Hungary: Recent Deals
Representing investors in the development of the first top-class student housing project in Budapest
Gárdos Füredi Mosonyi Tomori Law Office provided legal advice to a Hungarian company in the course of establishing a project company with Austrian investors for the development of the first privately-owned student residence in Hungary. András Nagy and Botond Horváth participated in the establishment of the company and represented the client during the negotiations of the shareholders’ agreement.
Representing a leading Hungarian bank in a civil procedure for the payment of a bank guarantee
Gárdos Füredi Mosonyi Tomori Law Office represented Raiffeisen Bank in a litigation, where the claimant requested payment under a bank guarantee issued under URDG. The guarantee was issued via SWIFT message with the assistance of an advising bank for advance repayment to the plaintiff, an Italian company.
The guarantee contained that it enters into force if the plaintiff pays the advance payment directly to the bank. Nonetheless the plaintiff paid it directly to the other party of the secured transaction. When the commercial contract was not performed the plaintiff demanded payment from the bank and alleged that the guarantee it received did not contain the said condition.
The first instance court found that the guarantee can be deemed issued when the beneficiary receives it and it bounds the issuer according to the content of the guarantee as received by the beneficiary. As the court found that the guarantee received by the plaintiff did not contain the condition it ordered it to be performed.
We represented the bank at the second instance level. We argued that under the URDG a guarantee can be considered issued only when it leaves the power of the issuer, in the case at hand when it sent the SWIFT message, and that it has been properly proven that at this time the message contained the condition. The second instance accepted our arguments and overturned the first instance judgement rejecting the claim of the plaintiff.
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