70.414.7759

13TH DISTRICT

+36.70.398.8754

15TH DISTRICT

108 SQM – 3 ROOMS, BATTHYÁNY STREET

57 SQM – 3 ROOMS, GYŰRŰ STREET

59 SQM – 2 ROOMS, PETŐFI SÁNDOR STREET

300 SQM – 4 ROOMS, LADÁNYI STREET

106 SQM – 3 ROOMS, KATONA JÓZSEF STREET

222 SQM – 7 ROOMS, PESTÚJHELY

This very spacious, quiet, garden facing apartment has private gas heating and it is situated in a period building, close to the Széll Kálmán Square.

This renovated, very well divided, bright, high ﬂoor apartment has separate rooms, kitchen with window and it is situated in a completely renovated building with elevator.

In a very nice, elegant building with elevator, bright, street facing apartment on the 2nd ﬂoor, at Ferenciek Square. The apartment needs renovation.

This two storey family house in good condition built on 450 sqm of lot, has air conditioning system, 10 sqm of terrace and a garden pond in the well kept garden.

This very spacious, well divided, renovated apartment is situated in a well maintained building with elevator, adjacent to the St. István Circuit.

39.900.000 HUF

52.900.000 HUF

In a quiet street, this two storey family house built on 548 sqm of lot, has air conditioning system, 2 bathrooms, wardrobe room, laundry room, 33 sqm of terrace and garage.

42.900.000 HUF

+36.1.201.0403

2ND DISTRICT

17.400.000 HUF

+36.1.379.0506

3RD DISTRICT

+36.70.3156.116

5TH DISTRICT

+36.70.646.6818

11TH DISTRICT

41.299.000 Ft

+36.70.414.7759

67.850.000 HUF

14TH DISTRICT

+36.70.398.8754

DUNAKESZI

64 SQM – 3 ROOMS, FILLÉR STREET

710 SQM – LOT, DONÁT STREET

67 SQM – 2 ROOMS + HALL, MÚZEUM CIRCUIT

49 SQM – 2 ROOMS, NÁDORLIGET SUBDIVISION

40 SQM – 1 ROOM, RÓNA STREET

58 SQM – 3 ROOMS, DUNAKESZI ALAG

This completely renovated, top floor apartment benefits of separate rooms, fully fitted open kitchen, balcony and parking space in the courtyard. It is situated in a building with elevator.

This lot has 20% coverage possibility, electricity, gas and water on it. At the moment there is a 70 sqm building that needs renovation on it. It is located in a quiet and green street.

Completely renovated, street facing apartment with separate rooms, at Astoria, close to the main Synagogue. Alarm system and air conditioner are in the ﬂat.

In a new built subdivision, this very bright, high ﬂoor apartment beneﬁts of open kitchen and balcony and it is situated in a building with elevator.

This renovated, bright, street facing apartment has private gas heating and it is situated in a well maintained condominium. Good connection to public transport.

In Pest county, 20 minutes drive from Budapest. In a subdivision with playground, this garden facing mansard apartment has open kitchen, private gas heating and parking space.

41.900.000 HUF

19.900.000 HUF

42.900.000 HUF

15.000.000 HUF

18.800.000 HUF

+36.1.336.1706

+36.1.379.0506

+36.70.3156.116

7TH DISTRICT

29.400.000 HUF

+36.1.720.2433

11TH DISTRICT

+36.70.943.3097

2ND DISTRICT

3RD DISTRICT

185 SQM – 5 ROOMS, LIPÓTMEZEI STREET

286 SQM – 6 ROOMS, KENYERES STREET

134 SQM – 5 ROOMS, MURÁNY STREET

79 SQM – 3 ROOMS, KALOTASZEG STREET

53 SQM – 2 ROOMS, TÖRÖKŐR STREET

100 SQM – 3 ROOMS, DUNAKESZI ALAG

In a quiet side street, this very spacious, duplex apartment beneﬁts of private gas heating, balcony, winter garden and wine cellar.

This three storey, nice style, very spacious, renovated house operates as a restaurant at the moment. Parking space belongs to it in the courtyard. 86.900.000 HUF

This completely renovated, garden facing apartment beneﬁts of separate rooms, open kitchen, private gas heating and it is situated in a small condominium with common garden.

In a green area, in a building with nice common garden, this completely renovated, sunny apartment has nice view over the nearby gardens, air conditioning system and balcony.

This new built family house has 500 sqm of lot, living room with open kitchen, 2 bedrooms, terrace and garage.

75.000.000 HUF

In a period building with elevator, this very spacious, street facing apartment has private gas heating and sleeping gallery. It is located a few minutes walk from the City Park. 36.900.000 HUF

31.900.000 HUF

24.900.000 HUF

+36.1.376.6080

2ND DISTRICT

+36.1.430.1403

+36.1.351.0446

7TH DISTRICT

4TH DISTRICT

+36.1.720.2433

72 SQM – 3 ROOMS, BÉLA STREET

82 SQM – 3 ROOMS, HERNÁD STREET

126 SQM – 4 ROOMS, IGNOTUS STREET

This very spacious and sunny, top ﬂoor apartment has 30 sqm of living room, 4 bedrooms, balcony with panoramic views and two car garage.

This sunny, duplex apartment in good condition has separate rooms, private gas heating and connection to the common garden. It is located in a quiet side street.

Close to the City Park, this spacious and sunny apartment has separate rooms, fully ﬁtted kitchen and terrace. It is located in a period building with elevator. Price includes all of the furniture.

This very spacious and sunny apartment has private gas heating and nice view over the Városmajor Park. It is situated in a building that will be completely renovated this year.

15.900.000 HUF

39.000.000 HUF

57.000.000 HUF

+36.1.376.6080

2 DISTRICT

+36.1.782.7275

+36.1.351.0446

+36.1.789.2846

4 DISTRICT

7 DISTRICT

12 DISTRICT

140 SQM – 4 ROOMS, KILÁTÁS STREET

75 SQM – 3 ROOMS, HOMOKTÖVIS STREET

115 SQM – 4 ROOMS, ERZSÉBET CIRCUIT

220 SQM – 6 ROOMS, MÁTYÁS KIRÁLY STR.

In a new built building, this duplex apartment has panoramic views, living room, 3 separate bedrooms with 3 bathrooms, balconies, terraces and 4 parking spaces in the garage.

In a new built subdivision, this sunny apartment beneﬁts of 2 bathrooms, 2 balconies and private gas heating and it is located in a very green part of the district.

This spacious apartment offers a perfect solution for anybody seeking a renovation project in a nice period building, in the city centre.

On the Sváb Hill, next to forest, this duplex part of a house has panorama from the balcony over the Buda Hills, 2 bathrooms, private garden and garage.

112.000.000 HUF

35.300.000 HUF

+36.1.336.1706

+36.1.782.7275

39.990.000 HUF

+36.70.943.3097

DUNAKESZI

39.200.000 HUF

+36.70.399.0399

12TH DISTRICT

125 SQM – 5 ROOMS, GÁBOR ÁRON STREET

89.900.000 HUF

14TH DISTRICT

+36.70.399.0399

+36.70.3156.087

85.000.000 HUF

+36.1.789.2846

WELCOME

ARE YOU SEARCHING FOR APARTMENT?

WWW.TECNOCASA.HU CONTACT US: INFO@TECNOCASA.HU

EACH AGENCY INDEPENDENTLY OWNED AND OPERATED. • THESE OFFERS ARE VALID, TILL THE APARTMENTS ARE SOLD. • THESE INFORMATION DO NOT CONSTITUTE A CONTRACTUAL ELEMENT.

BBJ_2411_biz.indd 9

2016. 06. 01. 21:15

www.bbj.hu

2 Business

Budapest Business Journal | June 3 – June 16, 2016

CEU BUSINESS SCHOOL

The challenge of building a culture of compliance There may be two reasons why companies chose to establish a compliance department: One reason is expected integrity challenges – prevention. The other is that cases of corruption or fraud have been discovered – a cure.

Davide Torsello Associate Professor

A cure brings stress

Prevention brings fatigue

CEU BUSINESS SCHOOL

excessive pressure of having to build trust in the company they worked for. Trust is an uneasy conquest when your colleagues see you as a “cop” or a “spy” who has been imposed on them from one day to another.

The two reasons assume completely different scenarios. The first, prevention, calls for a commitment to integrity Compliance is in the headlines more and ethical values in general. Even an often these days, and more companies organization that does prevention to “tick are seeking to ensure legal and ethical a box” has to face the often-uncomfortable behavior. Thanks to the missionary presence of compliance officers, who end activity of the United States’ Foreign up significantly modifying the design and Corrupt Practices Act and the United processes of the organization. Reporting Kingdom’s Bribery Act worldwide, systems and communication strategies compliance officers are finding their are affected too, and often the company tasks and duties increasingly relevant to is slowed down significantly in its daily the lives of corporations. The importance routines. This is the price of establishing of compliance for business is growing a culture of compliance. exponentially. Is prevention the optimal solution? In Does this mean that business will appearance, yes, at least to follow the gradually become cleaner and corruption guidelines of the international antiwill fade away from newspaper articles corruption legal frameworks. The problem and blogs? Unfortunately, this does not is that prevention measures may bring seem to be the case. Corruption is alive fatigue to the organizational functions, and very much kicking in businesses and hardships in legitimizing the role and in governments, in spite of the new of compliance officers. The outcome of integrity warriors. It seems that the a small ethnographic research project challenge of changing old cultures to I conducted with compliance officers create a compliant culture can be hard to in multinational companies located in Budapest is that all of them felt the overcome.

A cure can be worse than prevention, however, if an organization has already experienced issues related to integrity. Whether a company has gone through a management crisis, or it has started some investigation, the emphasis is on building a complying culture. Since the cure is at stake, the role of compliance officers may be seen through less suspicious eyes, at least initially. However, the main point is that an organization that, because of corruption, is forced to re-motivate its employees and middle managers, to introduce new patterns of communication and reporting systems among departments, and to strengthen ethical behavior by all means, will suffer considerably. The loss of reputation, together with the fines, legal, audit and compliance expenses, are usually seen as the higher prices an organization has to pay for having indulged in corruption. In reality, however, few speak about the internal stress, at all managerial levels, that the organization has to experience, including the hard task of the compliance experts. This can perhaps account for the

relatively short duration of the complying culture shift in companies that are curing themselves. How many years can a complying culture remain operative? Anthropologists say that culture has two types of elements, one of which changes more easily due to inner or outer forces and pressures. The other, like value orientation, is more resistant to change. That is why, even under a violent colonial rule, it is naive to imagine that the subjugated culture will change dramatically and in all its essence. The positive changes brought in by the compliance culture may not be easily appreciated and enjoyed as long as the two aspects, the changing and the resisting, of an organization culture are not taken seriously. Understanding what an organization needs in order to be more compliant with the rule of law is a process that calls for more attention to changes of the structure, design, functions and inner dynamics of the company, in both the prevention and the curing modes. Davide Torsello is an Associate Professor and Director of the Center of Integrity in Business and Government at the Central European Business School. This column is part of a continuing series of opinion columns from experts at the Central European University Business School in Budapest. The opinions stated here do not necessarily reflect those of the Budapest Business Journal.

DR. ROSE PRIVATE HOSPITAL

DR. ROSE ORTHOPEDIC CENTER

DR. ROSE OBSTETRICS

DR. ROSE BUDAPEST PLASTIC INSTITUTE

DR. ROSE CORPORATE HEALTH CARE

7/8. SZÉCHENYI SQUARE 1051 BUDAPEST TEL.: +36 1 377 6737 WWW.DRROSE.HU

Private Hospital Obstetrics Orthopedic Center Budapest Plastic Institute Corporate Health Care

BBJ_2411_biz.indd 10

Dr. Rose offers an expanded range of services for its patients in an attractive and modern environment. Patients are offered examinations in 28 fields, preventive screenings and excellent specialists without any waiting time. Besides the Private Hospital, the Obstetrics, the Orthopedic Center and the Budapest Plastic Institute, we also operate a Corporate Health Care department. We provide our complex, premium quality health care services with up-to-date equipment and qualified staff amongst stylish surroundings in the heart of the inner city.

2016. 06. 01. 21:15

3Special Report BBJ

Law firms

Growth area: Protection of foreign assets

ď€´ 24

Civl Code changes are a break for banks

ď€´ 26

Judging local law firms

Lawyers in Budapest say M&A, property and finance are keeping them busy. We interview a host of local legal minds, and reveal their ranking by Chambers.

BBJ_2411_spec_report.indd 11

2016. 06. 01. 21:16

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

Assessing the legal landscape Lawyers from some of Budapest’s top firms describe the state of the market in Hungary and discuss trends they expect to impact their work in the near future. Dr. Kinga Hetényi Managing Partner Schoenherr Hetényi Attorneys at Law

Dr. Péter Lakatos Managing Partner Lakatos, Köves and Associates, Attorneys at Law

What are the trends in the Hungarian legal business? What sort of work keeps you busiest? M&A has clearly revived in the last six months. We have been involved in an almost “never seen” number of transactions. For example, after many years, we have again be requested to provide descriptive legal due diligence reports. There has also been an increase in competition law and compliance matters. Our banking & finance team is also working day and night, which indicates that banks are recovering and starting new projects.

What are the trends in the Hungarian legal business? What sort of work keeps you busiest? It is not easy to identify specific trends, particularly as the market has become more granular/ fragmented in recent years. Compared with the past, there is not an equivalent flow of large transactions. Our view of the marketplace is influenced by the fact that our client base is predominantly foreign companies (including local subsidiaries of foreign companies) in relation to their activities here. For such clients, an important distinction to be drawn is between matters involving the state and Do you think that the period for dramatic matters involving other commercial entities legislative change is over? Are there any – the state related deals inevitably have a upcoming legislative changes that you particular flavor, whereas the open-market expect will have a big impact? deals tend to be more predictable and An even bigger number of changes are orthodox. For the larger multinationals, still expected to come in Q3 and Q4 2016, a significant part of the work relates to as well as in the beginning of 2017. An regulatory and compliance issues, and their amendment to the Civil Code is currently day-to-day business, heavily influenced by being discussed before the Parliament. The legal changes, both locally and at EU level. most important amendments affect the Those larger businesses are generally not managing directors’ liability, securities and buyers in Hungary, but more frequently are the rules of the transfer of contracts. For sellers. Where there is transaction activity example, a completely new Code of Civil (e.g. M&A) it tends to be either arising Procedure is expected to be adopted in a from sales by large multinationals of their few months. This new Code is expected to businesses or an increasing number of restructure the civil procedures significantly. “succession sales”, which are a particular Within this framework the government feature in the region as businesses plans to introduce a new type of courts established in the ’90s are maturing and for the judicial review of administrative their owners are seeking exits. The buyers in decisions. New procecural rules are those circumstances can range from other expected to be introduced for this area similar companies, private equity houses, and also for administrative proceedings. It multinationals and (increasingly) regional is still being reviewed whether arbitration players – e.g. Polish companies buying rules should also be re-regulated. The peers in Hungary. Two areas where we see Government is also working on new rules particular activity currently are in real estate, for judicial execution and new rules for where there is a large amount of transaction company registration. activity, and litigation. Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? It is very difficult to predict whether the flow of new legislation over the last six years will continue. It seems likely that it will be as unpredictable as it has been in recent years.

Dr. Ágnes Szent-Ivány Managing Partner Sándor Szegedi Szent-Ivány Komáromi Eversheds, Attorneys at Law What are the trends in the Hungarian legal business? What sort of work keeps you busiest? The main trend we are experiencing in the Hungarian legal market is that, due to ongoing fee sensitivity on the client side, competition among law firms remains strong, or is even increasing. Most of the clients request quotes from several law firms before making the decision on which law firm to engage for legal work. This may be seen now in smaller matters as well. We are receiving more client work, especially in the areas of employment law, data protection, real estate law, construction law, litigation and immigration. Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? We believe that the legislative changes will continue. We expect material changes in the areas of civil procedure law as the Civil Procedure Code is under revision with substantial conceptual changes and the introduction of the so-called e-proceedings as of July 1, 2016. A completely new act is under preparation also in the field of administrative procedure law.

Dr. Zoltán Hegymegi-Barakonyi Managing Partner Kajtár Takács HegymegiBarakonyi Baker & McKenzie What are the trends in the Hungarian legal business? What sort of work keeps you busiest? There is a significant increase in compliance work, particularly, in the area of data protection. We prepare materials for clients including privacy policies, data processing agreements, consent forms and notifications to the data protection authority. Clients often request audits in this new high-risk area as the authority has been starting a number of investigations and is expected to become even more active after the new European regulation becomes effective in 2018. The increasing public funding resulted in a growing number of projects that are subject to public procurement rules. These transactions require legal advice for both contracting authorities and bidders. Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? Yes, some major legislative changes are expected in the coming year, among others, a new civil procedure, a new administrative court procedure and the implementation of the EU directive on damage claims for competition law infringements. The wave of legislative changes will likely slow down closer to the general elections.

Dr. Péter Berethalmi Managing Partner Nagy and Trócsány Attorneys What are the trends in the Hungarian legal business? What sort of work keeps you busiest? I believe that the market has been stabilized, no major players are expected to open or close business in the Budapest market. In terms of turnover, there has been no major change among the top 10-15 larger firms recently. Most of the larger firms generate a big portion of their business from state owned entities or governmental authorities. Mid-size law firms gain a larger and larger share of the market competing in all segments of the market. Transactional work, real property advice and litigations keep us busy. Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? The period for dramatic changes is probably over. Indeed, there has been much major new legislation adopted, including a completely new Civil Code and Criminal Code. As far as I know the government plans to amend the new Civil Code already in relation to liens (zálogjog) which will have an impact on businesses. Also, it is planning to lift partially the restriction on the fiduciary type of collateral. There are plans to create a completely new Civil Procedures Law but such a new law may come into existence only next year.

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Budapest Business Journal | June 3 – June 16, 2016

Zoltán Nádasdy Managing Partner Noerr & Partners

Dr. Tamás Polauf Co-Managing Partner CHSH Dezső & Partners, Attorneys

Ulrike Rein Head of Management Board Oppenheim

What are the trends in the Hungarian legal business? What sort of work keeps you busiest? We see clear signs of the market moving again and there are new investors looking for assets and investment opportunities in general in the country. A particularly positive development is the impact of the reduced level of VAT for construction, which has led to an uptake in development projects. This positive trend also appears in the services industry and to a degree in the M&A market but real estate project development seems to be the big winner, as high demand and low interest rates have led to a price increase in the market with more cash available to invest instead of keeping it in the bank.

What are the trends in the Hungarian legal business? What sort of work keeps you busiest? Since 2015, there has been an appreciable increase in M&A and real estate deals both in Budapest in general and for our firm in particular. One of the fields where our firm is particularly strong is public procurement, and with the increased payment of EU funds, it has been an area for growth for us. As banks remain wary of lending, economic growth is fuelled by EU and government funding, which account for about 80% of all investments. Only the large carmakers represent an exception in this regard. There are very few law firms in Hungary that are able to provide support for contracting entities and tenderers alike in the public sector. The Hungarian Competition Authority has become increasingly assertive in cartel cases, and therefore we strengthened our competition law group so that we can help our clients with some of the best experts in the business.

What are the trends in the What are the Hungarian trends in the legal business? Hungarian What sort of legal business? work keeps you What sort of busiest? work keeps you We see an increase busiest? in business in On the M&A marareas relating ket, a definitively to the following positive tendency developments: is that it is no Companies longer strictly are devising strategies to protect their investors from the investments. This includes mergers over U.S. or Western the border in Europe, sale of certain Europe looking to invest but that there is an portfolios, M&A activities to streamline increasing number of CEE-based investors and structure the business. However, it also increasingly active in Hungary. Looking includes disputes (international arbitration), at specific sectors, the real estate sector is especially in those parts of the industry “booming”. I have some concerns, however, over the energy sector. The government has where exit strategies are limited due to decided to take a much stronger role on the very nature of the specific investment. Also, we see much work in connection with the sector all across the production chain. investigations by the competition authority, Because of the regulatory interventions, mostly the price control related mainly into cartels and bid rigging. government efforts, combined with the now heavy investments and acquisitions by Do you think that the period for dramatic legislative change is over? Are the state, some international energy utility there any upcoming legislative changes companies are leaving the country, selling mostly USP businesses to the state. This that you expect will have a big impact? is a kind of soft re-nationalisation and its One important act will certainly be the impact on the sector in the long run is still new civil procedure code. This new uncertain. Another fast developing legal piece of legislation is expected to make area is our litigation, dispute resolution litigation more efficient by introducing (LDR) practice. Local litigation practice is modern techniques. We are proud to say also very active as disputes are growing that one of our partners and a member with the business in general, even if there of the managing board of Oppenheim, is in most of the cases an attempt or even Tamas Eless, professor at the Budapest an amicable solution before opening court University, is a member of the commission procedures. entrusted to prepare the draft of the new civil procedure code. Do you think that the period for dramatic

Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? In our understanding and experience the period of quick and vast legislative changes is over. It is also important for the investors to be sure that they shall not “price” the higher risk of rapid legislative changes.

Dr. Tamás Szabó Managing Partner Szabó Kelemen & Patners, Attorneys What are the trends in the Hungarian legal business? What sort of work keeps you busiest? There is fierce competition on the market. Some of the international law firms left the market (e.g. White&Case, Gide in 2015 due to lower revenues and lower profitability). Our law firm was busiest in the M&A, Banking, Real Estate and Tax practice areas. The State (as regulator) and state-related entities are important players and strong market participants. We acted in several large deals (e.g. sale of Budapest Bank, purchase of MKB) and also in smaller cases for them (e.g. MNB, municipalities). Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? The structural changes are over, but the legal environment will continue to change. We expect that many detailed and technical rules will come into effect, for example the new Act on Civil Procedure. This will have some impact on the legal services, among others for the dispute resolution practice.

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Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? I do not expect many more dramatic changes. In light of trends in the EU, however, I believe that there will be major changes in data protection and consumer protection legislation.

David Dederick Managing Partner Weil, Gotshal & Manges What are the trends in the Hungarian legal business? What sort of work keeps you busiest? There has been a very noticeable improvement in the commercial real estate investment sector, with a number of new players arriving, such as Lone Star Funds (now majority owner of GTC - Globe Trade Centre) and TPG (the new owner of TriGranit Corporation). This follows a number of years after the 2008 financial crisis in which investment in commercial real estate in Hungary was significantly diminished. Several international law firms with real estate practices have become very active in the sector, while others now appear to be trying to build the practice. Another area in which we have seen improvement in the flow of legal business is the banking sector. To an extent, the developments are linked as many real estate investors employ leverage in their investment strategies. Do you think that the period for dramatic legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? We do not consider that the rapid pace of new legislation will completely abate, although it most likely will not continue at the prior pace, in particular in comparison to the first four-year term of the current Government. One difference between the current term and the first is that the governing parties no longer have a two-thirds majority in Parliament, which enabled extraordinary legislative measures without opposition support, such as the adoption of a new Constitution. The new Civil Code, which came into force just over two years ago, has certainly had an impact on legal business, as it touched on a broad range of subject matter, for instance company law and secured transactions. The changes were extensive, and this has fueled the need for legal advice and interpretations.

Zoltán Faludi Managing Partner Faludi Wolf Theiss, Attorneys at Law

legislative change is over? Are there any upcoming legislative changes that you expect will have a big impact? As a result of the accelerated legislative activity, investors were concerned with the perceived regulatory or political risks associated with the country. This was a real concern since 2010 but by now I think it is good to see that foreign private investors are not deterred by default anymore but simply price this risk in. The structural legislative activity should be slowing down, though the government passing new legislation and modifying the rules of the game that are tailored for specific economic situations, benefiting defined market players, is rather a concern for both domestic players and foreign investors. The incentivising regulatory framework for the renewable energy sector is still missing. This would bring in new wave of investment and will certainly, as it happens in other EU countries, change the rules of the game in the energy production sector with significant effect also on electricity trading and supply prices.

2016. 06. 01. 21:16

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Budapest Business Journal | June 3 – June 16, 2016

Weil’s Budapest Office Celebrates 25-Year Milestone Weil first set up shop in Budapest 25 years ago and its office has become an integral part of the prestigious New York law firm’s expanding global operations. Managing Partner David Dederick and Senior Partner Konrád Siegler speak about the firm’s evolution during the time from the first big wave of privatization in the early 1990s to diversification that has helped Weil grow its practice despite dramatic shifts in the market. a fascinating place at a very historic time, changing rapidly. You could also feel good about the work because of the sense that the changes were How has your office evolved bringing about improvements for the in the last 25 years? David Dederick: Originally, country. One of our biggest clients then I came to Budapest in 1991 on a two was the U.S. Government’s enterprise week assignment but ended up staying fund program. It was designed to kick much longer. The changes since then start the development of the market are breathtaking when you consider the economy through the establishment of a conditions in which we used to operate. private equity fund to invest in private Our first office was set up in a residential businesses. I was seconded to the building in Buda with four lawyers. At organization for nearly two years and the time, modern office buildings were in acted as its internal lawyer. short supply. We had one telephone line, which was remarkable considering that KS: Even as a Hungarian lawyer it was in those days getting a telephone line very challenging at the beginning of the could take as long as a year. There were ’90s because the entire legal regime had mobile phones, but they were the most gone through significant changes. Most comical looking devices. They came of what we learned at university was with a shoulder strap because the phones useless. There were hundreds of new were so heavy. Today, we’ve grown to laws being passed every year, and there a professional staff of 28. It’s a good was no one to turn to for professional size that helps us fulfill all our client’s consultation on Hungarian legal matters needs. Our offices are now in a first class because there were no precedents, no office building located in downtown one had practical experience and there Budapest equipped with state-of-the- were no experts. New laws were being art professional tools and technology passed in a whole range of areas where meeting international standards. previously there was no legislation, such as securities, banking, competition or Konrád Siegler: I’m newer to the firm, corporate law. We had to learn fast and but have participated in Weil’s Budapest figure out how to work independently. venture for half of the past 25 years. I Nonetheless, it was a fantastic time started practicing law in Hungary in because we were all happy about the 1991 with another international law firm political, economic and social changes. so I experienced the same challenges It was also a positive development at the beginning of my career. Since that the presence of a large number of that time, nothing has remained the international firms, most from the U.S. same except client demands. The first or U.K., made the Anglo-Saxon style of big change for international law firms practice and legal culture the norm here. in Hungary was in the second half of the ’90s, when the privatization wave What are some of your ended and many firms decided to leave key achievements at the Budapest office? the market. But their Hungarian lawyers remained and, together with a new DD: I think succeeding where other generation of Hungarian lawyers, now strong competitors have not is dominate the Hungarian legal market. something we can be proud of. We Fortunately, Weil decided to face the new continue to thrive in a market to which other firms could not adapt. Adaptation challenges and remained in Hungary. is a big part of the story. Hungary was a What was it like to come to crowded marketplace in the ’90s during Hungary in the early ’90s? privatization because it was a kind of DD: When I arrived we had a gateway to the region. We’ve seen that very small office and there was no way boom diminish to what is now a more of handling staffing matters the way we normal level of activity with the same did in the U.S. I was allowed greater amount of, albeit different, challenges. responsibilities and autonomy and this really had a way of putting career KS: We are very proud of our excellent development on fast forward. It was standing on the Hungarian legal BBJ STAFF

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“Even as a Hungarian lawyer it was very challenging at the beginning of the ’90s because the entire legal regime had gone through significant changes. Most of what we learned at university was useless. There were hundreds of new laws being passed every year, and there was no one to turn to for professional consultation.” – Konrád Siegler, Senior Partner

2016. 06. 01. 21:16

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Budapest Business Journal | June 3 – June 16, 2016

penetrate major Hungarian corporates DD: Many international firms have left Hungary, and as Konrád mentioned a and banks. Finally, from Budapest we help cover newer form of competition has emerged – the South Eastern European markets the “leave behind office” – those lawyers where we do not have offices. Some of who stayed in Budapest and continued our biggest and most important projects to work together after their international in the Budapest office in recent years firm pulled out. Because these lawyers have been in countries such as Romania, were trained by international firms, Croatia and Montenegro, to name a few. they can often offer their clients similar More recently, the Hungarian State services at cheaper rates. A number of has become an active participant on these operations perform well on the the M&A market and has been buying market. up numerous assets. From a global perspective, this is quite a unique KS: Also, quite a few independent situation, and it is also helping keep Hungarian law firms have risen to the international law firms busy when the challenges over the past two decades and are now able to deliver high quality private sector M&A market has slowed. services to domestic and international Do you see any concrete clients. direction for the firm and how do you anticipate What are your most changes in the markets? important sources of DD: We always have to be prepared for business these days? changes in the markets. We’ve evolved KS: We generate most of our revenue on many occasions and will continue to from domestic clients, meaning do so. The direction we’re heading in Hungarian companies and the local now is to continue to build a balanced subsidiaries of multinationals. We are portfolio of practices in which we do also quite proud that we are a significant litigation and regulatory in addition “exporter” of business to the firm. In to deal work. We have a much broader other words, attorneys here generate offering of specializations than in the opportunities for lawyers in other offices, earlier days. such as New York, Washington D.C and London. The level of business we KS: That’s the model of Weil worldwide, generate for other offices of the firm is to have a balance of practices: on average practically the same level as transactional practices, which are what we generate in Budapest, a sort of booming when the markets are up and doubling effect. bankruptcy, restructuring and litigation, which can be busy when markets are How do you address the down. This provides a healthy balance challenges of work-life for the firm globally. We try to achieve balance among your people? this in the Hungarian market as well DD: This is something that the firm is and it is a strategy that has proved very well regarded for across all offices. We have a number of programs that are successful. geared towards associate satisfaction, DD: For example, we had one of our such as flex time arrangements that give best years in Hungary in 2009, which lawyers the flexibility to work on a less is not what one would have expected than full-time schedule. We also allow at the peak of the financial crisis. We flexibility to work from home periodically, had roles in the Lehman Brothers and and provide lawyers with the technology General Motors bankruptcies and the to do so. We currently have two lawyers AIG restructuring outside of bankruptcy. who are working moms on flex-time. Ongoing deal work from before the They are excellent lawyers, have LLM crisis continued, but took more time degrees from prestigious U.S. law and got harder to close, and then all this schools and have passed the New York bankruptcy and restructuring work came bar. If we didn’t provide such flexibility, in. Our balanced range of practice areas they might find it difficult to work at all. made it a great year for the firm and the In that respect, without such programs, we would miss out on a pool of really Budapest office. talented people with extraordinary skills. Do you collaborate with other Weil offices? KS: We have a number of diversity DD: On a firm-wide basis, we programs, including “Women at Weil”. have very strong capabilities which We understand that work-life balance we can bring to bear when needed for has become increasingly important in certain matters, but I wouldn’t say that Hungary since the ’90s. Obviously, we we depend on them. We do most of the want to keep our best people, so we do work ourselves, although we can turn to everything we can to help create the other offices for specialized expertise. right balance and a collegial working We are a fully integrated part of the environment. As mentioned, turnover firm and seamless cooperation among among our professional staff has been multiple offices and practice groups is very low and this reflects very well on the firm as well as our local efforts to a part of the client experience. help colleagues find the right balance KS: Legal business is very much between their professional and private connected to the relevant jurisdiction. life. So, although there are good possibilities for collaboration with other offices, the essence of the required knowledge must come from Hungarian lawyers.

“Adaptation is a big part of the story. Hungary was a crowded marketplace in the ’90s during privatization because it was a kind of gateway to the region. We’ve seen that boom diminish to what is now a more normal level of activity with the same amount of, albeit different, challenges.” –David Dederick, Managing Partner market and our recognition as a leading opportunities. firm in all of our key practice areas, Initially, we mainly focused on such as Corporate/M&A, Banking & transactional work for foreign clients, Finance, Capital Markets, Real Estate, inward investment and privatizations. Dispute Resolution and Restructuring/ When that wave of work slowed, we Insolvency. We are also very proud of developed a dispute resolution practice. our excellent dedicated legal and support Up until then, we had not done litigation staff and that turnover of personnel has in Hungary, but nowadays it can be as much as a third of our billable time. been traditionally very low in the office. We’ve also built regulatory practices in areas such as financial services, TMT What do you think has - telecom, media technology, energy, helped you adapt to the healthcare and competition. By adding rapid changes of the past new practices and capabilities, we are two decades in Hungary? DD: We have evolved over the years able to balance out the ups and downs of by increasing the number of practice deal flow and the M&A market. areas, acquiring important new In addition, when Konrád joined in domestic clients and realizing regional 2004, he played a central role in helping

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What sort of competition has emerged since Weil has been present in Hungary?

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2016. 06. 01. 21:16

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Budapest Business Journal | June 3 – June 16, 2016

Top-ranked law firms BELOW IS THE LIST OF LAW FIRMS WITH INTERNATIONAL AFFILIATIONS OPERATING IN HUNGARY THAT HAVE BEEN RECOMMENDED IN THE MOST AREAS OF LEGAL ACTIVITIES IN 2016 (IN TOP CATEGORIES OF VARIOUS RANKING BODIES, E.G. BAND 1 WITH CHAMBERS EUROPE AND CHAMBERS GLOBAL AND TIER 1 WITH LEGAL 500 AND IFLR 1000). CHAMBERS GLOBAL 2016 BAND 1

CHAMBERS EUROPE 2016 BAND 1

LEGAL 500 2016 TIER 1

IFLR 1000 2016 TIER 1

TOTAL NUMBER OF RECOMMENDATIONS

CMS Cameron McKenna LLP

Réczicza Dentons Europe LLP

Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

Andrékó Kinstellar

Horváth & Partners DLA Piper

Oppenheim

Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Szecskay Attorneys at Law

Lakatos Köves and Partners

Allen & Overy

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Budapest Business Journal | June 3 – June 16, 2016

Top-ranked law firms CHAMBERS GLOBAL 2016 BAND 1

CHAMBERS EUROPE 2016 BAND 1

LEGAL 500 2016 TIER 1

IFLR 1000 2016 TIER 1

TOTAL NUMBER OF RECOMMENDATIONS

Erős Ügyvédi Iroda/Squire Patton Boggs

Forgó, Damjanovic & Partners

VJT & Partners

Nagy & Trócsányi

Faludi Wolf Theiss

Danubia Patent and Law Office LLC in cooperation with Sár & Partners

Jalsovszky Law Firm SBGK Attorneys at Law

CHAMBERS GLOBAL 2 016 LEGAL ACTIVITIES

BAND 1

Banking & Finance

Andrékó Kinstellar CMS Cameron McKenna LLP

Corporate / M&A

CMS Cameron McKenna LLP Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Dispute resolution

Nagy & Trócsányi Oppenheim Szecskay Attorneys at Law

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BAND 2

Allen & Overy Horváth & Partners DLA Piper Lakatos Köves & Partners Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Allen & Overy Andrékó Kinstellar Lakatos Köves & Partners

CMS Cameron McKenna LLP Réczicza Dentons Europe LLP

BAND 3

Faludi Wolf Theiss Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

Faludi Wolf Theiss Forgó, Damjanovic & Partners Oppenheim Schoenherr Hetényi Attorneys at Law Szabó Kelemen & Partners Szecskay Attorneys at Law

Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves & Partners Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

BAND 4

Gárdos Füredi Mosonyi Tomori HP Legal | Hajdu & Partners

bpv Jádi Németh Attorneys at Law Erős Ügyvédi Iroda/Squire Patton Boggs Jeantet Nagy & Trócsányi VJT & Partners

Gárdos Füredi Mosonyi Tomori Szabó, Kelemen & Partners Attorneys

2016. 06. 01. 21:16

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Budapest Business Journal | June 3 – June 16, 2016

Award-winning firms see busy times in property, financing We interviewed the managing partners from four local law firms that have recently won awards for their outstanding performance. They told us their secrets for success, and assessed current market trends. LEVENTE HÖRÖMPÖLI-TÓTH

DR. ANDRÁS POSZTL COUNTRY MANAGING PARTNER HORVÁTH & PARTNERS DLA PIPER Law firms can win many different kinds of prizes, but the Chambers Europe awards are considered particularly prestigious. Chambers’ 150-person independent research team evaluates the cream of the crop of the European legal services market, applying stringent criteria. DLA Piper triumphed in that competitive environment, winning the International Law Firm of the Year for Hungary. “Our firm was short-listed for four years in a row for the award, our efforts bore fruit at last,” says Dr. András Posztl, country managing partner. He admits that success goes hand-in-hand with being on stand-by mode around the clock. “We have been full of great projects in the past five or six years, but 2015 turned out to be the busiest year since 2007.”

Dynamism has been apparent on all fronts, but transactions and crossborder arbitration cases received special emphasis. In the energy segment, the government’s pro-active economic policy has been responsible for a lot of transactions where DLA Piper was involved. But the financial sector did not remain immune to state intervention, either. The sale of MKB gave an opportunity for DLA to deliver its expertise, together with JP Morgan. Positive trends affected all areas of business. “Investor activity has been exceptionally high even in the food sector. One of the biggest stories was the purchase by the second largest player in the global frozen food sector of Fornetti, a Hungarian brand, and DLA made the deal happen from the legal perspective,” Posztl says. After such a busy period it is far from surprising that revenues jumped by 30% from the previous year’s figures. “Around 20% of our turnover stems from the public sector, however, growth was hardly an issue there. This shows that it is the private sector fueling growth,” DLAʼs country managing partner adds. The firm has long since got used to hastily changed laws in the country. What keeps the legal community excited now is rather the upcoming comprehensive amendment of the Civil Code. “Although market expectations were higher, with more comprehensive changes to the regulation of collaterals and more clarity on what corporate rules are cogent, the very recent draft is less ambitious. It amends certain rules on security interest (pledges). By re-introducing the independent mortgage, clarifying the provisions on the appointment of the security agent, the sub-mortgage and cash and securities deposit, it aims to reflect market feedback and it further facilitates the operation of the financial sector. However, compared to earlier

expectations, it does not bring changes with respect to the collateral registry. A comprehensive amendment requires thorough discussions, but when that amendment does happen, it is bound to help investors,” Posztl says. DR. GABRIELLA ORMAI MANAGING PARTNER CMS CMS is doing more than fine nowadays, not least thanks to two key awards the firm pocketed recently. Chambers Europe named CMS “Law Firm of the Year 2016 in CEE”, which clearly reflects its pre-eminence in the region. CMS also came out on top in the Central Eastern Europe category of the Legal500 ranking, as it was ranked as a top-tier firm in 30 practice areas. “We are very delighted about these recognitions,” says managing partner Dr. Gabriella Ormai. “It is even more pleasant that one of our colleagues from the Budapest office, Dóra Petrányi, has been charged with managing the operations of CMS in the whole region.” This latter move is another sign that expertise is abundant at the Budapest headquarters, which has been sought after in several key areas by a growing number of clients. “The volume of work has been spectacular, especially in the banking sector where portfolio transfers took place in high numbers,” Ormai explains. That phenomenon was greatly facilitated by a legal change that now allows the transfer of several types of products in one go without requiring client approval, only a National Bank of Hungary permit. Certain departments such as those dealing with competition law, employment, and public procurement have continued to operate at the highest

possible capacity. But others are picking up as well. “Since the property market is recovering, our property lawyers are kept busy at last. It helps that less money has been flowing to Poland, from which the country can profit,” Ormai says. Positive macroeconomic developments are finally trickling down to affect daily business. On the legal change front, companies should prepare for more stringent regulation in the field of data protection. “This, in fact, has an effect on the EU level and it concerns personal data processing,” Ormai highlights. Related rules have always been complex, but now it has reached a whole new level. “What entities need to watch out for is that they can expect heavier fines in the case of violating the rules. Fines will not reach the heights normally applied by the Competition Authority, but they will increase substantially. It will be well worth observing the new regulations.” DR. CSILLA ANDRÉKÓ MANAGING PARTNER KINSTELLAR Kinstellarʼs recent “Law Firm of the Year Central Europe Award” from the magazine The Lawyer is another indication that the regional player is on the right track. Managing partner Dr. Csilla Andrékó is more than pleased that the firm’s efforts have been recognized. “We take great pride in finishing first in the entire region. We are thus also assured that we are a major player,” she says. Accordingly, everyday business is great: High-profile cases are being handled one after another. The previous year featured the refinancing of Budapest Airport, among many other matters, where Kinstellar acted as the legal

Local knowledge, global connections We tailor our services to suit the needs of each Client, combining our understanding of law with a broader commercial awareness to achieve Clients' objectives whilst safeguarding their interests. Our law firm and attorneys are ranked and recommended in Legal 500 and in Chambers Europe in different fields of business law, like commercial and corporate law, competition law, M&A, energy law, employment law, dispute resolution, banking and finance, real estate, IT and TMT. Sándor Szegedi Szent-Ivány Komáromi Eversheds Attorneys at Law T:+36 1 394 3121 office@eversheds.hu www.eversheds.hu H-1026 Budapest, Pasaréti út 59.

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Dr. András Posztl Country Managing Partner Horváth & Partners DLA Piper

Dr. Gabriella Ormai Managing Partner CMS

representative of the senior creditors. “The energy sector was equally strong. Our role in relation to the transfer of E.ONʼs gas customer portfolio must definitely be highlighted here,” Andrékó says. A lot has been going on lately in terms of competition law. Since many banks were concerned by antitrust proceedings, Kinstellarʼs legal competence came in handy. Economic growth clearly also has an impact on revenues. “Our focus has always been on bigger transactions, and now their number has grown substantially. This dynamism applies to segments that were dead until two years ago, such as real estate, for instance, where there has been a spectacular surge,” Andrékó explains. “In that area, in particular, finance is on the rise too. More importantly, it’s no longer about refinancing old loans, but rather fresh money is seeking its place vehemently.” The only bottleneck is that really good projects are few and far between out there, and many transactions are generated by the state.

As far as upcoming key legal amendments are concerned, businesses should mark July 1 in their calendar. That is when a set of rules of the Hungarian Civil Code will hopefully change, more specifically in relation to securities. “Several provisions which were crucial in larger financing transactions were difficult to interpret correctly because they were ambiguously drafted or could not serve their purpose. Collaterals are of huge importance to creditors, so we are scheduling some of our finance deals to close after the new amendments take effect on July 1,” Andrékó says.

Budapest Business Journal | June 3 – June 16, 2016

Dr. Csilla Andrékó Managing Partner Kinstellar

commented on the significance of the freshly received National Law Firm of the Year Award from the International Financial Law Review (IFLR). Réczicza joined Dentons, together with a group of approximately 40 lawyers, in 2015 and evidently their efforts at their new firm have paid off. “We applied for the IFLR awards with matters where both teams worked together. So the newly built team functions seamlessly,” Réczicza adds. The IFLR award exists to recognize the most innovative law firms and deals in Europe, and the recognition of Dentons in 2016 can largely be attributed to the Budapest office’s scope of activity covering major cross-border transactions in Hungary and elsewhere DR. ISTVÁN RÉCZICZA in the CEE/SEE region. MANAGING PARTNER Key areas of specialization feature RÉCZICZA DENTONS regulated industries such as energy and telecommunications. “These areas have “This is crucial validation for us, since always belonged to our core business, it completely justifies our decision to and we maintain a leading role here,” transition our team to Dentons last Réczicza notes. year,” István Réczicza, Managing As to Hungarian market developments, Partner at Réczicza Dentons Europe LLP, the revival of real estate is surely a factor

Dr. István Réczicza Managing Partner Réczicza Dentons

to keep in mind. “There is immense interest on the part of both domestic and foreign players out there. The volume of financing and the number of transactions in the property market is far greater compared to what was going on three years ago.” Réczicza confirms that the state has been economically active in certain industries, but he believes it shouldn’t necessarily be perceived negatively. On the contrary, in many cases government intervention has changed things for the better. Business law is about change in some important areas, he says. The revision of the attorneys’ act and the act on civil procedures are the two developments most closely watched by practicing lawyers. The latter will be completely restructured. “Data protection will be a big issue also, but not only on a national level. The relevant legal changes will substantially affect data transfers between Europe and the United States as well, which will influence the daily business of multinational companies,” Réczicza predicts.

Your dedicated legal team for real estate matters “A reliable team with a good overview of things. The lawyers bring the legal problems in line with commercial targets.” - Chambers Europe 2016 SZÉCSÉNYI • KELLNER • VÁGVÖLGYI • MOLNÁR • TÓTH • SZABÓ Szécsényi és Társai Ügyvédi Társulás H-1024 Budapest, Buday László u. 12. Phone: + 36 1 345 45 35 Fax: + 36 1 345 45 43 Email: office@szecsenyi.com For more information on our practice and services please visit us at: www.szecsenyi.com.

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CHAMBERS EUROPE 2 016 Legal activities

LEGAL ACTIVITIES

BAND 1

BAND 2

BAND 3

Banking & Finance

Andrékó Kinstellar CMS Cameron McKenna LLP

Allen & Overy Horváth & Partners DLA Piper Lakatos, Köves and Partners Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP

Faludi Wolf Theiss Gárdos Füredi Mosonyi Tomori HP Legal | Hajdu & Partners Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

Capital markets

Allen & Overy Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP

Andrékó Kinstellar Gárdos Füredi Mosonyi Tomori Horváth & Partners DLA Piper Réczicza Dentons Europe LLP

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves & Partners

Competition/ Antitrust

Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Oppenheim

Allen & Overy Andrékó Kinstellar CMS Cameron McKenna LLP Réczicza Dentons Europe LLP Szecskay Attorneys at Law

Horváth & Partners DLA Piper Lakatos Köves & Partners Schoenherr Hetényi Attorneys at Law

Corporate/ M&A

CMS Cameron McKenna LLP Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP

Allen & Overy Andrékó Kinstellar Lakatos, Köves and Partners Szabó, Kelemen & Partners

Faludi Wolf Theiss Forgó, Damjanovic & Partners Nagy & Trócsányi Oppenheim Schoenherr Hetényi Attorneys at Law Szecskay Attorneys at Law

Dispute resolution

Nagy & Trócsányi Oppenheim Szecskay Attorneys at Law

CMS Cameron McKenna LLP Réczicza Dentons Europe LLP

Gárdos Füredi Mosonyi Tomori Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves & Partners Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Employment

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Szecskay Attorneys at Law

Horváth & Partners DLA Piper Pál és Kozma Ügyvédi Iroda Réczicza Dentons Europe LLP VJT & Partners

Forgó, Damjanovic & Partners Oppenheim Szabó, Kelemen & Partners

Intellectual property

Danubia Patent and Law Office in cooperation with Sár & Partners SBGK Attorneys at Law Szecskay Attorneys at Law

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Sár & Partners Attorneys at Law

Bird & Bird Horváth & Partners DLA Piper Lakatos Köves & Partners Oppenheim

Life sciences

Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Réczicza Dentons Europe LLP Szecskay Attorneys at Law

Andrékó Kinstellar CMS Cameron McKenna LLP KNP LAW Nagy Koppány Varga and Partners

Private equity

Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP

CMS Cameron McKenna LLP Horváth & Partners DLA Piper

Projects and energy

Andrékó Kinstellar CMS Cameron McKenna LLP Faludi Wolf Theiss Oppenheim

Budapest Law Firm No. 5000 Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves & Partners Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP

Real estate

CMS Cameron McKenna LLP Lakatos Köves & Partners Réczicza Dentons Europe LLP

Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

CHSH Dezső & Partners Horváth & Partners DLA Piper Nagy & Trócsányi Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Restructuring/Insolvency

CMS Cameron McKenna LLP Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP

Andrékó Kinstellar Horváth & Partners DLA Piper Lakatos, Köves and Partners Réczicza Dentons Europe LLP

Faludi Wolf Theiss Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

Tax

CMS Cameron McKenna LLP Horváth & Partners DLA Piper Jalsovszky Law Firm

Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

Andrékó Kinstellar Faludi Wolf Theiss Nagy & Trócsányi

Technology, Media, Telecommunications

CMS Cameron McKenna LLP Réczicza Dentons Europe LLP

Allen & Overy Lakatos, Köves and Partners Siegler Ügyvédi Iroda / Weil, Gotshal & Manges LLP VJT & Partners

Bán, S. Szabó & Partners Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

Andrékó Kinstellar Lakatos Köves & Partners VJT & Partners

IFLR 10 0 0 2 016 TIER 1

TIER 2

TIER 3

Banking

Allen & Overy Andrékó Kinstellar CMS Cameron McKenna LLP Réczicza Dentons Europe LLP

Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves and Partners Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Burai-Kovács & Partners Faludi Wolf Theiss Gárdos Füredi Mosonyi Tomori HP Legal | Hajdu & Partners Nagy & Trócsányi Oppenheim Partos & Noblet / Hogan Lovells Szecskay Attorneys at Law

M&A

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Allen & Overy Andrékó Kinstellar Faludi Wolf Theiss Horváth & Partners DLA Piper Lakatos Köves and Partners Szecskay Attorneys at Law

Burai-Kovács & Partners Erős Ügyvédi Iroda / Squire Patton Boggs Jeantet Nagy & Trócsányi Oppenheim

Project finance

Andrékó Kinstellar CMS Cameron McKenna LLP Réczicza Dentons Europe LLP

Allen & Overy Faludi Wolf Theiss Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves and Partners Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Burai-Kovács & Partners Oppenheim Szecskay Attorneys at Law

Energy and Infrastructure

Andrékó Kinstellar CMS Cameron McKenna LLP Faludi Wolf Theiss Réczicza Dentons Europe LLP

Budapest Law Firm No. 5000 Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos Köves and Partners Oppenheim Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

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EXPERT OPINION

Local branch of CMS grows through diversity CMS established its first CEE office in Budapest in 1989 putting the firm on the front lines of the dramatic changes in the region. By diversifying their practice, they were able to weather many storms and grow as a result, according to Managing Partner Gabriella Ormai, CEE Managing Director Dóra Petrányi and Partner Gábor Czike.

How has your Budapest practice evolved since then? Gabriella Ormai: From the early days we worked mostly on the investment side and built up a full-service practice from there. We deal with all kinds of business law from banking to commercial, Gabriella Ormai, Managing Partner, Dóra Petrányi, CEE Managing Director, Gábor Czike, Partner, Head of Real Estate. corporate, real estate, competition and labor law, and litigation. Being one of GC: The expectations are still more As the newly elected CEE Managing Europe Awards for Excellence. Why do the largest law firms in Hungary, we have positive and the potential always exists. If Director what are your priorities for you think you received this award? deep experience in various fields and can you look at the economic circumstances CMS? What sort of developments do DP: We are the longest established international firm in the region with full provide experts to handle just about any and the possibilities for development – you anticipate? situation. The office currently houses 70 infrastructure, retail, real estate, industry DP: The investment landscape remains service capability in all jurisdictions. We – there is still great potential for further dynamic with regards to M&A activity, have a very strong track record across the lawyers and about 50 support staff. growth, while this is less so in mature real estate, energy infrastructure and full range of transactional, contentious, greenfield investments, these will remain regulatory and commercial work, and we Are you seeing any trends in particular markets. our priorities. act on high profile mandates for notable in the region since establishing your What are some of the biggest Also anti-bribery and corruption (ABC) international and domestic banks and office here? activities gain more emphasis in certain corporates. This award confirms the Gábor Czike: There was definitely a challenges in running a practice here? shift after 2008-2009 when traditional, GO: The legal profession as such is a jurisdictions and considering our strong strength of our brand, legal expertise, transaction oriented law firms had to competitive one, no doubt. We need regulatory expertise this will be one of our business acumen and client service in the region. reinvent themselves in order to survive. to make sure we are on top of these new priorities. Since we’ve always put a strong challenges and keep the ability to adapt Furthermore, we will focus on outsourcing emphasis on commercial legal support to the ever changing market and constant and offshoring that continues to be a How has winning this award affected your practice? we’ve had an easier time making that developments. We strive to strengthen driving force in the technology sector. GO: It is another welcome recognition transition. We now see a certain uptake those areas where CMS can prosper and in the market, which means we are well truly add value to clients e.g. compliance Can you speak a bit about the for our practice and rewarding for our positioned with our clients as we have or procurement. Furthermore, recruiting developments in the property market lawyers whose continuous hard work and dedication helped us get this award, but we seen them through their difficult years, and keeping talent is key to success. from a legal perspective? supported their strategic decisions and The right people who can do high quality GC: We see investor appetite growing, also have to live up to these expectations. work, maintain and acquire clients are although we are not expecting to reach As markets move on our focus remains their survival as well. 2007 levels. Investors first appeared on on future opportunities; we need to invaluable. the market looking for higher yields and concentrate on what we do best, and that Why is your presence in CEE so strong? DP: The CEE region is still very DP: From another perspective, I believe were willing to take risks. Now we are is client support and client services. strategically important for investors. What in CEE, we’re trained to be on high seeing more conservative investors. The they can find in CEE is reliable economies, alert. Taking into consideration the third phase is still to come during which a European operation and at the same geopolitical situations in our region – the the very conservative German funds are time growth rates similar to those found Ukraine conflict, the political situations likely to come to Budapest. More and in emerging markets. This is still a very in Hungary, Poland or Turkey – each more deals are taking place in the form dynamic environment for M&A activity, and every jurisdiction is undergoing of asset deals rather than corporate real estate, energy and infrastructure. If something extraordinary. If you are able transactions since the change in tax rules. you look at the expected GDP growth to assist your clients and react in these rates in the CEE, they often outgrow circumstances in a supportive way, that CMS recently won the ‘CEE Law Firm of the Year 2016’ award at Chambers gives you a competitive advantage. those in mature economies. cms.law

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NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

How long has CMS been in Hungary? Dóra Petrányi: It’s been over 27 years now. We were one of the first international law firms to establish an office in Hungary after the changes in the political system. Our managing partner Gabriella Ormai established the law firm’s Budapest office in 1989. Since this is the first place where CMS opened an office outside of London, this was the starting point for the region.

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LEGAL 5 0 0 2 016

LEGAL ACTIVITIES

TIER 1

TIER 2

TIER 3

Banking & Finance

Andrékó Kinstellar CMS Cameron McKenna LLP Horváth & Partners DLA Piper Lakatos, Köves and Partners Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Allen & Overy Faludi Wolf Theiss Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Oppenheim Szabó, Kelemen & Partners Szecskay Attorneys at Law

CHSH Dezső & Partners Deloitte Legal Szarvas, Erdös and Partners Law Firm Erős Ügyvédi Iroda/Squire Patton Boggs Forgó, Damjanovic & Partners Nagy & Trócsányi Partos & Noblet/Hogan Lovells Schoenherr Hetényi Attorneys at Law

Capital markets

Allen & Overy Andrékó Kinstellar Horváth & Partners DLA Piper

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Kapolyi Law Office Lakatos, Köves and Partners Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Forgó, Damjanovic & Partners Gárdos Füredi Mosonyi Tomori Partos & Noblet/Hogan Lovells Schoenherr Hetényi Attorneys at Law Szecskay Attorneys at Law

Competition

Allen & Overy Andrékó Kinstellar CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Oppenheim

Faludi Wolf Theiss Partos & Noblet/Hogan Lovells Réczicza Dentons Europe LLP Schoenherr Hetényi Attorneys at Law Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP Szecskay Attorneys at Law

bpv Jádi Németh Attorneys at Law CHSH Dezsö & Partners Erős Ügyvédi Iroda/Squire Patton Boggs Forgó, Damjanovic & Partners Horváth & Partners DLA Piper Jalsovszky Law Firm Lakatos, Köves and Partners Szabó, Kelemen & Partners

Commercial, Corporate & M&A

CMS Cameron McKenna LLP Erős Ügyvédi Iroda/Squire Patton Boggs Forgó, Damjanovic & Partners Horváth & Partners DLA Piper Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos, Köves and Partners Oppenheim Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Allen & Overy Andrékó Kinstellar bpv Jádi Németh Attorneys at Law Deloitte Legal Szarvas, Erdős and Partners Law Firm Faludi Wolf Theiss Sándor Szegedi Szent-Ivány Komáromi Eversheds Szecskay Attorneys at Law VJT & Partners

CHSH Dezsö & Partners CLV Partners - Csabai & Partners Law Firm Conybeare Solicitors Jalsovszky Law Firm Kapolyi Law Office Nagy & Trócsányi Noerr Partos & Noblet/Hogan Lovells Schoenherr Hetényi Attorneys at Law Szabó, Kelemen & Partners

Dispute resolution

CMS Cameron McKenna LLP Lakatos, Köves and Partners Nagy & Trócsányi Oppenheim Réczicza Dentons Europe LLP Szecskay Attorneys at Law

Faludi Wolf Theiss Forgó, Damjanovic & Partners Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP VJT & Partners

Allen & Overy Andrékó Kinstellar CHSH Dezsö & Partners Erős Ügyvédi Iroda/Squire Patton Boggs Horváth & Partners DLA Piper Lohn Law Firm Partos & Noblet/Hogan Lovells Sándor Szegedi Szent-Ivány Komáromi Eversheds Szabó, Kelemen & Partners

Employment

Andrékó Kinstellar CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie VJT & Partners

CLV Partners - Csabai & Partners Law Firm Forgó, Damjanovic & Partners Horváth & Partners DLA Piper KCG Partners Réczicza Dentons Europe LLP Szecskay Attorneys at Law

Bánki and Partners TaylorWessing e|n|w|c bpv Jádi Németh Attorneys at Law Erős Ügyvédi Iroda/Squire Patton Boggs Faludi Wolf Theiss Knight Bird & Bird Noerr Oppenheim Sándor Szegedi Szent-Ivány Komáromi Eversheds Schoenherr Hetényi Attorneys at Law Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP Szabó, Kelemen & Partners

Intellectual property

Danubia Patent and Law Office LLC in cooperation with Sár & Partners Oppenheim SBGK Attorneys at Law Szecskay Attorneys at Law

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Knight Bird & Bird Lakatos, Köves and Partners

Forgó, Damjanovic & Partners Horváth & Partners DLA Piper Réczicza Dentons Europe LLP

Projects & Energy

Andrékó Kinstellar CMS Cameron McKenna LLP Faludi Wolf Theiss Horváth & Partners DLA Piper Lakatos, Köves and Partners Oppenheim Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

Allen & Overy CHSH Dezsö & Partners Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie

bpv Jádi Németh Attorneys at Law Forgó, Damjanovic & Partners KCG Partners Szecskay Attorneys at Law

CMS Cameron McKenna LLP Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Lakatos, Köves and Partners Réczicza Dentons Europe LLP

Horváth & Partners DLA Piper Oppenheim Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP

CHSH Dezsö & Partners Erős Ügyvédi Iroda/Squire Patton Boggs Nagy & Trócsányi Noerr Partos & Noblet/Hogan Lovells Schoenherr Hetényi Attorneys at Law Szabó, Kelemen & Partners Szecskay Attorneys at Law

Technology, Media, Telecommunications

CMS Cameron McKenna LLP Horváth & Partners DLA Piper

Allen & Overy Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Knight Bird & Bird Lakatos, Köves and Partners Réczicza Dentons Europe LLP Siegler Ügyvédi Iroda / Weil Gotshal & Manges LLP VJT & Partners

Andrékó Kinstellar bpv Jádi Németh Attorneys at Law Faludi Wolf Theiss Forgó, Damjanovic & Partners Partos & Noblet/Hogan Lovells Sándor Szegedi Szent-Ivány Komáromi Eversheds Szecskay Attorneys at Law

Tax

CMS Cameron McKenna LLP Horváth & Partners DLA Piper Jalsovszky Law Firm Kajtár Takács Hegymegi-Barakonyi Baker & McKenzie Nagy & Trócsányi

Allen & Overy bpv Jádi Németh Attorneys at Law Faludi Wolf Theiss KCG Partners Lakatos, Köves and Partners Szecskay Attorneys at Law

Real estate & Construction

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25 years of excellence We were founded in 1991 by Péter Nagy and László Trócsányi, name partners of the firm. With the foundation the aim was to offer sophisticated legal services. This was 25 years ago and we still continue to seek excellence in a comprehensive, modern practice that spans international commercial and business law. In 2014 we were the 4th largest law firm in Budapest based on net turnover figures. Today we have 28 lawyers and 20 supporting employees. Our lawyers provide clients with advice and representation in an active, thoughtful and ethical manner. Commercial and business law We advise a broad range of clients, including numerous multinational corporations in all areas of commercial and business law. International service Since 2002 we are 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. This gives us a deep understanding of Hungarian and international business and legal issues.

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EXPERT OPINION

STATE AID FOR RELOCATING PRODUCTION: THE LEGAL QUESTIONS Ádám Bodor Attorney (H), State Aid Specialist

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

Noerr & Partners Law Office

difficulties for EU Member States, including the interpretation of “closing down the same or a similar activity”, hence the GBER does not include any definition of “closing down”. The generally accepted interpretation at that time was that under “closing down” the total closing down of an establishment with its all capacities is meant.

Taking into account the uncertainty related to the application of this In the past few years, more and more provision, the Commission issued an investors are considering implementing interpretation in July 2015, stating their investment projects in Central- that “closing down” includes not only Eastern Europe (CEE). Behind this fact, total closures, but partial closures as several advantages are playing a key well. In the case of partial closures, the role, including e.g. low wages, a highly provision applies if the partial closure developed infrastructure and a well- results in “substantial job losses”. The educated workforce. Commission adds that for the purpose of the relocation provision “substantial Investors may also be interested in job losses” are to be defined as state subsidies, since in this region losses of at least 100 jobs or as a there are still many kinds of incentives job reduction of at least 50% of the available. Since state aid has to workforce, compared to the average comply with EU law, when planning employment in the given establishment a project and the accessible aid in any of the 2 years preceding the sources, investors have to take care date of application. of the state aid legal framework of the EU, and particularly of the General Although the above interpretation Block Exemption Regulation 651/2014/ has been issued as part of the EU (GBER)) on regional investment Commission’s legally non-binding subsidies. guide to the GBER (which is a legally

binding act of the Commission), the In several cases, based on the interpretation effectively amends beneficial factors mentioned above, the content of the GBER’s provision. the investor decides to relocate its Considering this, the Commission is production capacities from a location planning currently to officially amend in western-Europe to the CEE region, the GBER with the definition of or, in parallel to the setting-up of a “closure of the same or similar activity”, new production site in a CEE country, in line with its interpretation referred to simply cut back its capacities in the to above. According to the plans of western part of the EU. the Commission, this amendment will be placed in the review of the GBER However, the currently applicable related to the extension of the GBER’s GBER introduced in 2014 a new application to the funding of ports and provision regarding relocation of airports (the draft document was under capacities (Article 13d), saying that public consultation until 30 May 2016, in case of closing down the same the final draft may be accessible soon). or a similar activity in the European Economic Area at group level, either in Since the relocation of production (as the 2 years preceding the application interpreted by the Commission) may be for regional state subsidy or within relevant to many investment projects a period of up to 2 years after the of multinational groups, the provision completion of the project to be referred to above may have significant subsidized (in this latter case it has to effects on investors’ applications be investigated whether the investor for state subsidies. Therefore, it is had concretely planned the closure at really advisable to involve state aid the time of the application for subsidy), specialized legal support already in the regional investment subsidy related the planning phase of such investment to the investment project falls outside projects, in order to avoid negative of the scope of GBER. In that case, effects of a possible misinterpretation, a more restrictive legal scheme, the including even risking the subsidy itself. Commission’s Guidelines on Regional State Aid for 2014-2020, applies, and the prior consent of the European Commission is needed for granting a subsidy (notification procedure). Since 2014, the interpretation of the above provision has caused several

BBJ_2411_spec_report.indd 24

Lawyers help clients b

www.noerr.com

Cross-border mergers are one solution to being able to repatriate investments.

Asset protection is essential for reducing a firm’s tax burden, but these days it is also considered vital protection against government involvement in the market. LEVENTE HÖRÖMPÖLI-TÓTH

DLA Piper says there are various reasons behind this but clearly one of these is tax optimization. “Now that there is a stronger market, profits are up in many areas. More investors get into a position where it is worth considering making their profit distribution more tax efficient, especially when they suffered interim losses on their investments. Many do so and are willing to go the extra mile,” Posztl says. Such mobility has been made easier since 2005 when a relevant EU directive was adopted. Dr. Csilla Andrékó, managing partner at Kinstellar, believes the matter is mostly about structuring. “Client needs may differ, but the key ultimately is where the liabilities end up. Our task is to find the proper structure that allows you to separate assets and move them under a jurisdiction that offers more favorable conditions.” At Kinstellar, therefore, tax advisors are charged with drawing up the pros and cons of moving assets around in a company with cross-border operations, but before anything gets decided, due diligence must be performed to assess the situation.

Any company involved in foreign direct investment (FDI) activity would also like the ability to directly pull its investment out of the host country if needed. Of course, repatriating profits can be complicated: Countries arrange tax and ownership laws in ways that make it harder to take earnings and equity across borders. Ensuring the ability to recoup investments has always been important here in Hungary, an economy heavily A matter of life and death dependent on FDI. These days, as the government more actively engages in If tax optimization is the only thing you efforts to shape markets, sometimes need to worry about, the above provides making it harder for foreign firms to stay an excellent solution. However, if you here, investors want stronger guarantees are in a fight for your life and your main of the ability to bring money out of the goal is to minimize losses, this is far country. Local legal experts say the from enough. business of asset protection is more According to a leading attorney at a popular, and has grown more complex, top international law firm in Budapest requiring protections that transcend who wished to remain anonymous, many the classic solution of the cross-border players are considering leaving Hungarian jurisdiction as the government has created merger (CBM). CBM has long been part of the toolkit of intolerable market conditions in certain law firms serving multinational clientele. industries. “Apart from cross-border Now it seems that demand for such legal mergers, placing the entire operation of services is up in Hungary. As Dr. András companies abroad is a solution that is Posztl, country managing partner at often used,” our source says.

2016. 06. 01. 21:17

www.bbj.hu

s bring money home

Budapest Business Journal | June 3 – June 16, 2016

EXPERT OPINION

DEALING WITH BANK DEBT IN M&A TRANSACTIONS

the outset and during the transaction will often satisfy their desire to be kept informed without driving the process. It is important that the seller in particular understands any concerns which the lender has so as to allow it to address them in a timely and effective manner.

Partner

Steven Conybeare International counsel, English solicitor HP LEGAL

As practice shows, in many cases, the government has openly sought to make “Investors get into a position unwanted players give up and leave the market. Different methods have been where it is worth considering applied to force competitors by decree making their profit distribution to exit or quit. In the energy and retail sectors heavy administrative burdens did more tax efficient, especially the trick; on the casino market existing licenses were withdrawn; and in the when they suffered interim schoolbook market, a monopoly was losses on their investments.” introduced overnight by legislation. Therefore, investors worried about their assets are used to thinking about scenario, the parent company or an entity preventive measures early on that provide of substance holding the local assets must sufficient protection. be relocated to a country that does have The fact is that Parliament can enact such an agreement. laws that have a negative impact on “And this is when legal competence certain economic players. Furthermore, kicks in. For instance, you need to know the national courts may be of little help which treaties provide you the most for a business seeking compensation comprehensive protection and choose the for damages caused by legislation. The place of relocation accordingly. Forward Constitutional Court is not an effective thinking is badly needed here, though, as remedy, either, since it is not empowered relocation must happen before legislation to award compensation. Sources note causing damage could enter into force,” it is also full of government-friendly Peremiczki says. He believes this is the judges who very rarely rule against the best way to protect investor assets, as this government in important economic cases. is the only forum where you can sue for damages with a fair chance of success and be awarded real compensation. Forward thinking badly needed “Yes, you can file a claim with the Dr. Péter Peremiczki, lead M&A lawyer at European Court for Human Rights MOL Group argues that the only forum (ECHR) in Strasbourg too, but it is where an investor may seek effective simply not prepared to form an opinion remedy for the losses it suffers as a result in sophisticated investment protection of state intervention is the International matters. The ECHR was just not made for Center for Settlement of Investment this purpose, though, it is doing its best Disputes (ICSID), a permanent arbitration in recent years to catch up in property forum attached to the Word Bank. Under protection cases as well.” a framework treaty the signatory states Since the Hungarian state has altered may conclude bilateral agreements with the legal environment for various markets one another where the nature and scope by distorting competition in the past few of investment protection are detailed. years, investors are taking this threat into Key is that the country of establishment consideration more often. “When selecting of the parent company must have a treaty a lawyer, clients do value the expertise with the state where the damage was that provides them with structures suffered. If this is not the case, and you that offer the best possible investment want to prepare for a potential ICSID protection for them,” Peremiczki says.

BBJ_2411_spec_report.indd 25

When working on a M&A transaction, the commercial intent of the parties needs to be accurately understood so that it can be properly documented in a sale and purchase contract. Even if the target is a Hungarian company, an international owner or buyer add flavour to the transaction with potentially different experiences and practices in terms of overcoming challenges as and when they arise. If a Hungarian target company has bank debt, secured against its assets or its membership interest, the debt will be repaid or refinanced as part of the sale unless the buyer seeks to take it over. The loan documentation will inevitably include restrictions on what the target and/or the seller is permitted to do without consent, including a change of control clause, and a lending bank will invariably become involved in the transaction. However, its interests are not necessarily aligned with the seller, or indeed with the buyer. It will want to ensure that its security is not at risk pending repayment or that the buyer is able to service the debt going forward. Where the debt may be several years old and/or if the buyer is a better credit risk, the buyer will customarily seek to improve the debt terms. Whilst it is necessary to take the bank’s requirements into account, at the same time it is critical to ensure its position does not derail the principal transaction. Whilst every transaction is different and the circumstances in which the sale is taking place are never exactly the same, the general approach should be to ensure that the target and the sellers start liaising with the lender at an early stage, but not prematurely. If the debt is distressed then a lender may itself be requiring the sale, and as such would be keen to be involved without actually stepping into the target’s shoes by way of enforcement of its security. However, such a step remains a possibility, and one which both the buyer and seller need to keep in mind. In our experience, liaising with the lender from

If the buyer is to take over the debt, then it will want to start liaising with the bank to negotiate its preferred terms. As to when would be appropriate will depend on the progress of the contractual negotiations. A buyer may have a new lender in mind as an alternative in order to refinance the existing debt, but where the take-over of existing debt is the preferred or only option, then the buyer will first want to know that there is a deal to be done, either on the same or better terms. Banks will perform their own due diligence on the buyer and this usually takes longer than anticipated, particularly where the buyer is an international one located outside of EU. Usually a signed sale and purchase contract will be required with one of the condition precedents (CP) to closing being satisfactory terms agreed with the bank. However, this itself may be a cause for protracted negotiations, as a seller may be reluctant to allow the buyer to speak to the bank and further it should be concerned that closing is subject to a CP that is outside of its control, whereas a buyer will want to know that it has a binding deal in place with the seller so long as it can get the required terms from the bank. Closing under the contract where a bank is involved will inevitably mean that the bank and its lawyers are involved in the closing process, along with a public notary to deal with the bank security which will need to be in place. So book a large meeting room, prepare in advance to ensure the logistical challenges can be met, and start early to have sufficient time to deal with the extensive paperwork involved. Using an experienced team of commercial lawyers, who properly understand the commercial intention of the parties, particularly where there is an international element, is a pre-requisite. But having a team who can deal with both the M&A transaction and the finance aspects will ensure that the transaction is executed expediently, efficiently and ultimately costeffectively for the benefit of all concerned.

www.hplegal.eu

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Laszlo Hajdu

2016. 06. 01. 21:17

26 3

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

EXPERT OPINION

EXCHANGE OF INFORMATION – RISK MANAGEMENT IN M&A DEALS

merged companies or the relinquishing of joint control, yet other obligations to restore effective competition as well as the imposition of fines are possible.

François d’Ornano Managing Partner

Ioana Knoll-Tudor Local Partner

JEANTET – D’ORNANO IRODA Recent “gun jumping” rulings across Europe have included fines on investors and serve as reminders that exchange of information between two competitors during an M&A negotiation has to be treated with caution.

NOTE: ALL ARTICLES MARKED EXPERT OPINIONS ARE PAID PROMOTIONAL CONTENT FOR WHICH THE BUDAPEST BUSINESS JOURNAL DOES NOT TAKE RESPONSIBILITY

In fact, if the focus in an M&A deal is usually on merger control clearances, the path towards the completion of the operation has also to be monitored very closely, in the sense that the companies involved should remain independent competitors until the deal is effectively closed.

APPRECIATION AND IDENTIFICATION OF COMMERCIALLY SENSITIVE INFORMATION The main challenge remains the ability of companies to measure the level of sensibility of their commercial information in an M&A process depending on the context, the characteristics of the market, the parties’ position, and the public or private or strategic nature of the information. It is incumbent upon the seller to ensure the efficiency of the due diligence process and to ensure that such information is released progressively. A pragmatic approach is to be preferred and attention needs to be paid to adapt the right pace in progressing with the deal, before the interest of the operation dims, while performing proportionate due diligence to master the risk of sharing commercially sensitive information that may affect the market.

DO’S AND DON’TS OF THE EXCHANGE OF INFORMATION In view of the risk of disclosing sensitive INCREASING CONCERN OVER information to competitors, companies INFORMATION EXCHANGE IN M&A should opt for a step-by-step approach. DEALS Thus, the announcement of an imminent During an M&A deal, each exchange of merger is possible, but not the transfer information shall be viewed as a critical of the assets of the team. Likewise, the time for avoiding prohibited and anti- acquirer should keep a distance from the competitive information exchanges. This target’s strategic decisions rather than pressure intensifies with the different steps adopting a shared commercial strategy at of a deal: the information memorandum, the an early stage. due diligence stage, the negotiation stage and the period following the signing of the The best practices consist of organizing transaction documents. double data rooms sorted in order of sensitivity – with a black box containing A particular risk is known as “gun jumping”, the most sensitive ones – or even a firewall. which refers to the unlawful coordination Furthermore, implementing a clean team, between the parties prior to the merger i.e., an independent due diligence team, clearance – figuratively, a false start, a is a safe way to prevent anti-competitive premature integration of the target without exchange of information. waiting for the green light of the authorities. There can be procedural or substantive Finally, it should be noted that, in Hungary, a gun jumping. In the case of procedural gun preliminary authorization for exercising the jumping, the involved parties fail to apply for purchaser’s controlling rights over the target merger clearance, or breach the standstill company prior to the merger clearance obligation under applicable merger control decision is possible. Such authorization can law. Substantive gun jumping is committed only be applied for together with the merger when the parties exchange commercially clearance application, and the purchaser sensitive information or coordinate their must present its specific legitimate reasons competitive conduct prior to merger supporting the necessity of the specific clearance. controlling rights it wishes to enforce based on the transaction agreement (e.g., The current trend shows that, following information rights, decision making, etc.). the European Commission and some The GVH, considering the potential harms competition authorities in the European to competition, allows the exercise of such Union, the Hungarian Competition Authority rights if it is necessary for the protection of (GVH) started to take action against the value of the purchaser’s investment. anticompetitive M&A processes. The GVH imposed a fine for the first time on 31 March Jeantet, the leading French business law firm, 2016, in a merger clearance decision, and has opened three new offices in Budapest, confirmed this dynamic in a second case Kiev and Moscow under the leadership of dated 2 May 2016. In this case, the acquirer partners François d’Ornano and Karl Hepp registered itself as the shareholder of the de Sevelinges. With this move, Jeantet is target company and exercised its voting strengthening its international presence and rights prior to the merger clearance, i.e., it is now the most dynamic French law firm in committed a procedural gun-jumping. As Central Eastern Europe. a consequence, even if the GVH imposed a symbolic fine (a few million Forints compared to the general rules consisting of up to 10% of the previous year’s net turnover of the undertaking) it gave a first warning and a clear vision of its ambition. The GVH may launch a proceeding ex www.jeantet.fr officio and order the separation of the

BBJ_2411_spec_report.indd 26

Experts: New Civil Code m When the government rewrote the Civil Code in 2014, banks balked, saying it ignored the way they normally do business. The rollbacks and revisions expected to pass in Parliament in mid-June are said to be helpful for the sector.

Gergely Szalóki, head of banking and finance at Schoenherr Hetényi.

adopt legislation that may have worked in leaner times, but no longer suits the When the government changed the current economic environment. Hungarian Civil Code in 2014, it caused “It became necessary to refine, and to headaches for banks and their lawyers. amend the relevant parts of the Civil More changes to the code are due to be Code, and we conducted an extensive passed by Parliament on June 13, but this coordination on the matter,” the deputy time, experts say, the proposed changes state secretary says. “The Ministry of Justice, in close cooperation with the are improvements. Lawyers will be forced to relearn National Bank of Hungary, and the the Civil Code, but attorneys who are Ministry of National Economy, elaborated studying the proposed amendments say the legal text, which was also coordinated that the changes are not as drastic as with professional interest groups (such they were in 2014, and that most of the as the Hungarian Banking Association, changes actually help facilitate banking Hungarian Leasing Association, and activity and reintroduce systems that Hungarian Factoring Association).” worked well before the Civil Code was Bodzási adds that consulting with such amended in 2014. professional groups is required under The banking sector was taken aback Hungarian law. by the 2014 Civil Code revisions, which introduced the new code that put a wrench Transfer of contract in the way they had been handling their business. One of the new amendments proposed “New concepts were introduced while would tweak the rules for “transfer of the usual concepts were abolished,” says contract”, a change that was made in 2014 Gergely Szalóki, head of banking and to help with “cleansing bank portfolios”, finance at Schoenherr Hetényi Attorneys according to Bodzási. at Law. “Now the new amendment aims “The transfer of contract is a new tool to settle this turmoil because the banking in Hungary,” says Szalóki. In the old sector, frankly speaking, freaked out.” system, pre-2014, you could either assign After extensive feedback from the a claim or assume a debt but a bank could sector, experts say, the government not transfer its contractual position, he decided to revise rules regulating bank says. “The new Civil Code introduced the activities such as clearing bad debts, transfer of an entire contract and this was selling mortgages and relying on a very good. The market really needed it, fiduciary security interest regime. The but this transfer of contract rendered all amendments also reduce the potential securities interests terminated.” liability of executive officers, so that The new amendment will ensure that companies are liable for their mistakes. the security rights will not automatically According to Balázs Bodzási, deputy cease to exist with the transfer of the state secretary for business law and civil contract. The change makes it easier for law, the latest changes are motivated by banks to get rid of bad debt, according economic and political considerations. to Szalóki. “Cleaning the loan portfolios He says the government’s goal is to would be in the interests of the entire ease lending in Hungary, simplify and economy, not just the banking sector,” harmonize the system with sectoral laws, he says. and reduce any ambiguities that exist in the current Civil Code. Restoration of independent mortgages Szalóki of Schoenherr Hetényi agrees. In his assessment, the latest legislative According to Szalóki, a major criticism corrections and rollback of the previous of the Civil Code amendments of 2014 changes are positive, and were essentially was that many of the rules did not work made to improve conditions for market technically, and in many cases they were not even adopted. This is what happened participants. One encouraging sign about the latest with the independent security interest, amendments is that they have heavily which allowed banks to sell mortgages without the relevant obligations, Szalóki involved industry consultations. Critics have blamed the government’s says. Before 2014, “banks sold mortgages insular approach for making changes to specialized credit institutions that to the Civil Code that hurt businesses securitized these and sold asset-backed in 2014. Bodzási counters that the bonds on the market. That’s how banks financial crisis forced lawmakers to refinanced themselves.” But the practice ANIKO FENYVESI

2016. 06. 01. 21:17

www.bbj.hu

EXPERT OPINION

QUESTIONS REMAIN CONCERNING NEW REGULATION FOR SUPPORTING RENEWABLE ENERGY László Kenyeres Attorney–at–law, Partner FALUDI WOLF THEISS

Balázs Bodzási, deputy state secretary for business law and civil law.

“Now the new amendment aims to settle this turmoil because the banking sector, frankly speaking, freaked out.”

banning fiduciary securities impedes banks and the commercial sector from certain transactions. Under the proposed amendment, the entire fiduciary security interest regime will revert back to what it was prior to 2014, but such transactions will only be allowed for the corporate sector.

was prevented by the 2014 amendment. Liability of executive officers Now that problem will be fixed. Rules pertaining to securities will The Civil Code introduced in 2014 also also be amended, but constitute lesser made it easier to hold a CEO legally changes, says Bodzási. “The main goal responsible for damages caused by his is to simplify the regulations and create company. harmony with the capital market act,” he “The liability of managing directors explains. was a very hot topic when the Civil Code was changed in 2014 because at the time a much stricter liability was introduced Fiduciary security interests for them in the case of damage to a Another element addressed in the third party outside of a contractual amendments to the Civil Code is the relationship,” says Kinga Hetényi, so-called fiduciary security interests. Managing Partner at Schoenherr “These are not mortgages or pledges Hetényi Attorneys at Law. but are based on transfer of title, such The new amendment will, for the as options or assignments, which are most part, revert the Civil Code back to based on general Civil Law principles its earlier status. The current wording that were used for security purposes,” stipulates that a company’s managing says Szalóki. “For example, if I loan director is liable for the damage that you money and in turn you sell me your he or she caused to a third party house and then you pay back the loan, I in connection with his or her legal relationship with the company, Hetényi will retransfer the title to you.” Use of these instruments was common explains. practice in the corporate sector and “The new, proposed wording clears any worked well in many cases, but these ambiguity and states that the company securities were abolished in 2014. will be liable for anything in the course “This was another cause of turmoil of the managing director’s activity that in the market, in particular among causes damage to a third party, and only banks, which found fiduciary security if that damage is caused intentionally interests easier to enforce,” adds Szalóki. will he or she be liable, together with the Eventually, legislators agreed that company,” she says.

BBJ_2411_spec_report.indd 27

not yet answered. As László Kenyeres, attorney-at-law, partner of Faludi Wolf Theiss says, if we scan through carefully the detailed rules of the draft legislative package, it is manifest that the technology-related preferences and the share between them remained undecided.

The new proposal provides in connection with the tender obligation (i.e. for new facilities above 1 MW) The Government has published a that the competent minister shall draft legislative package aimed at determine, in a 5-year breakdown, transforming the present support the maximum amount and the annual scheme for electricity generation from payment of the green premium subsidy renewable sources. Pursuant to the to be distributed amongst all green published proposal, the mandatory off- energy producers or optionally the take system in its current form will only maximum annual payments of the be available for generation facilities green premium per renewable source with a capacity of less than 0.5 MW and or technology. This means that it is still for demonstration (i.e. experimental) unclear whether different renewable projects. Generation facilities with a sources and technologies should capacity higher than 0.5 MW using compete against each other in lack of renewable energy sources will be technology-related subsidy caps or the obliged to sell the electricity generated real competition will be reduced to the individually, on a free-market basis. separate renewable source types by The “expected” sales prices will be the introduction of such caps. determined by the TSO MAVIR as a so called “reference market price” based According to Mr Kenyeres, there are on the prices of the Hungarian Power also other unclear points in the new Exchange (HUPX). proposal. So-called demonstration Parallel to this, the Hungarian Energy and Public Utility Regulatory Authority (HEA) will set the “support prices” for “green electricity” by taking into consideration the production costs and the concept of the fair return of the project. The margin between the support price and reference market price will be the “green premium”, which will be paid to the generators by MAVIR. This will secure the profitability of electricity generation from renewable sources and at the same time it will decrease the distance between market prices and the present mechanisms which disregard the economic cycles of the green energy support scheme. What is more, generation facilities with an output of more than 1 MW will only be eligible to participate in the new financial support scheme if they are selected through proper tender proceedings aiming at the selection of the most competitive projects. In the case of generation facilities with a capacity of less than 1 MW, the HEA will decide on the amount of the supported electricity as well as the term of support upon individual request and through administrative procedures. Although the above concept is quite clear, there are still some questions

projects will be eligible for mandatory off-take and fixed subsidy prices, i.e. able to avoid competition, tendering and direct connection to market prices. This therefore might become a very attractive instrument of the new conception, however, no one knows what level of experimental nature will be required for classification and how the parameters will be determined.

As Mr Kenyeres warns, wind power also still remained an open question. As it is known, the Hungarian regulation of wind power had a life of vicissitudes leading to a situation where new capacities cannot be allocated in fact creating a degree of uncertainty on the market similarly to the case of cogeneration gas engines. In these areas, the market has been waiting for a long time; the adoption of the new concept of support may be an opportunity for the lawmaker to settle these specific areas, but the new draft legislative package avoided to handle.

www.wolftheiss.com

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e more bank-friendly

Budapest Business Journal | June 3 – June 16, 2016

2016. 06. 01. 21:17

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www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

Law firms with international affiliations no. of offiCes WoRldWide yeaR established hungaRian offiCe

CMS Cameron McKenna LLP (part of the CMS Network) London 1779

60 1989

gabriella ormai 1053 Budapest, Károlyi utca 12. (1) 483-4800 (1) 483-4801 budapest@cms-cmck.com

✓

–

DLA Piper UK LLP London 2006

More than 90 1988

andrás posztl 1124 Budapest, Csörsz utca 49–51. (1) 510-1100 (1) 510-1101 budapest@dlapiper.com

✓

Infrastructure & project finance, joint ventures & private equity, capital markets, financial restructuring & insolvency

Dentons Europe LLP London 2013

More than 125 2015(1)

istván Réczicza 1061 Budapest, Andrássy út 11. (1) 488-5200 (1) 488-5299 budapest@dentons.com

✓

–

Freshfields Bruckhaus Deringer LLP*, Lexwork, First Law International London* 1743 / 1973 / 2001

27 / 48 / 75 2007

ulrike Rein 1053 Budapest, Károlyi utca 12. (1) 486-2200 (1) 486-2201 office@oppenheimlegal.com

✓

Capital markets, compliance, risk and sensitive investigations, NPLs & distressed assets, restructuring and insolvency, private equity

Kinstellar – 2008

9 2000

Csilla andrékó 1054 Budapest, Széchenyi rakpart 3. (1) 428-4400 (1) 428-4444 marketing@kinstellar.com

State aid

CHSH - Cerha Hempel Spiegelfeld Hlawati - Partnerschaft von Rechtsanwälten OG Vienna 1921

9 2004

attila dezső, tamás polauf 1011 Budapest, Fő utca 14–18. (1) 457-8040 (1) 457-8041 office@chsh.hu

name of assoCiate nonhungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ established

Insurance law, compliance & investigations

otheR

top loCal exeCutive addRess phone fax email

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmC

employment

Competition

eneRgy

banking and finanCe

tax

Real estate

legal speCiality aReas

CommeRCial

Company Website

no. of attoRneys (With liCense to pRaCtiCe) no. of tRainees no. of paRtneRs of hungaRian offiCe on may 1, 2016

Rank

Ranked by no. of attorneys (with license to practice) in Hungary on May 1, 2016

Cms CameRon mCkenna llp hungaRian offiCe cms.law

50 22 10

✓

hoRváth & paRtneRs dla pipeR

www.dlapiper.com/hu-HU/hungary/ 2

42 9 7

✓

RéCziCza dentons euRope llp www.dentons.com 3

39 10 10

✓

–

✓

oppenheim Ügyvédi iRoda www.oppenheimlegal.com 4

andRékó kinstellaR Ügyvédi iRoda www.kinstellar.com

37 7 15

29 7 3

✓

–

✓

CHsH dEzső és TÁrsai Ügyvédi iRoda

www.chsh.com/en/offices/budapest.html 27 3 9

✓

–

✓

–

✓

–

As well as providing legal expertise and traditional lawyering skills, law ﬁrms need continuously to adapt and explore new ways to help their clients achieve

C H AL LE NG ING CON S ERVATIVE Oppenheim-252x80-sajto-2015.indd 1

BBJ_2411_spec_report.indd 28

their business objective and deliver results. Oppenheim is one of Central and Eastern Europe’s most experienced and innovative law ﬁrms.

Minds Open

www.oppenheimlegal.com

5/15/15 3:06 PM

2016. 06. 01. 21:17

www.bbj.hu

www.retianantallpartners.hu

27 14 8

✓

andrás szecskay 1055 Budapest, Kossuth Lajos tér 16–17. (1) 472-3000 (1) 472-3001 info@szecskay.com

Baker & McKenzie LLP Chicago 1949

77 1987

zoltán hegymegi-barakonyi 1051 Budapest, Dorottya utca 6. (1) 302-3330 (1) 302-3331 Budapestinfo@ bakermckenzie.com

–

Weil, Gotshal & Manges LLP New York 1931

20 1991

david dederick 1054 Budapest, Szabadság tér 7. (1) 301-8900 (1) 301-8901 david.dederick@weil.com

–

Corporate restructuring and insolvency, gaming and betting, IT, telecommunications and e-commerce, mediation

International Alliance of Law Firms London 1990

62 1996

tamás szabó 1132 Budapest, Váci út 20. (1) 288-8200 (1) 288-8299 tamas.szabo@sz-k-t.hu

✓

Investment protection, consumer protection

Clifford Chance London 1987

36 1991

péter lakatos 1075 Budapest, Madách Imre út 14. (1) 429-1300 (1) 429-1390 mail@lakatoskoves.hu

–

Wolf Theiss Rechtsanwälte GmbH Vienna 1957

13 2007

zoltán faludi 1085 Budapest, Kálvin tér 12–13. (1) 484-8800 (1) 484-8825 budapest@wolftheiss.com

–

Lex Mundi Houston, USA 1989

600 1991

péter berethalmi 1126 Budapest, Ugocsa utca 4/B (1) 487-8700 (1) 487-8701 budapest_office@nt.hu

✓

Business crime, trust, data protection, state aid

PricewaterhouseCoopers Legal LLP London 1999

✓

Capital markets, project finance, private client / wealth & asset management, consumer protection, advertising

EuroJuris, Legalink, Legus, TerraLex, World Service Group, Dorda Brugger JordisBest Friends. Biolegis – –

✓

Compliance, data protection, consumer protection

✓

szeCskay Ügyvédi iRoda www.szecskay.com

26 3 16

kaJtáR takáCs hegymegi-baRakonyi bakeR & mCkenzie Ügyvédi iRoda

www.bakermckenzie.com/hungary

24 15 11

✓

siegleR Ügyvédi iRoda / Weil, gotshal & manges llp www.weil.com 9

szabó, kelemen és táRsai Ügyvédi iRoda 9

www.sz-k-t.hu

23 5 2

23 5 4

✓

–

✓

name of assoCiate nonhungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ established

100 (approx.) 2000

lászló Réti 1055 Budapest, Bajcsy-Zsilinszky út 78. (1) 461-9888 (1) 461-9898 rap.central@hu.pwclegal.com

otheR

top loCal exeCutive addRess phone fax email

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmC

employment

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

legal speCiality aReas

no. of offiCes WoRldWide yeaR established hungaRian offiCe

Réti, antall és táRsai Ügyvédi iRoda pRiCeWateRhouseCoopeRs legal

no. of attoRneys (With liCense to pRaCtiCe) no. of tRainees no. of paRtneRs of hungaRian offiCe on may 1, 2016

Rank 6

Company Website

Budapest Business Journal | June 3 – June 16, 2016

1992

lakatos, köves és táRsai Ügyvédi iRoda www.lakatoskoves.hu

21 11 5

faludi Wolf theiss Ügyvédi iRoda 11

www.wolftheiss.com

nagy & tRóCsányi Ügyvédi iRoda 12

www.nt.hu

BBJ_2411_spec_report.indd 29

20 7 3

19 7 9

✓

2016. 06. 01. 21:17

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

name of assoCiate nonhungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ established

no. of offiCes WoRldWide yeaR established hungaRian offiCe

Mining law

ECOVIS International Berlin 2004

180 1991

Péter Kesseő-Balogh 1036 Budapest, Bécsi út 52. (1) 439-1166 (1) 439-1155 law@ecovis.hu

Pharmaceutical law

Conference Bleue Alliance Brussels 2006

✓

–

Allen & Overy London 1930

✓

Greenfield investments, state aid, state subsidy, compliance, health care (pharma, medical technology)

Noerr LLP Munich 1950

16 1990

zoltán nádasdy, Jörg k. menzer 1011 Budapest, Fő utca 14–18. (1) 224-0900 (1) 224-0495 recepcio@noerr.com

Immigration

Eversheds LLP London 1988

55 1987/1999

ágnes szent-ivány 1026 Budapest, Pasaréti út 59. (1) 394-3121 (1) 394-3121 office@eversheds.hu

Insurance law

ADVOC, ELA London, San Francisco 1990 / 2000

94 / 170 1992

istván gárdos 1056 Budapest, Váci utca 81. (1) 327-7560 (1) 327-7561 postmaster@gfmt.hu

–

International Lawyers Network Westwood, USA 1988

91 2005

pál Jalsovszky 1124 Budapest, Csörsz utca 41. (1) 889-2800 (1) 886-7899 office@jalsovszky.com

✓

Capital markets

Hogan Lovells International LLP London, Washington 1899/1904

51 2006

lászló partos 1051 Budapest, Vörösmarty tér 7–8. (1) 505-4480 (1) 505-4485 office@hoganlovellls.co.hu

✓

Data processing and privacy

bnt attorneys-at-law – –

10 2003

norbert varga 1143 Budapest, Stefánia út 101–103. (1) 413-3400 (1) 413-3413 info.hu@bnt.eu

otheR

top loCal exeCutive addRess phone fax email

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmC

employment

Competition

eneRgy

banking and finanCe

tax

Real estate

Company Website

legal speCiality aReas

CommeRCial

no. of attoRneys (With liCense to pRaCtiCe) no. of tRainees no. of paRtneRs of hungaRian offiCe on may 1, 2016

Rank

30 3

eCovis hungaRy legal www.ecovis.hu

17 8 7

knp laW nagy koppany vaRga and paRtneRs 14

www.knplaw.com

allen & oveRy 15

www.allenovery.com

16 6 3

15 5 2

✓

–

✓

–

✓

noerr & társai iroda www.noerr.com

15 2 4

sándoR szegedi szent-ivány komáRomi eveRsheds Ügyvédi iRoda 15

www.eversheds.hu

gáRdos fÜRedi mosonyi tomoRi Ügyvédi iRoda www.gfmt.hu

15 3 9

13 2 8

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

21 2007

kornélia nagy-koppány, istván varga 1051 Budapest, Vigadó utca 2. (1) 302-9050 (1) 302-9060 knplaw@knplaw.com

44 1993

zoltán lengyel 1075 Budapest, Madách Imre út 13–14. (1) 483-2200 (1) 268-1515 –

Jalsovszky Ügyvédi iRoda

www.jalsovszky.com 13 5 3

paRtos & noblet in Co-opeRation With hogan lovells inteRnational llp www.hoganlovells.com

13 5 3

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

bnt ügyvédi iroda www.bnt.eu 17

12 3 5

✓

–

✓

–

✓

–

✓

ECOVIS HUN GA RY ®

the lawyer • the tax adviser • the auditor • the accountant

banner_v2.indd 1

BBJ_2411_spec_report.indd 30

Ecovis Hungary Legal Balogh, B. Szabó, Jean, Zalavári és Társai Ügyvédi Iroda

2016.05.24. 9:18:20

2016. 06. 01. 21:17

www.bbj.hu

www.cathayassociates.com

Erős Ügyvédi iroda/ sQuiRe patton boggs (us) llp 17

www.squirepattonboggs.com

12 – 3

12 1 4

✓

–

✓

45 1991

Ákos Erős 1051 Budapest, Széchenyi István tér 7–8. (1) 428-7111 (1) 428-7100 budapest@squirepb.com

–

Jeantet A.A.R.P.I. Paris 1924

7 2015

françois d'ornano 1051 Budapest, Széchenyi István tér 7–8. (1) 411-7400 (1) 411-7440 contact-budapest@ jeantet.org

✓

–

AIPEX Munich 2010

katalin szamosi 1062 Budapest, Andrássy út 113. (1) 461-1000 (1) 461-1099 mailbox@sbgk.hu

–

Compliance, white collar crime, insolvency & restructuring

Schönherr Rechtsanwälte GmbH Vienna 1950

14 2008

kinga hetényi 1133 Budapest, Váci út 76. (1) 870-0700 (1) 870-0701 office.hungary@ schoenherr.eu

–

IBLC (International Business Law Consortium) Salzburg 1998

90 1997

Chrysta bán, péter s. szabó 1051 Budapest, József nádor tér 5–6. (1) 266-3522 (1) 266-3523 office@bansszabo.hu

✓

Wealth management counseling

bpv LEGAL – 2006

7 2000

andrea Jádi németh 1051 Budapest, Vörösmarty tér 4. (1) 429-4000 (1) 429-4001 budapest@bpv-jadi.com

70 2009

gábor Erdős 1068 Budapest, Dózsa György út 84/C (1) 428-6800 (1) 428-6801 deloitteinhungary@ deloittece.com

160 1990

andrás moldován 1051 Budapest, Dorottya utca 1. (1) 328-6010 (1) 328-6011 info@moldovan.hu

106 1992

sándor sárközy, stefan sieferer 1062 Budapest, Andrássy út 121. (1) 814-9880 (1) 814-9898 budapest@roedl.hu

József k. tálas 1051 Budapest, Bajcsy-Zsilinszky út 16. (1) 457-0550 (1) 214-8419 office@sarandpartners.hu

✓

name of assoCiate nonhungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ established

28 2007

Rupert várnai 1037 Budapest, Szépvölgyi út 141. (1) 920-2040 – budapest@ cathayassociates.com

otheR

top loCal exeCutive addRess phone fax email

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmC

employment

Competition

eneRgy

banking and finanCe

tax

Real estate

CommeRCial

legal speCiality aReas

no. of offiCes WoRldWide yeaR established hungaRian offiCe

Cathay assoCiates váRnai és táRsa Ügyvédi iRoda

no. of attoRneys (With liCense to pRaCtiCe) no. of tRainees no. of paRtneRs of hungaRian offiCe on may 1, 2016

Rank 17

Company Website

Budapest Business Journal | June 3 – June 16, 2016

Data privacy, marketing law, consumer protection

Cathay Associates KeJie Beijing 2009

–

Squire Patton Boggs (US) LLP Washington 1890

Jeantet - d'oRnano iRoda www.jeantet.fr

12 5 2

✓

–

✓

–

✓

sbgk Ügyvédi iRoda www.sbgk.hu

12 9 6

✓

–

✓

–

✓

–

✓

1969

sChönheRR hetényi Ügyvédi iRoda www.schoenherr.eu 17

bán, s. szabó & paRtneRs Ügyvédi iRoda

11 1 7

bpv Jádi németh www.bpv-jadi.com

11 4 4

deloitte legal szarvas, Erdős és TÁrsai Ügyvédi iRoda

11 7 1

www.bansszabo.hu

Ügyvédi iRoda

www.deloittelegal.hu

moldován és táRsai Ügyvédi iRoda 18

www.moldovan.hu

sáRközy Rödl & paRtneR Ügyvédi iRoda, Rödl & paRtneR Ügyvédi táRsulás www.roedl.de

sáR és táRsai Ügyvédi iRoda 19

12 4 2

www.sarandpartners.hu

BBJ_2411_spec_report.indd 31

11 2 2

10 3 7

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

Deloitte Legal

Ÿ Ÿ

–

Mackrell International Woking, UK 1987

–

Rödl & Partner GbR Wirtschaftsprüfer, Steuerberater, Rechsanwälte Nuremberg 1977

–

EPLAW

Ÿ Ÿ

1998

2016. 06. 01. 21:17

no. of offiCes WoRldWide yeaR established hungaRian offiCe

–

Ernst & Young Law Germany 2002

Approx. 70 countries 2011

szabolcs vámosi-nagy, péter vaszari 1132 Budapest, Váci út 20. (1) 451-8100 (1) 799-0766 v-nsz@v-nsz.hu

–

MSI Global Alliance London 1990

110 1992

alice dessewffy 1061 Budapest, Andrássy út 43. (1) 413-3340 (1) 413-3341 office@dessewffy.com

–

European Law Firm Eindhoven, the Netherlands 1989

27 1998

József kapolyi 1051 Budapest, József nádor tér 5–6. (1) 267-3975 (1) 267-3949 info@kapolyi.com

–

TaylorWessing e|n|w|c Rechtsanwälte GmH Vienna 1986

30 1995

orsolya bánki 1051 Budapest, Dorottya utca 1. (1) 327-0407 (1) 327-0410 budapest@taylorwessing.com

–

TELFA (The Trans European Law Firms Alliance) Brussels 1989

26 2002

tibor bihary 1026 Budapest, Pasaréti út 83. (1) 391-4491 (1) 200-8047 office@biharybalassa.hu

–

Norton Rose Fulbright LLP London 1794

More than 50 1989

János burai-kovács 1062 Budapest, Andrássy út 100. (1) 354-4300 (1) 354-4399 office@burai-kovacs.hu

–

Ius Laboris Global HR Lawyers, Multilaw Brussels, London 2001 / 1990

125 / 300 2003

marianna Csabai 1126 Budapest, Tartsay Vilmos utca 3. (1) 488-7008 (1) 488-7009 info@clvpartners.com

–

LUTHER Rechtsanwaltsgesellschaft mbH Cologne 1992

18 2014

attila fest 1054 Budapest, Báthory utca 8. (1) 791-7060 (1) 791-7065 office@festandpartner.hu

–

Alfa International Chicago 1980

150 2000

zoltán forgó, gábor damjanovic 1123 Budapest, Alkotás utca 17–19. (1) 214-0080 (1) 214-0078 office@fdlaw.hu

Projects, construction

Independent Legal Alliance, MME Legal AG Zürich – –

12 2014

eszter kamocsay-berta 1054 Budapest, Széchenyi rakpart 8. (1) 301-3130 (1) 269-0016 reception@kcgpartners.com

vámosi-nagy eRnst & young Ügyvédi iRoda a member ﬁrm of ey global 19

www.ey.com/hu/en/services/tax/TAX Legal services

10 7 2

✓

–

✓

–

desseWffy és dávid valamint táRsaik Ügyvédi iRoda www.dessewffy.com 20

kapolyi Ügyvédi iRoda www.kapolyi.com

bánki and paRtneRs laW fiRm in CoopeRation With tayloRWessing e|n|w|c ReChtsanWÄlte gmbh www.taylorwessing.com

9 2 3

8 4 1

7 3 5

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

name of assoCiate nonhungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ established

top loCal exeCutive addRess phone fax email

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmC

employment

Competition

eneRgy

banking and finanCe

tax

Real estate

legal speCiality aReas

CommeRCial

Company Website

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

no. of attoRneys (With liCense to pRaCtiCe) no. of tRainees no. of paRtneRs of hungaRian offiCe on may 1, 2016

Rank

32 3

bihaRy, balassa és táRsai Ügyvédi iRoda www.biharybalassa.hu

7 1 2

buRai-kováCs és paRtneRei Ügyvédi iRoda www.burai-kovacs.hu

7 1 6

Clv paRtneRs Csabai és táRsai Ügyvédi iRoda

7 1 3

www.clvpartners.com

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

fest és táRsa Ügyvédi iRoda

www.festandpartner.hu 22

foRgó, damJanoviC & paRtneRs laW fiRm www.fdlaw.hu

7 2 2

7 3 4

✓

–

✓

–

✓

kCg paRtneRs Ügyvédi táRsulás www.kcgpartners.com 22

BBJ_2411_spec_report.indd 32

7 4 4

✓

–

✓

–

✓

–

2016. 06. 01. 21:17

www.bbj.hu

no. of offiCes WoRldWide yeaR established hungaRian offiCe

name of assoCiate nonhungaRian laW fiRm oR CoopeRation netWoRk WoRld hQ established

otheR

life sCienCes

publiC pRoCuRement

intelleCtual pRopeRty

dispute Resolution

CoRpoRate / m&a

enviRonment pRoteCtion

tmC

employment

Competition

eneRgy

banking and finanCe

tax

Real estate

legal speCiality aReas

CommeRCial

no. of attoRneys (With liCense to pRaCtiCe) no. of tRainees no. of paRtneRs of hungaRian offiCe on may 1, 2016

Rank

Company Website

Budapest Business Journal | June 3 – June 16, 2016

top loCal exeCutive addRess phone fax email

6 2002

arne gobert 1134 Budapest, Róbert Károly krt. 70-74. (1) 270-9900 (1) 270-9990 office@gfplegal.com

levente antal szabó 1011 Budapest, Corvin tér 10. (1) 796-3600 (1) 796-3636 info@klartlegal.eu

9 2013

ádám illés 1051 Budapest, Apáczai Csere János utca 11. (1) 235-1090 (1) 235-1099 office@peterkapartners.hu

7 2005

Csaba polgár 1011 Budapest, Szilágyi Dezső tér 1. (1) 799-0140 (1) 799-0141 admin@hunlaw.hu

19 1996

lászló szécsényi 1024 Budapest, Buday László utca 12. (1) 345-4535 (1) 345-4543 office@szecsenyi.com

bWsp gobeRt és táRsa Ügyvédi iRoda www.gobertpartners.com 23

klaRt szabó legal Ügyvédi táRsulás www.klartlegal.hu

peteRka & paRtneRs iRoda www.peterkapartners.com

6 5 2

6 – 3

6 2 1

✓

–

✓

–

✓

–

✓

–

✓

–

BWSP, Globalaw Berlin 2012 / 1994

IBA (International Bar Association)

Ÿ Ÿ

2014

–

Peterka & Partners advokatní kancelar s.r.o. Prague 2000

–

PONTES – 2005

Gambling

Cyrus Ross Brussels 1990

–

Norton Rose Fulbright London 1794

50 1998

károly varga 1065 Budapest, Bajcsy-Zsilinszky út 53. (1) 302-9090 (1) 302-9092 halcsi@t-online.hu

–

Conybeare Solicitors, Gowling WLG, Berwin Leighton Paisner London 1997 / 2016 / 2001

1 / 18 / 14 2008

lászló hajdu 1013 Budapest, Pauler utca 11. (1) 799-8230 (1) 799-8231 office@hplegal.eu

3 2005

géza katona 1125 Budapest, Fészek utca 16. (1) 225-2530 (1) 202-2842 central@katonalaw.com

pontes budapest Ügyvédi iRoda www.ponteslegal.eu

6 2 3

széCsényi és táRsai Ügyvédi táRsulás 23

www.szecsenyi.com

6 6 3

vaRga káRoly és táRsa Ügyvédi iRoda

6 1 2

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

hp legal haJdu & paRtneRs laW fiRm www.hplegal.eu

5 2 2

katona és táRsai Ügyvédi iRoda www.katonalaw.com

5 – 2

✓

–

✓

–

✓

–

✓

–

✓

–

SCHRÖMBGES+ PARTNER Partnergesellschaft Rechtsanwälte Steuerberater mbH Hamburg

knight biRd & biRd iRoda

5 3 6

sQuaRRa & paRtneRs Ügyvédi iRoda

4 2 3

salló Ügyvédi iRoda

3 – 2

www.twobirds.com

www.squarra.hu

www.decapoa.com

Ÿ= would not disclose, NR = not ranked, NA = not applicable

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

–

✓

Data protection, sports

Bird & Bird LLP London 1846

28 2008

peter knight 1054 Budapest, Szabadság tér 14. (1) 799-2000 (1) 799-2088 budapest@twobirds.com

–

Telecommunications and e-commerce

Warwick Legal International Network London 2001

58 1997

thomas a. squarra 1016 Budapest, Avar utca 8. (1) 474-2080 (1) 474-2081 info@squarra.hu

–

Studio Legale De Capoa e Associati Bologna, Italy 1986

6 2000

krisztina salló 1055 Budapest, Honvéd utca 38. (1) 331-0311 (1) 312-1683 budapest@decapoa.com

–

This list was compiled from responses to questionnaires received by June 1, 2016 and publicly available data. To the best of the Budapest Business Journal’s knowledge, the information is accurate as of press time. While every effort is made to ensure accuracy and thoroughness, omissions and typographical errors may occur. Additions or corrections to the list should be sent on letterhead to the research department, Budapest Business Journal, 1075 Budapest, Madách Imre út 13–14., or faxed to (1) 398-0345. The research department can be contacted at research@bbj.hu.

NOTES: (1) Dentons (formerly Salans) have been in Budapest since 2006.

BBJ_2411_spec_report.indd 33

2016. 06. 01. 21:17

4 Socialite BBJ

RESTAURANT REVIEW

Moving the meat to a new street Carne di Hall’s terrace outside its new home in Pest is sure to attract drop-in trade, but the chef’s gourmet celebration of fine flesh, fish and fowl actually makes this a destination restaurant. BBJ STAFF

Carne di Hall has been all about carnivores since it first opened in Buda more than ten years ago. Fortunately, during its recent relocation to Pest, the restaurant carried its protein-packed philosophy over the river, and it remains a meat-maven’s paradise with a gourmet mentality. Back in Buda, Carne di Hall felt a bit off the beaten path, but it was always worth the trip. Its current location, in Pest is on a pedestrianized street in the Palace Quarter, which is probably the second busiest place in Budapest for going out, after the Jewish Quarter. Tucked in among the upscale wine places and The rich duck breast with sweet potatoes, funky student bars in its new home, the and other treats prepared in the kitchen restaurant’s terrace is likely to see its of Carne di Hall. share of drop-in trade. But this is still a dining destination: Whatever you order tends to exceed While you could just stop by Carne di expectations, with surprisingly intense, Hall because you are in the neighborhood, diverse and satisfying taste sensations. it would make plenty of sense to go to the To complement the fine cooking the neighborhood with the express intention restaurant deals directly with a small group of Hungarian vintners, who of getting a fancy meal at Carne di Hall. There is more than just carnage going provide them with a stock of about 25 on here: Chef Márk Bóné has earned his very good wines. Like the menu, the chops (and steaks) in some of Pest’s more wine-list is relatively short, and superbly creative restaurants. His kitchen infuses curated, and the servers can recommend French and Asian flavors into superior a different wine for every course, or a cuisine that, happily, does not neglect good bottle to pull a meal together. the steak-and-potatoes sensibility of Along with being knowledgeable about generous portions of high-end comfort the wine and food, the servers are friendly food. In short, a perfect meeting place for and fast, whisking tempting platters up gourmet and gourmand alike. from the cellar restaurant. The cellar has Gourmets are sure to appreciate the lots of cosy seating and actually gets fussed-over starters, full of artfully decent sunlight from its ground-level displayed diverse bites, like the “Beef windows. But throughout the summer, Tartare Duo” jazzed up with cilantro, or the most popular spot is sure to be the the grilled goose liver with red fruits and terrace, surrounded by bars, cafés and root vegetables. more casual restaurants. For a main course, you will be tempted The bustle of nearby places provides to go meaty, maybe with one of the beef lively surroundings for your meal, and options, like filet mignon and potatoes if you go to the trouble to find this served in the sauce of the day. Other destination restaurant, there is a good meat offerings include lamb, Mangalica chance you will be eating better than your pork and rabbit. Fish and fowl are also neighbors. available: Dishes like duck breast with VIII. Krúdy Gyula u. 6. Open Mon-Sat, sweet potatoes and fruit are rich and noon-midnight. (tel: +36 30 446 90 04, packed with flavors. www.carnedihall.eu)

BBJ_2411_socialite.indd 34

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4 Socialite

www.bbj.hu

Budapest Business Journal | June 3 – June 16, 2016

Springing into a cultural scene Q

The director of the Budapest Spring festivals talks about the success of this highlight of the capital’s cultural calendar.

Tells us about some of the more popular shows, such as “The Silk Road” fashion show, where the creations of two Chinese designers, Szaju and Youjia Jin, were presented along with local designer Katti Zoób at the Hungarian National Museum. A: China and Chinese culture were key themes of the Spring Festival this year, and the fashion show presented the meeting of East and West in dress and diversity of costumes. I was also touched by the new ballet première of László Dubrovay’s “Faust, the Damned”. We had a very rare chance to watch a performance where a modern composer wrote thematic music for a grand ballet. I greatly enjoyed the concerts of Sarah McKenzie, Joey DeFrancesco, Kálmán Oláh and Gábor Farkas, and I think the literary community programs held in the Üvegház, where poetry and music met, were also of special importance. To mention an open-air program, the lightpainting by Laluz Visual in City Hall Park was another highly innovative and young-spirited project.

BBJ STAFF

The recently completed Spring Festival featured a host of special talent that drew rave reviews. Teodóra Bán, the director of the Spring and Summer Festivals, talks about the success of the latest festival and about plans to build on the current energy.

What expectations did you have concerning the Budapest Spring Festival organized this year? A: One of the main goals of this series of events is to point out the direction of development in the various branches of art and, furthermore, show examples to cultural consumers so that they can get down to the essence of everything during a single festival. Part of the mission of the Budapest Festival and Tourism Center is to educate cultural culturally conscious consumers. We are devoted to offering the highest possible quality to them, to encourage a long-term investment beneficial to all parties concerned. It is of particular significance that we guarantee the audience high-standard experiences, ranging from works of art to all forms of performances. In this way, guests can decide to become patrons of art. It has become a tradition that programs offered during the festival are centered on priority themes. Franz Liszt is quite a “recurring theme” in music, while the 135th anniversary of Béla Bartók’s birth was celebrated this year, and we have also commemorated the great French composer, Erik Satie, as well as Sándor Szokolay, another prominent Hungarian composer, who was born 85 years ago.

You are often recognized and greeted by the visitors at the various events, such as during the Festival Opening Promenade. A: Yes, there are many people returning to the festival from year-to-year. These personal encounters are especially exciting, because it is first of all our foreign visitors who approach and greet me. I often meet Hungarian guests as well, since my friends and acquaintances regularly visit these events. The great number of foreign visitors returning to the festival is a proof and guarantee for the high standard of our work, and at this time of the year, almost all hotels are fully booked in Budapest. Surveys indicate that many tourists arrive in Hungary especially for this festival.

festival that it offers a great introduction opportunity for promising young artists. While cooperating with the biggest cultural institutions in Hungary, such as the Budapest Festival Orchestra, the Hungarian State Opera, the National Philharmonic Orchestra, MÜPA and Vigadó, we are in close connection with several colleges and universities as well. Many young artists are also invited to this series of events, where they can show their talent and skills. The Budapest Spring Festival acts as a kind of Maecenas, by creating a community forum that can significantly help the younger generation in catching up with the art elite. The presence of world-famous artists and productions, such as Ramón Vargas or What do you regard as the the performance of “Turandot” by the most attractive feature of the festival? Chinese National Opera House, are also What would you estimate the proportion of foreign visitors A: One of the most positive features of key elements of our success, since they at the Budapest Spring the Budapest Spring Festival is that we set the upper quality limit of the event, have managed to bridge the gap between which is consequently well structured, Festival to be? the spring and the autumn (CAFE) both horizontally and vertically. A: About 30-40% of the visitors are foreigners, although many are residents festivals. For some time, the former had been regarded as a parade of classical Which programs and artists of Hungary, holding high positions in arts, while the latter as a contemporary did you like the best? How do you see the their own fields and being sophisticated Budapest Spring Festival art forum. Since I have been engaged in A: To tell you the truth, I cultural consumers. As far as their when looking back at this the organization of the Spring Festival, look at the performances, productions composition by age is concerned, it year’s events? we have made significant progress in and exhibitions with different eyes, and is mostly elderly people who are able A: As an organizer, one tends to think expanding the traditional frameworks of therefore I cannot rank the participants to travel and spend so much time that the festival just closing its gates has both events, opening up to new artistic in such a way. This is also because I am here in the spring, while the younger been the best of all. But this year it is endeavors. unable to attend all the programs, which generation is attracted to Hungary right to say that we have just finished I think it very important to present are organized at numerous sites during primarily in the holiday season, when the Budapest Summer Festival is of one of the best series of events in the the various forms of art that have the 17 days of the festival. past few years. This resulted from become integrated in our lives, such In other words, the Budapest Spring particular importance. At that time, a a highly favorable constellation of as literature, dance, and music. I would Festival is a festival for the whole city, lot of young people and families arrive not even call the art of our present as the programs are not confined to the in Budapest especially to attend opencircumstances. The success is due, on one hand, to culture “contemporary”, setting up a biggest and most prestigious institutions. air festival programs on Margaret Island, harmonic cooperation with the Palace of separate category for that, because I am For the past three years, we have been for instance. Arts (MÜPA), which is the co-organizer convinced that classical culture and the present at many sites in almost all These programs are a guarantee for of the Budapest Spring Festival and present time have to be in an organic districts, including private galleries, maintaining international interest in our CAFE Budapest Contemporary Arts relationship with each other, and the local theater stages and community culture, while dismantling the cultural Festival. On the other hand, we have a Budapest Spring Festival is dedicated to centers. Meanwhile, organizers have barriers between people, as music and well-functioning coordination system, creating such an interesting dialogue. learned to schedule their best programs dance are the common languages of the in that the participation of artists, art world. It is another positive feature of the for the Spring Festival period.

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companies and orchestras is planned and booked two to three years in advance. Our efforts have proven to be profitable, because we had an extraordinarily grateful audience again this year, and our concerts, performances and shows were highly popular. State sponsorship and the presence of various institutions and other business partners are further indispensable factors for success. Without them, we would not be able to meet the expectations posed to us by Hungarian society and the arts scene, in order to guarantee that the Budapest Spring Festival remains a model of its kind at an international level as well.

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Budapest Business Journal | June 3 – June 16, 2016

WHAT’S

BUDAPEST ESSENTIALS June 2-5, various venues

Budapest Essentials features a solid selection of live music, DJs, gastronomy and culture at some of the city’s coolest venues, many of which are not purposebuilt concert halls. One ticket gets you access to all festival events spread across the city. The concept is to transform Budapest into one big festival in concert halls, world heritage sites and public buildings. This year’s roster includes Amon Tobin, Todd Terje, Black Coffee, Captain Knuckles, DJ Koze and plenty of local talent as well. budapestessentials.com KECSKEMÉT CITY BALLET: CARMEN June 3, Palace of Arts Rodion Shchedrinʼs ballet suite version of the opera by Georges Bizet, a work that ADVERTISEMENT

Fun things to d o in Budapest for the nex t t wo weeks.

pushed the boundaries of sexuality in its day, was banned in the 1960s. In this narrative, Carmen is the embodiment of the independent female spirit. Under the direction of choreographer Dóra Barta, the Kecskemét City Ballet has created its own version of the diabolic femme fatale archetype, while staying true to the opera’s original protagonists and conflicts. mupa.hu BELFESZT June 3-5, Erzsébet tér, Szabadság tér and Zrínyi utca The Belvárosi Fesztivál (aka BelFeszt) is a free music festival held across a handful of inner city venues from Erzsébet tér to Szabadság tér, to Zrínyi utca. Most musical genres are represented including jazz, rock, pop, folk and electronica. The festival also features dance performances,

Julius Popp’s Bit.Fall. fashion shows, film screenings and children’s programs. The silent disco gives late night revelers a chance to tune into their preferred DJs on their own pair of headphones under a summer night sky, without disturbing the neighbors. facebook.com/ events/1532317997078095/ SUMMER ETYEK PICNIC June 4-5, Etyek The Etyek wine region is the nearest to the capital and the regularly scheduled Etyek picnic gives visitors an opportunity to sample the best of local wines alongside traditional Hungarian cuisine. More than two-dozen vintners will be proffering their goods. The nearby Korda Film Studios will also host a stuntman show on Saturday. etyekipiknik.hu FIRE! ORCHESTRA June 6, A38 Made up of the cream of the Swedish music scene, Fire! Orchestra comprises free-punk saxophonist Mats Gustafsson, percussionist Andreas Werliin and bass-guitarist Johan Berthling. Their music blends improvisation, free jazz, psychedelic rock, and noise and for this show they’ll bring material from their latest release “Ritual”. a38.hu

JONAS KAUFFMANN June 7, Palace of Arts Jonas Kaufmann is regarded as not only an excellent singer, but also an extraordinary artist. The most important aspect of this distinction is of course his voice, characteristically dark in color, yet bright and pure, and just as capable of delicacy and suppleness as it is of gravity and drama. All of these are matched by exceptional acting skills, which give him access to an unusually broad repertoire. He sings Wagner and Verdi, Beethoven and Puccini, as well as Richard Strauss and Massenet. On this evening he will perform some two-dozen works by Mahler, Britten and Strauss. mupa.hu FŐZDEFESZT AND STREET FOOD SHOW June 10-12, Városliget (City Park) This specialty festival attracts devoted fans of craft beer while also providing a foray into the street food craze that has taken over Budapest. Now at a bigger and better venue, visitors can enjoy a beer-bathed picnic in the heart of City Park with all the food and drink supplied by local vendors. More than 60 breweries from across Europe offer more than 200 varieties of beer. The theme this year is “The Return of the Lager”, so expect

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Budapest Business Journal | June 3 – June 16, 2016

Balaton Sound 2016

Balaton Sound, the summer beach party, organized by Lake Balaton will once again bring the most prestigious names of the electronic and hip hop scene. The 5 days festival is celebrating its 10th edition this year with many exciting venues and programs. The line-up is now complete with DVBBS, The Chainsmokers, Duke Dumont, Bassjackers, Wiley and many more! Balaton Sound is held in Zamárdi between 6-10 July, 2016.

Fire! Orchestra. plenty of this highly favored, light brew, that’s experiencing a bit of a comeback of late. fozdefeszt.hu JAPANESE FILM WEEK June 14-18, Japan Foundation This year’s Japanese Film Week will showcase eight recent film releases from Japan with a focus on narratives that contain protagonists who could not be more different. They have, however, one thing in common: the influence of music on their lives and personalities. These films will teach audiences about Japanese culture from the lives of students, to classical musicians, to the curious story of a Buddhist priest. All films at the festival will be screened in their original language with English subtitles. jfbp.org.hu JULIUS POPP: BIT.FALL June 16, Ludwig Museum German artist Julius Popp’s Bit.Fall is taking place within the framework of Dunapest Festival, an exhibition which presents the rich cultural life of cities along the Danube River with a special focus on the connection between these cities and the river. Bit.Fall translates the abstract process of sourcing, exchanging and updating information into an experience for the senses. Here information is represented by words, which are generated by software – Bit.Fall – based on a statistic algorithm. ludwigmuseum.hu

ROOMS June 16, BMC The Rooms trio comprised of Hans Lüdemann, Sébastien Boisseau and Dejan Terzic is a “revelation”, as the French Jazz magazine Jazzman once put it. It opens new perspectives, creates spaces, and explores joyful musical discoveries. The three personalities that have come together to form this group found their sound and an effortless flow of musical ideas the first time they played together. Their music is deeply rooted in jazz but can frequently veer into unexpected directions, revealing a diverse creative approach. Rock music and the electronic expansion of the piano are all integrated into their sound. The result is lively and contemporary. Rooms recorded new material for BMC Records last summer, which will be released in the fall. bmc.hu WAGNER IN BUDAPEST FESTIVAL June 16-24, Palace of Arts Organized by artistic director Fischer Ádám with an international cast and creative team since 2006, the Wagner in Budapest Festival has grown to become a very popular event for aficionados of the genre. In the early editions, the repertoire expanded by one opera from “The Ring of the Nibelung” tetralogy each year, as a result of which the entire Ring cycle can now be enjoyed on consecutive days just as Richard Wagner intended. All performances will be staged in German with subtitles in Hungarian and German. mupa.hu

BUDAPEST STRINGS AND FACES OF THE WORLD June 27 - July 9 at Óbuda Társaskör The Budapest Strings will open the Music in the Garden concert series, which is part of the Óbuda Summer Festival. The series features compositions from two prominent members of the Bach family. Special guest and Liszt Awardwinning flutist Béla Drahos will join the orchestra, followed a few days later by accordionist Gábor Gera. From 2013 until recently Gera lived in Japan but also travelled the world collecting melodies. He will present an assortment of musical styles from tango, to bossa nova, chansons, Russian folk music and Balkan beats.

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Kraak & Smaak live (NL) Balaton Sound, the summer beach party, organized by Lake Balaton will once again bring the most prestigious names of the electronic and hip hop scene. The 5 days festival is celebrating its 10th edition this year with many exciting venues and programs. The line-up is now complete with DVBBS, The Chainsmokers, Duke Dumont, Bassjackers, Wiley and many more! Balaton Sound is held in Zamárdi between 6-10 July, 2016. Balaton Sound, the non-stop beach party, will be as great and diverse as in the previous nine years. Celebrating its first decade the massive program of the 5 days will attract everyone who is into electronic music and hip hop. Besides the already prestigious line-up, organizers have added several new names as a final touch to the program. DVBBS, The Chainsmokers, Duke Dumont as well as Bassjackers, Andhim and Wiley will also be there in Zamárdi. The so called Day 0, 6th July, already featuring Macklemore & Ryan Lewis on the Main Stage, Oliver Heldens in the Telekom Arena will also host acts at the Jager Arena, as Chocolate Puma or Milk & Sugar. Among the program we can also find Stadium X and Peter Kruder. Besides the biggest stages as the Main Stage, the Telekom Arena and Jager Arena, many program venues will great vibes as well. This year the Bass Stage powered by Bladerunnaz will host more than 40 acts such as Mefjus, Die, Murdock, Black Sun Empire, The Upbeats, Nickbee, Dismantle and Lady Waks. The energy is guaranteed and

Dimitri Vegas & Like Mike (B) the music will be powered from 5 in the afternoon until morning. Several venues will be built on the Lake itself, so one can enjoy names such as Guy Mantzur, Watermat, H.O.S.H. and more. Those who want to leave the festival area for a short while, but stay in the festival atmosphere should get their ticket to the special exclusive Balaton Sound boat parties, taking place every day on Lake Balaton! Music will be brought to the boat by special DJs each day as Agoria and Rodriguez JR. Live on 6th July, Andhim on 7th July, Adriatique on 8th July, H.O.S.H on 9th July and Peter Kruder on the 10th July. Various accommodation possibilities are still open, so one can choose to stay next to the festival area at the Beach Camping in pre-settled caravans or in the Caravan Camping or just in the regular camping area that is located approximately 10 minutes from the festival area. For more information and tickets visit: www.balatonsound.com

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Budapest Business Journal | June 3 – June 16, 2016

Wine: Hárslevelű proves to be anything but harsh The 2015 crop of this Hungarian grape is performing beautifully, as a tasting in City Park’s fairy tale castle complex proved.

When picked at the right time, from the right place of growth, and when given sufficient care and attention, it is capable of making some of the very best – if not the best – dry whites in Hungary.

ROB SMYTH

What to do with a grape with a name like Hárslevelű when it comes to tempting foreign wine lovers? Well, while the tricky, four-syllable Hungarian word doesn’t exactly roll off the tongue for non-Magyars, some of the dry wines made from Furmint’s often less-fancied best mate are very much speaking for themselves and proving to be anything but harsh (the English pronunciation of the Hungarian diminutive of the grape name sometimes used by locals). Some dislike Hárslevelű – and for good reason – based on their very real negative experiences: When harvested late it can be flabby, sickly sweetish and overtly floral, even when the wine is supposed to be at the dry end of the spectrum! However, when picked at the right time, from the right place of growth, and when given sufficient care and attention, it is capable of making some of the very best – if not the best – dry whites in Hungary. Indeed, many delicious and for the most part dry samples of Hárs (mainly from Tokaj) were poured at the Hárslevelűk Éjszakája at the charming venue of the Romanesque church in the Vajdahunyad castle complex, next to Heroes’ Square, on May 26. Some 2015 Hárslevelűs offerings already taste beautifully, and the grape is, indeed, capable of making wines that hit the high notes early doors. This is in contrast to Furmint, which often needs a couple of years to soften. One such 2015 Hárs already in fine fettle comes from Basilicus from Tarcal in the Tokaj region. It comes from two vineyards – the Lapis and the Mestervölgy – and was fermented and aged in barrels, with some lees stirring applied to whip up enhanced

Happy drinkers at the Hárslevelűk Éjszakája. mouthfeel. The resulting wine possesses ages really well, as a number of lots of ripe and juicy fruit, even tropical examples showed. Höldvölgy’s 2012 notes such as pineapple and mango, but comes from Mád’s über volcanic Betsek is round, supremely balanced and really vineyard, which tends to overwrite the elegant – it possesses rare sophistication characteristics of the grape but not for such a young wine. The lees stirring entirely in the case of this wine. From a and barrels thankfully don’t get in the hot, dry vintage in which there was hardly way of the fruit but do help add layers of any moisture left in the soil, this wine ably complexity to the wine. Gizella’s Barát reflects the conditions with lots of tropical Hárslevelű 2015, which comes from the and candied fruit, but there’s still enough fruity Pécs clone planted in deep loess, acidity there for it to keep its shape. is already oozing class with intense yet The same wine from 2009 is currently vibrant aromas of honey, tropical-stone becoming complete and complex. It’s fruit, and white flowers with plenty of quite oily and vegetal with the vineyard’s youthful zest of the balanced, fresh palate. salty minerality coming through strongly, but there’s still some fruit (particularly pineapple) to smooth things out. Like Benchmark Hárslevelű Furmint, Hárs is eminently capable of For many, myself included, the being an articulator of terroir for the way benchmark Hárslevelű is made by it captures nuances between different Kikelet’s Stephanie Berecz, who, when places of growth and brings them to the I quiz her as to which grape she prefers glass. From 2011, István Balassa’s Betsek between Furmint and Hárslevelű, says: “I is vegetal, herbal, grassy and very edgy like Hárs.” Her 2015 from the loess of the with its firm, focused and invigorating Lonyái vineyard in Tarcal shows why her acidity. Complex stuff! Another 2009 Hárs is held in such high esteem. It has came from the Géza Lenkey, who loves to an enticing range of varietally pure fruity give his wines some skin contact and lots and floral (blossom) aspects without of time in the barrel and bottle, before being too perfumed. On the palate, it has selling it. This wine, which comes from subtle but structured acidity that brings four Mád vineyards, was quite outside great balance and length. By contrast, the box but nevertheless impressive with Kikelet’s 2015 from the neighboring Váti notes of candle wax, incense, a hint of vineyard was a little bit on the sharp and leather, alongside some welcome fruit in pointed side, and needs to time round out. the form of pineapple – a recurring note at Not only does Hárslevelű make this tasting. It’s long and complex thanks sophisticated youthful wine, it also to the still very vibrant acidity – a key

component in helping wine age. Lenkey’s 2005 had lost the fruit and gone in a honey-caramel direction, but this was not a strong vintage by any means.

Growing old gracefully There is a growing body of evidence to suggest that Hárslevelű can age even better than Furmint as a dry wine. Let us not forget that with sweet wines less in demand than they were when the Hungarian wine industry picked up the pieces following the political transition, Tokaj sought to reinvent itself by making dry wines and all the energy was put into Furmint as the flagship grape. Dry wine from Hárslevelű took a back seat role. Now it is jumping into the front seat and threatening to take the wheel in Tokaj, although Furmint’s future is safe as it outnumbers Hárs significantly in terms of the amount planted in Tokaj. Thanks to a frantic recent wave of planting across the land, there’s also more Furmint than Hárslevelű in Hungary, although Hárs has long had a wider footprint. (Incidentally, Olaszrizling is still the most planted white grape in Hungary, although second-placed Furmint is fast catching up with it.) We shouldn’t forget either that both grapes work together to sublime effect as the two main grapes in making the world-renowned Tokaj Aszú sweet wine. Furmint provides the structure and acidity for aszú with Hárslevelű bringing its hedonistic richness to the palate party. There are increasing releases of blends of the two grapes as dry wines, which both makes sense and some great wines, such as those from Gizella and Höldvölgy.

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Wine rally to roll on two wheels The traditional tour now has a counterpart – on Vespas. CHRISTIAN KESZTHELYI

Based on the concept of the Hungarian Wine Route Rally (Magyar Borok Útja Rallye), the first Motorcycle Wine Route Rally will roll off from the horse track at Budapest’s Kincsem Park on June 3, heading toward the Hungarian wine regions of Mátra and Eger, organizers announced at a May 26 press conference in Budapest’s Pesti Vigadó. This new two-wheel rally is to serve as a prelude to the traditional four-wheel race in August. Participants in the June motorcycle rally will ride the latest Vespa models, on the occasion of the 70th anniversary of the brand, organizers said. Approximately 50 riders are expected to take part in the 400-kilometer journey. To ensure safety, police officers and the OxyTeam, a countrywide sports ambulance service, will guide motorists involved in the rally. During the two-day rally, participants will visit ten wineries, including Kovács Borház, Nandi Magdi Borászat, Molnár és

The May 26 press conference announcing the Vespa rally. Fiai Pincészet, Pálinkás Pincészet, Nyilas Passing through many of Hungary’s top Pincészet, Dubicz Borászat és Szőlőbirtok, wine regions, the route will take in Mór, Gróf Buttler Borászat, Holdvölgy, and Somló, the Balaton Uplands, Badacsony, Basilicus. Balatonfüred-Csopak and Boglár. Minister of Interior Sándor Pintér and Following the more than two-decadeMinister of Agriculture Sándor Fazekas old traditions of the rally, organizers pay special attention to safe driving; will oversee the motorcycle rally. Following this new event, the Hungarian participants can only taste and drink Wine Route Rally, which celebrated its wines in the evenings, when no driving 20th anniversary last year, departs on takes place. To ensure maximum safety, August 26 from Budapest, setting off on a all drivers are checked with a breathalyzer three-day road trip to Balaton, to visit the each morning before being allowed to sit vineyards around the lake. in their cars.

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