KCG Partners Law Firm

The coronavirus pandemic has been affecting both domestic and international trade and commerce around the world. States have reacted with robust mitigation measures, including closing borders, implementing a range of travel bans and engaging a myriad of internal domestic health and wellbeing procedures. These measures are causing unprecedented disruption to the trade, transport, labor market, production and supply chains. COVID-19 and the construction industry The impacts of COVID-19 and its mitigation measures on domestic and international trade and commerce is already palpable. Companies globally are being impacted through the labor market, production and their supply chain. The construction industry is heavily influenced worldwide by Chinese-made goods and materials, including everything from structural steel (China is the number one steel producer and exporter) and other building materials (copper, iron ore, zinc, nickel) to cabinet caseworks and fixtures. Next to these standard materials, China is also the largest producer of photovoltaic power since 2015. Finding and establishing alternative supply chains could mean higher material costs and potentially slower project completions. Given the facts that the construction industry heavily relies on human workforce and that China’s manufacturing output is declining, the possible consequence appears that many companies could find themselves either unable to perform their contractual obligations in time or at risk of not being able to do so at all in the future. Force Majeure in general Force Major (FM) clauses are included in long-term contracts as a way for the parties to delay or take a break in their performance obligations or to terminate the contract in extreme circumstances, typically extraordinary events beyond human control such as wars, riots, crimes, or natural calamities which would legitimately excuse their performance of the contract. Most building contracts have reasonably detailed definitions of what will amount to a FM event. Although the precise terms may vary, the general framework of FM in most construction contracts is similar. However, there are key differences in the treatment and recognition of FM across different jurisdictions. Force Majeure in Civil Law Systems Contrary to English law, where courts do not imply FM in the absence of an express contractual provision, civil law systems have a more developed concept of FM and may, in appropriate circumstances, excuse non-performance of a party based on FM, even in the absence of an express FM clause. In countries with a codified legal system, the civil code generally provides that a party will not be considered to be in breach of contract, and the performance of its contractual obligations will be suspended, if and to the extent that it has been prevented from carrying out those obligations by virtue of an event which was unforeseeable, is not attributable to any of the parties and was unavoidable. It is, therefore, important to consider the potential applicability of FM in the context of the governing law of the contract. Regardless of the law system, it is a mandatory requirement that the unforeseen FM event has to occur after the date of entry into force of the contract. Force Majeure Certificates Issued in China On 30 January 2020, the China Council for the Promotion of International Trade (“CCPIT”) announced that it would offer “force majeure certificates” to help affected enterprises minimize losses arising from COVID-19. The expectation was to help them in imminent disputes with foreign counterparties emerging because of the actions being taken then by the Chinese government. By the end of April 2020, more than 7,000 FM certificates covering contracts worth a combined USD 98 billion had been issued. To apply for the certificate, companies must provide legitimate documents such as proof of delays or cancellation of transportation to the agency. CCPIT has clarified that the clause does not excuse a party’s non-performance entirely but only suspends it for the duration of a period. However, there is no guarantee that a government certificate will make any difference, in fact, it might give Chinese companies a false sense of comfort. As to the future, it is likely that parties will continue to rely on FM certificates when invoking FM, and there appears to be some degree of international consensus that, while these certificates will have evidential weight, their issuance will not be determinative of the existence of a FM event. Unforeseeable event? Since FM clauses in general require that the event was unforeseeable at the time the contract was entered into, some commentators argue that after previous pandemics (e.g. SARS in 2003 or H1N1 in 2009), it may have been foreseeable that a similar virus could occur again and the parties may not be entitled to relief. It may be interesting to note that Hungarian courts had accepted the H5N1 (bird-flu) epidemic of 2006 as FM, e.g. where the party either could not deliver the animals due to transport restrictions, or simply had to slaughter them out of precaution. It is important that even if the outbreak of epidemics may not be seen as an unforeseeable event, due to the unprecedented scale of the lockdowns it is likely that the courts will accept that this outbreak does not constitute a foreseeable contingency such that reasonable steps could have been taken by the party affected by it. The party seeking to invoke a force majeure clause in its contract will need to prove that there are no alternative means for performing its obligations, or that it has taken all reasonable steps to avoid the operation of the clause. Increased costs or hindrances such as getting building materials from alternate sources, or hiring different manpower alone will not be sufficient to prevail on a claim of FM. Just because a contract has become more expensive or even uneconomic to perform, that will not constitute FM. Conclusion It is clear that this is a historical time from all aspects of life, including the consideration of pandemics as FM in the construction industry. With all the mitigation measures around the world, many cases may serve as precedents for the future and there will definitely be great lessons to be learned for future construction contracts. Authors: Gabriella Gálik, Dénes Glavatity

With numerous reports of energy-related business shutdowns, we reached out to local experts across CEE to understand what different markets have been dealing with, in terms of work and production stoppages, and look into the broader impact. The energy crisis in 2022 took its toll on energy-intensive companies and deeply affected many other businesses. The major factor behind it, according to Penteris Senior Partner Andrzej Tokaj, is “the high price of commodities – reflected in rising food and energy prices, leading to the increased operating costs of companies.” “Simply put, the Russian invasion of Ukraine means that the Slovak economy is exposed to potential serious gas supply disruptions, as approximately 85% of its natural gas is imported from Russia,” Havel & Partners Partner Ondrej Majer says, with ACI Partners Managing Partner Igor Odobescu adding that  energy-related shocks in Moldova have resulted in a sharp rise in natural gas prices: “the average price paid by consumers, not including power plants, has increased sixfold in one year.” Consequently, the markets in different countries are coping with the increased energy prices and potential scarcity of resources in different ways. Some markets have already seen temporary or indefinite shutdowns being announced. Energy-Intensive Industrial Production Grinds to a Halt In Poland, “the industries that consume the most energy in their operations have been hit the hardest,” Tokaj notes, adding that those energy-intensive sectors “include the paper industry, fertilizers and the nitrogen compounds industry, and those producing cast iron and iron alloys.” According to Tokaj, “to date, the most high-profile production stoppage on the market has been at the chemical giant Grupa Azoty, which, in August, decided to suspend or reduce production at some of its plants due to the high gas prices.”  He explains that Grupa Azoty “is Poland’s largest chemical industrial company.” Until now, “the production of melamine, a chemical compound used in the adhesives, paints and varnishes, automotive, and textile industries, has not resumed,” he adds. “In Moldova, building materials manufacturing is, so far, the industry most affected by the higher gas prices,” Odobescu reports. “At least two major players – the biggest brick and insulation materials manufacturer and the only significant porcelain tile producer – have announced production stoppages for an undetermined period.” According to Odobescu, “besides that, local authorities in the breakaway eastern region have reportedly limited the supply of gas and electricity to the only steel factory in Moldova, halting production.” Majer highlights that, in Slovakia, the factories in the metallurgical, automotive, chemical, glass, and food industries are experiencing the most acute problems: “one of the major aluminium smelters […] discontinued its operation at the beginning of autumn. In the summer, a diversified Central European ferroalloy producer also had to discontinue its operations and dismissed approximately 150 employees. It is currently unclear when these companies will restart their operations.” According to Majer, both companies belong to the largest metallurgical players in Slovakia. Kavcic Bracun & Partners Managing Partner Matej Kavcic highlights that Slovenia’s “metals industry, non-metallic mineral production, and paper production account for almost half of all the energy consumed in Slovenia, especially electricity,” with the “metals industry among the top manufacturing industries in terms of both turnover and exports.” Companies in the metals industry “have announced a reduction in production,” he reports, “with Slovenia’s biggest metals producer, the SIJ Group, announcing it will reduce production volumes by about one-third in September due to the extremely high energy prices and the uncertainty of customers accepting such price conditions.” According to him, “it is also expected that overall production will be about 40% lower in the fourth quarter of 2022” and, while those companies informed the public that there will be no redundancies for the time being, they “have introduced shorter working-hours and temporary paid layoffs.” Serbia has also seen some shutdowns, Gecic Law Partner Ognjen Colic notes, highlighting that “the factory in Novi Sad, part of the American Lear Corporation, has suspended work due to the situation in Ukraine. According to a management letter to employees, there were problems with the supply of components for production and customer orders, which led to the production stoppage.” He says that “approximately 2,500 workers were employed by this factory, which ceased operation” and, “therefore, the impact is significant.” According to Cobalt Partner Elo Tamm, in Estonia, the food production sector has been vocal that high energy prices are affecting its ability to continue production. Even worse, “permanent production stoppages and lay-offs have been announced in the furniture production and wood industry,” she notes. Transport, Hospitality, Retail, and Small Businesses Under Pressure In Croatia, Cipcic-Bragadin Mesic & Associates Partner Marina Mesic reports that “transport companies were most affected by the increase in fuel prices, where fuel prices directly affect the growth of input costs the most, since they make up 20 to 50% of their total variable costs.” And the crisis also seems to be impacting sectors that are traditionally not considered energy intensive. “Smaller businesses that may be affected by the increase in energy prices are those in the hotel, restaurant, arts, entertainment, recreation, and other services sectors, also hairdressers, and beauty salons, amongst others,” Tokaj notes, highlighting that these industries are struggling, as they “had already been affected by restrictions introduced in connection with the COVID-19 pandemic.” Kavcic agrees, saying that “the rising costs of energy are also affecting the Slovenian tourism and leisure industries that consume a lot of energy, like ski-resorts, spas, etc.” According to KCG Partners Founding Partner Eszter Kamocsay-Berta, the most affected companies in Hungary include “shopping malls, restaurants, theatres, kindergartens, and spas, where large spaces need to be kept warm.” Many restaurants are likely to opt for a temporary winter shutdown, she says, “but, in reality, this can be a very dangerous move, as they are unlikely to be able to keep their workers or lure them back when they reopen. 20 to 25% of Hungarian hotels are planning temporary closures in the first half of 2023.” Kamocsay-Berta reports that measures such as turning off “the evening outdoor lighting in restaurants before closing time” and “going digital, avoiding the energy costs of operating buildings,” are also frequently applied. A Metered Government Response The measures introduced by CEE governments range from price caps and subsidies to temporary export bans.  “Due to high energy prices and limited energy sources, the Polish government has introduced several regulations providing solutions for citizens, vulnerable parties, and energy companies so that, based on supplements and compensation, the final energy price is lower, known as the government energy shield,” Tokaj says. In Serbia and Hungary, price caps have been introduced on some basic foodstuffs. “Regulations that limit the prices of oil derivatives have also been adopted in Serbia, which, as a result of global market activity, last for a brief period and are subject to change,” Colic reports. “The government also set limits to the price of electricity for businesses, to run at EUR 95 per megawatt-hour from September 1 to December 31.” In addition to foodstuff price caps, Hungary’s government “has also imposed a 25% saving on gas consumption in state institutions and state-owned companies, except for hospitals and residential institutions,” Kamocsay-Berta notes. Other than energy price caps, among the measures introduced in Croatia “are the reduction of the VAT rate on gas and some agricultural products, subsidies for the price of gas for households, changes in the system of benefits for the socially disadvantaged, one-time benefits for pensioners, and some others,” Mesic reports. And Tamm notes that, while Estonia’s government “has instituted regulated energy prices for residents and SMEs, there have been no significant measures to help industrial and other businesses cope with high energy prices.” Meanwhile, in Moldova, the state also provides compensation and subsidies to ease the burden on companies. “To prevent shutdowns caused by high energy prices, monetary payments to compensate for increased natural gas prices were approved in March 2022,” Odobescu notes. Similarly, Slovenia’s government “introduced three different types of aid available to beneficiaries, namely: basic economic aid, special economic aid, and aid for energy-intensive businesses,” Kavcic points out. And in Slovakia, Majer reports an act was adopted allowing companies to request “subsidies covering additional costs caused by increases of gas and electricity prices,” and, additionally, “a special aid scheme was designed for electricity-intensive companies, which are allowed to request compensations.” Majer and Odobescu both highlight that other special measures have been introduced to prevent potential shutdowns caused by energy scarcity. According to Odobescu, “natural gas reserves were created, for the first time ever, by the state-owned energy trader. The gas is stored in Ukrainian and Romanian gas storage facilities and is sufficient to cover more than one month of consumption during the winter.” Finally, Colic points out that temporary export bans were also introduced in Serbia in 2022, with the government banning the export of certain goods, including “wood, gas, milk, oil, wheat, corn, and flour.” Odobescu adds that “as a response to the electricity deficit in Moldova, a temporary ban on crypto-mining activities was also ordered.” Author: Eszter Kamocsay-Berta

Tourism is an important economic sector substantially contributing to Hungary’s economy. Achieving growth in this increasingly competitive national and international market requires a supportive regulatory environment. Governments are introducing tax systems that are core to the sector’s development potential. The EU has recently conducted a study on “The Impact of Taxes on the Competitiveness of European Tourism.” It suggests reducing tourism taxes to improve tourist destinations’ competitiveness and support the local tourism sector. Hungarian Tourism Numbers If we compare the figures of Q1 2023 to the same period in 2022, we see that foreigners made 8.8% more trips to Hungary, and their expenditure increased by more than a third. The number of Hungarian trips abroad increased by 29% compared to a year earlier. Foreigners arriving in Hungary spent HUF 517 billion, and Hungarians traveling abroad spent HUF 252 bln. All these figures show that domestic tourism has performed well above expectations, and it is expected that, in»2023, the sector can experience a year similar to 2019, which brought the highest numbers before the coronavirus pandemic. Tourism-specific Taxes Seeing the vitality of tourism, the Hungarian state has recently re-introduced taxation of the tourism sector. One way of helping businesses hit hard by the coronavirus pandemic was for the state to waive the tourism development contribution (TDC) for touristic operators. However, this moratorium is now over, and the 4 % tax became due again from April 1. The TDC was introduced in 2018 under the tax package adopted in 2016, and it is payable on services such as: catering services of food and nonalcoholic beverages prepared on the premises (catering services can be restaurant services, confectionery services, catering vehicles, self-service catering, or other catering services); commercial accommodation services. TDC shows similarities to VAT. The service providers, however, pay 4% as TDC in addition to 5% as VAT. Both are calculated on the VAT-exempt income from the services. Another similarity is the due date of the contribution. Those who declare VAT monthly must also declare TDC by the 20th of the month following the month in question. Those who report quarterly must do so by the 20th of the month following the quarter, while those obliged to file an annual return must do so by February 25 of the following year. A significant difference between the two burdens is that TDC shall also be paid by those who are not liable to pay VAT, for example, because they received a tax exemption. This is typically the case for properties rented out for short periods for tourism purposes via Airbnb, where the contribution is also payable on the income generated. The revenue from TDC must be used by the state for tourism development purposes included in the state budget’s tourism earmarking, such as spending on promotion activities related to the Tour de Hongrie, the organization of Hungarian regional tourism development projects or the development of sector-specific IT systems. Similar Taxation Schemes A similar tax is payable by a wide range of Croatian businesses and individuals working in the tourism industry to help fund Croatia’s tourism boards. This tax is applied to total income, with rates varying according to a business’s location and activities. A total of 24 different rates apply, ranging from as low as 0.00646% to as high as 0.1615%. As with the accommodation tax, the law specifies the proportion of revenues generated by this tax that must be transferred to each level of tourist board (municipal, city, county and national). In summary, regulators have a crucial role in maintaining competitiveness in the tourism industry, particularly with the increasing global competition. Given the need of the governments to raise revenue on the one hand and to maintain competitiveness on the other, policymakers need to design the tax system carefully to balance these conflicting objectives. Authors: Eszter Kamocsay-Berta, Lilla Majoros

The European Commission had previously indicated that it will review the provisions of the General Data Protection Regulation (GDPR) this year to see if any changes are needed in light of the experience of the past six years. However, the Commission later stated that the review would not happen until 2028, although the GDPR obliges the Commission to submit its report on the review to the Parliament and to the Council every four years. The Commission claims that 10 years are needed to gain sufficient experience and it will also be necessary to see how the EU's artificial intelligence (AI) legislation develops and what problems it will raise. These can be reviewed at a later stage so that all stakeholders can be involved. It was expected that the Commission’s review would modify the GDPR in such a way that focuses a little more on practical problems, for example, the relaxation of extensive documentation requirements for small businesses. Others say that the dynamic development of AI demands a shift in the spirit of the GDPR. Its rather strict rules have already forced the EU legislator to grant exemptions from certain GDPR requirements for AI applications, this is how the so-called ‘regulatory sandbox’ rules were introduced into the EU Artificial Intelligence Regulation. However, according to stakeholders, these exemptions are still not enough to ensure the competitiveness of the European AI development. In the Commission’s view it was already known that if the GDPR is indeed amended, the amendment will not be comprehensive, since it is extremely time-consuming to negotiate with Member States and stakeholders and it would be doubtful to find a compromise. In April 2023, the European Parliament voted that it was essential to amend the GDPR implementing rules. In this context, several other actors had called for changes to certain provisions. For example, there is a lack of consistency in the practice of supervisory authorities about the legal bases for data processing, especially for clinical or scientific trials. In the Member States, the authorities’ practices on compliance requirements differ significantly. The EU Commission has therefore asked the European Data Protection Board to guide in these areas, but this has not yet been done. In addition, data protection authorities are so overwhelmed by complaints that they do not have the resources to deal with other issues (e.g. awareness campaigns, guidelines) and supervisory bodies are understaffed in many cases. The enforceability of children's rights also raises practical problems, which also would require certain amendments to the GDPR enforcement rules. Author: Rita Párkányi

On 8 August 2024, a new Government decree was published on the designation and operating conditions of the building authorities. The decree stipulates that the Government may designate the Government Office of the Capital and the Government Offices of the Counties as the general building authority for carrying out the tasks related to the building authority, such as the buildings and their construction activities. Exceptions to this are the specific types of structures, and also certain buildings listed in Annex 1 of the Government decree on the rules for the establishment, development and closure of airports and for the establishment and closure of landing sites. These include the terminal, the passenger or cargo building, the hangar building for the storage or maintenance of aircraft (except for mobile hangars), and the control tower building. In addition, this regulation also excludes the building authority matters that do not pertain to railway station buildings on underground railways. Furthermore, the Government appointed the heritage protection authority as the building authority responsible for overseeing tasks related to monumental buildings, their plots of land, and the monumental property of national monument status. However, in cases where either the Government Office of the Capital or the Government Offices of the Counties is the owner, trustee or user of the land, building or part of a building affected by the construction activities, the functions of the building authority will be performed by a substitute Government Office. The decree also stipulates that, except for buildings intended for the use of nuclear energy, the building authority of the principal use for which the building is intended shall act as the authorising authority if a new building is constructed for multiple use, and several building authorities, other than the principal building authority, are competent to authorise the separate use units to be built in this building. The functions of the building authority of the Government Office of the Capital and the Government Offices of the Counties are exercised by the Minister responsible for building regulation and building authority matters. The decree will enter into force on 1 October 2024, by repealing the former Government decree on the designation and operating conditions of the building and building supervision authorities. Author: Gabriella Gálik

Some of Hungary’s leading legal minds give us their take on the country’s evolving market, including significant growth areas (with ESG to the fore), the level of business-friendly legislation, and the law-making process itself. Please find below the questions and Eszter Kamocsay-Berta's answers. How would you describe Hungary’s legal market today? Is it stable? Might we see consolidation or new entrants? Hungary’s legal market today seems to be in transition. This primarily reflects changes in the economic environment. For example, Noerr’s Bratislava, Bucharest, and Prague offices are transferring to Kinstellar, while Noerr Budapest may take another route. We also observe quite a few moves from one law firm to another. What share of your workload today involves ESG compliance? How do you think this might change? An important practice for us focuses on employee stock ownership plans, which are popular due to their financial benefits, constituting a competitive advantage. Banks and corporations turn to us as few law firms have the technical expertise to successfully navigate them through the complex process of introducing an ESOP system. Judges and lawyers sit at the end of the legal process. You have to work with the laws the lawmakers give you. Are you happy with the current process for drafting new laws? What would you change? Drafting new laws has accelerated immensely as life gave us many unforeseen situations. This is challenging, as the lawmaking process is complex, and you have to know precisely how a change to one law might trigger others. Speeding up this process leads to a need for continuous reviews. AI technologies may help to make this process more resilient. Can you attract the quantity and quality of legal talent you require? How would you change the university law faculty curriculum? Fluctuation is an essential indicator of the agility of a law firm. We are proud to offer our colleagues an attractive career path from their student years until the top of the profession. Together with a college for advanced studies, we created a talent management program one and a half years ago for law students called Studia Pragmatica to attract talents from the beginning of their careers.

BACKGROUND INFO Eszter Kamocsay-Berta is an experienced transactional lawyer with a proven track record in advising corporations on their investments in Hungary. Independent industry publications rank her professional contribution as "top tier" in various project-related practices. She is a member of the Budapest Bar Association, the International Bar Association (IBA), and the International Nuclear Law Association. As managing partner, she leads a professional, cohesive team of high performance lawyers in KCG Partners. Kamocsay-Berta holds a Doctor of Laws degree from the Pázmány Péter Catholic University, Budapest, as well as a Master of Science Degree in social sciences from Eötvös Loránd University, Budapest. Her international educationstarted with her high-school graduation at Carl-Bosch-Gymnasium, Ludwigshafen, Germany, and included studies at the University of Stirling, Scotland, and a Master of Laws degree in international taxation from the Vienna University of Economics and Business. She has completed her expertise in "Engineering consultancy and FIDIC Contracts" at the Budapest University of Technology and Economics and her leadership skills at SEED School for Executive Education and Development, Budapest. "ln my understanding, the law is a free profession, where the key differentiators are knowledge, experience and commitment. This is the spirit in which we train the next generation of lawyers within our law firm." WHAT HAS BEEN THE HIGHLIGHT OF YOUR LEGAL CAREER TO DATE? There were many, starting in the early years from counselling Falcon Oil & Gas on its exploration activity in Hungary and the acquisition of its 35-year natural gas production license in the Makó Trough. This sort of project-minded legal advisory work was further developed by a large-scale industrial greenfield project for a Denmark-based global toymaker. Besides the work revolving around building the infrastructure for the plant, the electricity grids, the gas supply, ensuring the real estate on which a production base could be constructed and equipped with 21st century high-tech systems, this project entailed cross-practice coordination and an insight into the Danish culture, which is highly focused on holding a high standard of integrity. Another milestone was initiating and setting up a consortium comprising three international law offices to participate in a tendering procedure organized by the European Joint Undertaking for ITER and the Development of Fusion for Energy. This is an international nuclear fusion research and engineering project, currently building the world's largest experimental tokamak (magnetic field) nuclear fusion reactor in Cadarache, France. The panel submission resulted in a detailed response to a case study involving complex construction law issues and dispute resolution related to a FIDIC contract for the construction of energy facilities. ln the last few years, 1 have specialized more in alternative financing of projects and fund structuring. Thai said, we are proud to have been mandated by two large financial institutions to advise them on setting up, structuring and operating their new employee stock ownership schemes. Currently, 1 am professionally inspired by acting as a legal stakeholder in projects involving digital solutions and ESG compliance. A significant milestone of my career was the foundation of KCG Partners in 2014. Together with my co-partners, Levente Csengery, Gabriella Gálik and Rita Párkányi, we formed a partnership based on a shared vision of a modern multidisciplinary practice. WHY WOULD YOU RECOMMEND LAW AS A GOOD CAREER CHOICE? Law is like tennis; no matter what level you play at, it is an unfailing and rejoicing source of manifestation. Depending on your type of interest, preparedness and passion, the law gives you the freedom to shape the realities around you. ln my understanding, the law is a free profession, where the key differentiators are knowledge, experience and commitment. This is the spirit in which we train the next generation of lawyers within our law firm. Our value proposition is that we provide high-end, innovative solutions that generate value and give our clients a competitive advantage. WHAT IS THE MOST INTERESTING NEW FIELD OF LAW, IN YOUR OPINION, AND WHY? For me, it is not a single practice area but rather a set of legal solutions ensuring the shift in resource allocation in the economy of the 21st century, be they financial resources, natural resources or human resources. Legal solutions to optimize business operations, reduce costs, mitigate risks, and reallocate resources have always been and will remain highly interesting. Thai said, 1 would probably point at the tide of environmental and social governance as the most interesting new tide of law for me, for the time being. WHAT ARE THE BIGGEST CHALLENGES FACING LAW IN HUNGARY? The biggest challenge facing law in Hungary is a matter of viewpoint. For me, being a transactional lawyer, it is of high relevance how legislation can facilitate the responsible governance of resources in complex, interconnected economies.

BACKGROUND INFO Levente Csengery is one of the founders of KCG Partners and has worked with partners Eszter Kamocsay-Berta, Gabriella Gálik and Rita Párkányi for almost 20 years. KCG Partners has been built on their pervasive friendship and “brothers and sisters in arms” attitude. Csengery graduated from the University of Szeged as a Doctor of Law. After graduation, he spent two and a half years attending the New York University School of Continuing and Professional Studies, acquiring a certificate in U.S. law and methodologies. He also did a Master of Laws program at Benjamin N. Cardozo School of Law, New York, in 2004. Before founding KCG Partners, Csengery worked at the global law firm Gide Loyrette Nouel as the head of the employment and litigation groups, at Clifford Chance as a senior associate managing the labor law team and supporting the litigation team, and at Salans, focusing on employment law and dispute resolution. Csengery has been married for 18 years and is a father of two, a 15-year-old boy and a 12-year-old girl. His wife is also a lawyer who worked for 20 years in the Ministry of Justice, heading the EU infringement procedures department. He describes himself as a passionate “forest wanderer” and a hunter. “A significant challenge nowadays is that clients tend to wish to receive advice immediately and in full complexity. So, lawyers have much less time to understand their clients’ business, which largely influences the level of service. ‘A lawyer knows nothing but understands everything,’ as they used to say in our profession!” HOW HAS THE LEGAL PROFESSION CHANGED SINCE YOU QUALIFIED, AND WHICH WAS YOUR BIGGEST CHALLENGE? Many changes have hit the legal profession since I started my career, and these seem to come much faster than what I used to hear from my uncle, Blaise Pasztory, a well-known international lawyer practicing for 60 years from the 1960s in the United States and later in Hungary. A few of these changes are i) the utterly swift legislation procedures, sometimes lacking the appropriate amount of time for preparation for the legal community and society, ii) the “always being available” theory, iii) instant communication on several channels, and iv) the occasional lack of humility of the new generation towards work and other people. In addition, a significant challenge nowadays is that clients tend to wish to receive advice immediately and in full complexity. So, lawyers have much less time to understand their clients’ business, which largely influences the level of service. “A lawyer knows nothing but understands everything,” as they used to say in our profession! HOW DO YOU EXPECT DIGITIZATION AND ARTIFICIAL INTELLIGENCE TO AFFECT THE LEGAL PROFESSION? Undoubtedly, both have a great impact on the legal field, although it is bigger for digitization thus far. Considering the digital filing and search systems in our everyday work, programs assisting tremendously in the public administrative and filing procedures, as well as virtual connectivity, all can boost the legal profession and enhance attorney-client communication. AI is a bit different; we have been discussing it for more than a decade already, but most legal professionals have not yet met with it due to the size of their practice, agility and willingness to use it or to other circumstances. It is still the “music of the future” how deeply AI will penetrate a conservative profession like the law, where personal relations and connections hold the utmost interest and influence. As we usually say in our office, whatever AI can take over in the office, let’s let it. TECHNOLOGY ASIDE, WHAT WILL BE THE NEXT SIGNIFICANT LEGAL TREND TO SHAPE THE MARKET HERE? Due to geopolitical trends and events in Europe and the wider world, economies tend to close, and blocks appear to progress. Europe, especially the CEE region, is dependent on these tendencies, and the sort of development we saw in the last decade appears now to be held back. So, legal trends that help put things back on the right track should take the lead, such as pro-growth structural reforms. Aside from international private law, public law might also arise since states are becoming more prominent market players. GIVEN THAT HUNGARY HAS A VERY TIGHT LABOR MARKET IN ALMOST ALL FIELDS, ARE YOU CONCERNED ABOUT FINDING ENOUGH SUITABLY QUALIFIED JUNIOR LAWYERS? This is the ultimate challenge not only for every law firm but for every other company because this problem reaches far beyond the legal profession. KCG Partners has continuously grown organically; we always tried to cherry pick the right personal fit for the team and integrate them effectively. Thanks to this policy, we have a lot of colleagues who started with us as summer interns or trainees and have now become senior associates. We often initiate pioneer projects, like the so-called “Studia Pragmatica” project we invented with a vocational college. In this program, university students work in our office as paralegals under a closely controlled mentorship program. They are jointly selected by the college and us and involved in actual legal tasks. Some are even seconded to clients with a mentor. This program is unique and has several advantages for all participants. During this period (which lasts for a semester), the students realize what legal work in a law office looks like and how it feels to be a team member. For the client, they get the support they need and might find new candidates; since the students get to know the client as well as the client becomes acquainted with the student, they might continue working together after graduation. For us, we might also find our new generation trainees, if they wish to stay. After more than three successful semesters of practice, it seems it is helpful for students to leave the safety of academia to gain some field experience.

New technologies, spearheaded by artificial intelligence, are shaping the legal dialogue surrounding innovation, consumer protection, and the integrity of market competition within Hungary and the European Union as a whole according to KCG Partners Founding Partner Rita Parkanyi. "The sheer pace at which new technologies are entering the market fascinates me," Parkanyi begins. "As consumers, we're on the frontline, witnessing the speed of this evolution; yet, from a legal perspective, it's equally intriguing to observe how EU regulation adapts to these changes." As Parkanyi puts it, there is a need to balance innovation with consumer protection and market fairness in this dynamic field. In the EU, "the AI Act is nearing its final stages and aims to set a precedent by introducing global standards for AI use," Parkanyi continues. "This monumental effort is akin to the introduction of the General Data Protection Regulation, focusing on a risk-based approach to ensure security, respect human rights, and foster innovation. It's a significant legal undertaking, shaping the future of AI regulation," she stresses. Moreover, Parkanyi reports that "the Hungarian Competition Authority has initiated a market analysis to assess the impact of AI technologies. This research is crucial as it explores the dual aspects affecting both consumers and market players," she says. One of the concerns is the potential threat to competition in the digital sector, "especially since AI technologies require extensive data sets, which only a few tech giants possess," Parkanyi explains. "This concentration of resources could lead to market monopolization. Furthermore, the authority is investigating advertising practices that may exploit consumers through AI tools, elevating the need for vigilance and informed consumer choices." Parkanyi says that she anticipates this analysis will wrap up by the summer of 2024. "The process, expected to take about six months, involves engaging with market players, analyzing the practices of Hungarian companies, and reaching out to major tech firms. The aim is to understand the broader implications of AI on competition and consumer protection, guiding potential regulatory responses," she explains. "The investigation into Microsoft's Bing is fascinating as it exemplifies the scrutiny AI services undergo," Parkanyi says. "The focus is on whether the information provided to users is sufficiently detailed, emphasizing the importance of transparency and the quality of information customers receive. This inquiry reflects broader concerns about how AI technologies are deployed and communicated, highlighting the need for clear, accessible information to empower users," Parkanyi concludes.

We are proud to announce that KCG Partners have advised Corvinus Zrt., the Hungarian state-owned investment fund in the strategic acquisition of majority interest of Budapest Liszt Ferenc International Airport. As a result of the complex transaction, Corvinus acquired 80 percent indirect stake in Budapest Airport Zrt., while France's Vinci Airports acquired  the remaining 20 percent and becomes the airport operator of Budapest Airport. This transaction is one of the (if not the) most significant acquisitions in Hungary in recent memory, both in terms of size and value, and KCG Partners were happy to contribute professionally to the success to a deal of such scale. The transaction team of KCG Partners was led by Eszter Kamocsay-Berta (Managing Partner), and included Gabriella Gálik (Founding Partner), Rita Párkányi (Founding Partner), Levente Csengery (Founding Partner), László Madák (Partner), Bálint Zsoldos (Attorney at Law), Réka Fülöp (Associate) and Tamás Zsíros (Associate). We are proud to have been part of this unique and high-profile transaction and congratulate all parties and advisors involved for the joint success.

BACKGROUND Eszter Kamocsay-Berta is an experienced transactional lawyer with a proven track record in advising corporations on their investments in Hungary. As managing partner, she leads a professional, cohesive team of high-performance lawyers in KCG Partners. Eszter holds a Doctor of Laws degree from the Pázmány Péter Catholic University, Budapest, as well as a Master of Sciences Degree in social sciences from Eötvös Loránd University, Budapest. Her international education started with her high-school graduation at Carl-Bosch-Gymnasium, Ludwigshafen, Germany, and included studies at the University of Stirling, Scotland, and a Master of Laws degree in international taxation from the Vienna University of Economics and Business. She has completed her expertise in “Engineering consultancy and FIDIC Contracts” at the Budapest University of Technology and Economics and her leadership skills at SEED School for Executive Education and Development, Budapest. “It takes time and money to introduce a new technology before we can see any tangible results in efficiency and ultimately in profit growth. But once you found the right one for your business needs, it can be a killer UVP for the whole firm.” Most recently, Eszter received the SEED Excellence Award for her exceptional professional and leadership achievements. Her success is reflected in prestigious international rankings and awards, including Legal 500 EMEA Top Tier, Leading Firm, Rising Star, and Recommended Lawyer distinctions. Beyond her professional excellence, Eszter has fostered an exemplary company culture — one that values social responsibility, continuous professional and leadership development, and corporate coaching. She is also deeply committed to sharing legal knowledge and raising legal awareness through articles and podcasts, while actively helping those in need with pro bono legal services and supporting young lawyers and attorneys. AI IS DISRUPTING THE WORLD AS WE KNOW IT. HOW HAS YOUR FIRM BEEN ADAPTING TO THIS TRANSFORMATION TO HARNESS THE ADVANTAGES OF THE TECHNOLOGY? We are increasingly adopting AI technologies to support our business. We use AI in repetitive and administrative works such as preparing translations and summaries, legal research as well as in data management such as in our controlling system. These tools help us to be more effective by spending less time on these works with lower added value while release capacity in more complex tasks, where literally our collective intellectual brainwork provides a competitive edge in the market. HOW DOES THE WIDESPREAD USE OF DIGITALIZATION AND AI AFFECT YOUR HEADCOUNT AND REVENUES? Digitalization and AI is reshaping law firms in several ways, bringing both efficiency gains and strategic challenges. AI-driven automation is replacing many routine tasks. With its help, firms can do more with fewer people, leading to a fewer but more productive workforce, which can boost profitability. This allows independent firms such as KCG Partners to compete with larger firms without expanding headcount. With AI reducing the time spent on tasks, traditional billable-hour models are being challenged. As AI reduces costs for legal tasks, firms may face pressure to lower fees in certain fields. However, firms that leverage AI strategically can offset this by expanding into higher-value services. We also seek to explore new areas of business where AI may help us to offer new tech-driven services like compliance monitoring and contract analytics. However, because of the diversity of AI technologies, it is challenging to find the right choice when considering the opening of a new revenue stream. It takes time and money to introduce a new technology before we can see any tangible results in efficiency and ultimately in profit growth. But once you found the right one for your business needs, it can be a killer UVP for the whole firm. WHERE IS THE LEGAL MARKET HEADING? IS THERE MORE CONSOLIDATION ON THE HORIZON, OR DO INDEPENDENT BOUTIQUE FIRMS HAVE A CHANCE TO MAKE IT BIG WITH THE HELP OF CUTTING-EDGE TECHNOLOGY? While AI-driven technologies might reduce some traditional legal roles, they also create new opportunities in legal tech, compliance, and consulting. KCG Partners embraces AI as a tool to enhance human expertise rather than replace it. We believe that with the help of AI technologies KCG Partners will further growth in both revenues and client satisfaction. HOW DO YOU RATE THE INCOMING TALENT POOL OF FRESH GRADUATES? MANY COMPLAIN IN GENERAL THAT THIS NEW GENERATION IS DIFFICULT TO DEAL WITH. We also experience that recent graduates have different career expectations, seeking better work-life balance rather than the traditional long-hour, high-intensity legal career path. Recognizing this change, we are providing clearer and more individual career progression paths, mentorship and coaching programs to retain top talent. The technological changes gave more autonomy to the younger generation but this is a two-way street, which is founded on mutual trust. Speaking directly to this generation, it might be quite challenging to identify which skills should receive more focus and energy to develop during the university years. For my generation, the priorities were clear: graduate at a top university, speak languages and have a high work ethic. It might be challenging now even to to figure out which skills might help to stand out from the “crowd”. My view is that cutting edge skill might be to be multidisciplinary by combining legal education with knowledge from fields such as technology, business, or social sciences.  

It is with immense pride that our Founding and Managing Partner Eszter Kamocsay-Berta has received the exceptional honor of being one of the three recipients of this year’s SEED Excellence Award! Eszter Kamocsay-Berta was recognized for her exceptional leadership as the founder and Managing Partner of KCG Partners Law Firm, which has earned multiple international rankings, including Legal 500 EMEA Top Tier distinctions. She has built an exemplary corporate culture—one that values social responsibility, continuous professional development, and corporate coaching. In addition to leading our firm, she actively contributes to legal education through articles and podcasts, provides pro bono legal services, and supports young lawyers in their career growth. We wholeheartedly congratulate her and are delighted to be part of Eszter’s team!

The 2024 Deal of the Year in Hungary was announced at the CEE Deal of the Year Awards banquet in Prague on April 1, 2025. Since 2017, CEE Legal Matters has been presenting the Deal of the Year Award for recognizing and celebrating the largest and most important deals in Central and Eastern Europe. We are thrilled to announce that the winner of the Deal of the Year 2024 for Hungary was "Corvinus and Vinci Airports’ Acquisition of Budapest International Airport from AviAlliance, Malton, and CDPQ", in which transaction KCG Partners played an important role as well. The acquisition of Budapest International Airport by the Hungarian State was a landmark transaction—complex, challenging, and of great national significance. We are proud to have been part of this historic deal and congratulate to all parties and advisors involved on all sides of the deal who contributed to making this transaction a reality. Of course, no success is ever achieved alone. We would like to extend our deepest gratitude to our exceptional legal team, whose tireless efforts, deep expertise, and strategic thinking made this achievement possible. A special thanks to CEE Legal Matters as well for this prestigious recognition. It is an incredible honor to be acknowledged among such outstanding peers in the legal industry. This award inspires us to continue striving for excellence, embracing new challenges, and shaping the legal landscape with dedication and innovation. Thank you once again, and congratulations to all the other winners!

On the evening of April 1, 2025, the Deal of the Year Awards Banquet brought together, under the same roof, over 200 top-tier lawyers from Central and Eastern Europe's leading law firms and General Counsel from across the region in Prague. The black-tie Deal of the Year Awards Banquet, which ran in parallel with the 2025 CEE General Counsel Summit, recognized and celebrated the largest and most important deals in Central and Eastern Europe. The winners of each Country Deal of the Year, as well as the winners of the CEE Deal of the Year, are: Albania: AYEN AS Energji’s EUR 110 Million Syndicated Loan (GKC Partners (White & Case); Kalo & Associates; Kolcuoglu Demirkan Kocakli; Wolf Theiss) Austria: Vauban Infrastructure Partners’ EUR 803 Million Acquisition of Cellnex’s Austrian Telecommunications Tower Assets (Clifford Chance; Hogan Lovells; KPMG Law; Schoenherr; Wolf Theiss) Bosnia and Herzegovina: Schneider’s Acquisition of Imaco Systemtechnik (Aulinger Rechsanwalte; Maric & Co) Bulgaria: E&’s Acquisition of PPF Telecom Bulgarian, Hungarian, Serbian, and Slovakian Assets (Djingov, Gouginski, Kyutchukov & Velichkov; Karanovic & Partners; Lakatos Koves & Partners; Perkins Coie; Schoenherr; Sullivan & Cromwell; Van Doorne; White & Case) Croatia: Aggreko’s Acquisition of Resalta (Allen Overy Shearman Sterling; BDK Advokati; Divjak, Topic, Bahtijarevic & Krka; RTPR; Rutgers & Posch; Schoenherr; Selih & Partnerji) Czech Republic: CEZ´s Acquisition of GasNet from Macquarie (Allen Overy Shearman Sterling; Burges Salmon; Loyens & Loeff; Skils) Estonia: Mainor Ulemiste’s Acquisition of Majority Stake in Technopolis Ulemiste from Technopolis Baltic Holding (Triniti; Sorainen; Ellex) Greece: Athens International Airport 30% Stake Sale Through IPO (Clifford Chance; Dracopoulos & Vassalakis; Koutalidis; Latham & Watkins; Milbank; PotamitisVekris; Linklaters; White & Case; Your Legal Partners; Zepos & Yannopoulos) Hungary: Corvinus and Vinci Airports’s Acquisition of Budapest International Airport from AviAlliance, Malton, and CDPQ (Bittera, Kohlrusz & Toth; CMS; Freshfields; Herbert Smith Freehills; KCG Partners; Kinstellar; Latham & Watkins; Linklaters; Orrick; PK Law Firm; Wolf Theiss) Kosovo: Maverix Private Equity’s USD 30 Million VC Funding of Kode Labs (Cytowski & Partners; Nallbani Law Firm; Osler Hoskin & Harcourt) Latvia: AirBaltic’s EUR 380 Million Bonds Issuance (Arthur Cox; Cobalt; Dentons; Linklaters; TGS Baltic) Lithuania: AB Siauliu’s EUR 200 Securitization Vehicle (Ellex; TGS Baltic) Moldova: Trans-Oil Group’s USD 550 Million Eurobond Issuance (Arthur Cox; Baker & McKenzie; Gladei & Partners; Harneys Aristodemou Loizides Yiolitis; Homburger; Linklaters; Sayenko Kharenko; Turcan Cazac) Montenegro: Krnovo 72-Megawatt Wind Power Plant Refinancing by KfW IPEX-Bank (Allen Overy Shearman Sterling; Karanovic & Partners; Dentons) North Macedonia: SMA’s Holding’s Acquisition of Studio Moderna (Bona Fide; Deloitte Legal; Tashko Pustina; Van Campen Lien) Poland: Cerberus’s Acquisition of VeloBank from Bank Guarantee Fund (Clifford Chance; CMS; Linklaters; Rymarz Zdort Maruta) Romania: EnergoNuclear and FCSA Joint Venture’s EUR 3.2 Billion EPCM Contract for Cernavoda NPP Units 3 and 4 (CMS; Dentons) Serbia: Actis-Led Consortium’s Acquisition of Telekom Srbija Tower Portfolio (CMS; Deloitte Legal; Kinstellar; Paul Hastings; PwC Legal; Simpson Thacher; Van Campen Liem; White & Case) Slovakia: Creditas Group’s Acquisition of a 100% Stake in GGE from Infracapital (Barger Prekop; BPV Braun Partners; Dentons; Polacek & Partners; Watson Farley & Williams) Slovenia: Aggreko’s Acquisition of Resalta (Allen Overy Shearman Sterling; BDK Advokati; Divjak, Topic, Bahtijarevic & Krka; RTPR; Rutgers & Posch; Schoenherr; Selih & Partnerji) Turkiye: Petrol Ofisi’s Acquisition of British Petroleum’s Downstream Business (Akin Gump; Ashurst; Baykal Saris Law Firm; Gen Temizer Erdogan Girgin; Kinstellar; Kolcuoglu Demirkan Kocakli) Ukraine: NJJ Holding and Horizon Capital-led Consortium’s Acquisition of Datagroup-Volia and Lifecell (Avellum; Bredin Prat; Clifford Chance; CMS; Dentons; DWF; George Yiangou; Gide Loyrette Nouel; Kinstellar; Redcliffe Partners) And the CEE Deal of the Year: E&’s Acquisition of PPF Telecom Bulgarian, Hungarian, Serbian, and Slovakian Assets (Djingov, Gouginski, Kyutchukov & Velichkov; Karanovic & Partners; Lakatos Koves & Partners; Perkins Coie; Schoenherr; Sullivan & Cromwell; Van Doorne; White & Case) Congratulations to all the winning deals and those who made them happen!