Jump to Content Jump to Main Navigation
Signed in as:
Oxford Law Citator
Sign up for alerts

20 Vienna

Nikolaus Pitkowitz

From: Choice of Venue in International Arbitration

Edited By: Michael Ostrove, Claudia Salomon, Bette Shifman

Content type:
Book content
Product:
International Commercial Arbitration [ICMA]
Published in print:
09 January 2014
ISBN:
9780199655717

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2023. All Rights Reserved. Subscriber: null; date: 06 June 2023

Subject(s):
UNCITRAL Model Law — Arbitral agreements — Recognition and enforcement — Awards — Place of arbitration

(p. 513) 20  Vienna

20.1  Background

20.1.1  History and development

20.01  Austria’s arbitration law dates back to 1781, when arbitration rules were first codified.1 Subsequently, in the Austrian Code of Civil Procedure (Zivilprozessordnung, hereinafter ‘ACCP’) of 1895, a dedicated chapter on arbitration was introduced which remains the (p. 514) source of today’s arbitration law. The most notable changes to the ACCP were made in 1983 and 2006, in order to adapt to international arbitration standards.2

20.02  The ACCP enshrines the statutory rules of Austrian arbitration law in its sections 577–618, which substantially implement the UNCITRAL Model Law on International Arbitration (the Model Law) and do not differentiate between domestic and international arbitration. In addition to the ACCP, the Austrian Enforcement Act (Exekutionsordnung) regulates the enforcement of foreign arbitral awards, in accordance with treaties such as the New York Convention.3

20.03  With close to 250 years of arbitration tradition, Austria has established a solid legal basis, which is further reinforced by the extensive arbitration case law of the Austrian Supreme Court. Looking at the legal framework, and in particular the case law, Austria must be considered an ‘arbitration friendly’ jurisdiction. Arbitration is given significant status in Austria’s legal system; courts support arbitration and arbitral awards are very rarely set aside. These factors have certainly helped Vienna to become one of the best respected and busiest international arbitration venues.

20.04  In addition, a broad collection of commentaries, treatises and essays by academics and practitioners (many written in English) address almost every conceivable arbitral issue. Several Austrian universities have departments focusing on arbitration, the most renowned of which is the University of Vienna, with scholars dedicated to commercial arbitration as well as to investment arbitration.

20.05  With this legal toolbox readily available and few restrictions on services rendered by non-Austrians, international arbitrations pending in Austria attract practitioners as arbitrators, party-counsel, or consultants from all around the world. Practitioners are also attracted by the annual William C Vis International Commercial Arbitration Moot, the world’s biggest arbitration event, attracting some 300 University teams and 900 arbitrators, which celebrated its twentieth anniversary in 2013, as well as by numerous arbitration conferences every year, including the Vienna Arbitration Days.

20.1.2  VIAC and the Vienna Rules

20.06  Vienna has a remarkable tradition of institutional arbitration. In 1949, arbitral institutions were formed by the Austrian Federal Chamber of Commerce, initially handling both domestic and international arbitration cases.4 On 1 January 1975 the Austrian Federal Chamber of Commerce established the Vienna International Arbitral Centre (VIAC).5 VIAC only (p. 515) handles international disputes.6 There are also other arbitration centres in Austria dealing with both domestic and international disputes.7 In addition, Vienna is often selected as a seat for ICC arbitrations and ad hoc arbitrations (particularly under the UNCITRAL Arbitration Rules). It is estimated that in 2012 in total of more than 200 arbitration cases were pending in Vienna.

20.07  The exceptional reputation of VIAC has made an important contribution to promoting Vienna as an arbitral venue. During the last ten years the VIAC caseload has more than doubled. The typical duration of VIAC proceedings is one year. As of the end of 2010 there were 70 international cases pending before the VIAC with an aggregate amount in dispute of €3.25 billion; as of the end of 2011 there were 83 cases pending with an aggregate amount in dispute of €683 million. At the end of 2012 there were 79 cases pending before VIAC with an aggregate amount in dispute of €826 million. By the end of April 2013, 80 international arbitral proceedings were pending at VIAC, with an aggregated amount in dispute of €1.4 billion.8 These statistics cover only international cases fully administered by VIAC. In addition, VIAC also administers a substantial number of ad hoc cases pending in Austria, usually when it has been agreed upon or designated as an appointing authority under the UNCITRAL Arbitration Rules.

20.08  The Vienna Rules, promulgated by VIAC, are aimed at providing a lean and flexible framework. In 2012 VIAC initiated a comprehensive review process aimed at modernizing, overhauling, and streamlining its rules. The process included a widely distributed user survey, a number of discussion rounds, and a road show. Given the overwhelming positive feedback on the existing rules, the reform commission decided to maintain the lean and flexible approach. The new rules were adopted in May 2013 and will apply to all proceedings commenced after 1 July 2013. The most important changes are:

  • •  Joinder of third parties. The arbitral tribunal has the authority to order joinder of third parties either at the request of one of the parties or at the request of that third party. The tribunal is thereby granted wide discretion, provided that it has heard all parties and the third party to be joined. When deciding on the joinder, the arbitral tribunal must also determine the manner of such joinder (ie with a full party status or as mere amicus curiae). The provision also recognizes the right of a third party included as a party to participate in the formation of the arbitral tribunal.9

  • •  Consolidation of proceedings. The VIAC executive board has the power to consolidate proceedings upon request by the parties or when the same arbitral tribunal (or sole arbitrator) has been appointed.10(p. 516)

  • •  Multi-party proceedings. In line with the established principles under the former rules, the principle of party autonomy in multi-party proceedings prevails under the new Vienna Rules. If one party or a group of parties fails to agree on a nominee to be confirmed as arbitrator, the failure to reach agreement will not automatically invalidate the nomination by the other side. Only in exceptional cases does the VIAC executive board have the authority to replace an arbitrator already appointed. In that respect the Vienna Rules deviate from the so-called Dutco approach.11

  • •  Costs. The system of flat rate costs (as compared to hourly rates for arbitrators) has remained unchanged, since it means that parties have the opportunity to plan ahead and has proved to be an incentive for arbitrators to streamline the proceedings. The VIAC cost scale, which is internationally considered to be on the moderate side, has been slightly amended, to permit more flexibility, especially for arbitrators’ fees.12 This also permits the Secretary General to apply cost incentives to arbitrators effectively handling a dispute. The Vienna Rules 2013 also contain an explicit obligation of both parties to jointly fund the costs of the arbitration13 and grant the arbitral tribunal the power to direct the defaulting party to pay its share of the cost advance.14

  • •  Expedited proceedings. The Vienna Rules 2013 also contain specific fast-track regulations which are, however, only applicable if the parties explicitly agree to these under an opt-in mechanism. For expedited proceedings there is an obligation to render a final award within six months (unless extended).

20.1.3  Mandatory rules

20.09  Austrian arbitration law recognizes a very high degree of party autonomy. Nevertheless, there are certain provisions of Austrian arbitration law that are generally considered mandatory for all arbitrations seated in Austria, regardless of any agreement by the parties. Although most of these provisions are addressed in greater depth later, for ease of reference they are summarized here. Many of these mandatory rules (eg due process provisions) require that a party raises a timely objection.

20.10  The mandatory provisions concern:

  • •  the writing requirement of the arbitration agreement;

  • •  the need for an uneven number of arbitrators—for impartial and independent arbitrators—and the right to request court assistance for the appointment of arbitrators, the right to challenge arbitrators, and the right of an arbitrator to prematurely terminate his function;

  • •  the obligation to conduct the proceedings so that the parties are treated fairly and equally, granted the right to be heard, and have the right to appoint counsel of their choice;

  • •  the right to request support from state courts;

  • •  the limitations on the arbitrability of disputes;

  • •  the form and effects of an arbitral award, the rules governing correction, interpretation and amendment of the arbitral award, and the right to challenge an arbitral award;

  • •  the limitations on arbitration for consumers and in employment matters.

(p. 517) 20.1.4  Arbitration Amendment Act 2013

20.11  While there are no major changes expected in the Austrian arbitration landscape, one amendment aimed at further streamlining the arbitration process has been resolved lately. Under the Arbitration Amendment Act 2013,15 legal actions aimed at setting aside arbitral awards no longer run through all three instances of the Austrian court system, but are directly filed with, and decided by, the Austrian Supreme Court.16 The amendment was finally approved by Parliament in summer 2013.

20.1.5  Comparison with other venues

20.12  Vienna has a very diverse and widespread base. In 2012, VIAC was administering proceedings with parties from 43 different countries.17 The majority of these proceedings were seated in Vienna.18 Vienna is traditionally the leading arbitration venue for Central and Eastern Europe (CEE) disputes but has in recent years increasingly become attractive also on a global level, particularly for North American and Asian matters. Foreign companies doing business with CEE partners often select Vienna. Vienna’s leading role in the CEE region is based on a number of factors distinguishing it from other arbitral venues in Europe. Among these are the stability and predictability of the Austrian legal system, its arbitration friendly approach, Austria’s status as a neutral country, its cultural diversity and its track record of bridging disputes between East and West. The accessibility of Vienna and convenience certainly also play an important role. Vienna, the capital of Austria, is located in the heart of Europe and considered the hub of Central and Eastern Europe. More than 420 million people can reach Vienna within two hours. Vienna features a large number of (reasonably priced) five star hotels and excellent arbitration facilities.

20.13  Some eastern European venues are still struggling with legal and other problems.19 To name a few, in Russia and Ukraine, the arbitrability of shareholder disputes is questioned.20 In 2012, Hungary enacted legislation prohibiting arbitration affecting state-owned property.21 Several jurisdictions limit the parties’ right to freely nominate arbitrators,22 or restrict the language of the arbitration proceedings.23

(p. 518) 20.14  Arbitrations in Austria follow an international standard. The legal framework in Austria can generally be compared with that of most other venues that have implemented the UNCITRAL Model Law, such as Germany. Because Austria is a civil law jurisdiction, courts generally take an inquisitorial rather than an adversarial approach. Also, the Austrian ACCP has few mechanisms for obtaining document production. Nevertheless, international arbitrations pending in Austria will typically follow international standards and Austrian courts recognize this.

20.15  On a European level, when parties cannot agree to Vienna as venue for the arbitration, they often opt for one of the other leading European venues, such as Switzerland, Paris, London, or Stockholm. In contrast to Vienna, none of these jurisdictions has adopted the UNCITRAL Model Law. Switzerland (like Austria) is praised for its neutrality. Switzerland is also the only leading European arbitration venue that is not an EU Member State. This may be seen as an advantage, protecting awards from annulment for violation of EU (competition) law, but may also lead to unexpected results, as, for example, in cases of insolvency.24 Paris is well respected as venue of arbitration and seat of the ICC Court of Arbitration. However, the reduced scope of mandatory provisions under French arbitration law grants arbitrators significantly more flexibility but also makes proceedings less predictable.25 London is usually only chosen when the parties agree on English law as the governing law. Since all continental European legal systems are based on civil law that is not often the case for intra-European commercial contracts. The main difference between London and Vienna (apart from the higher cost of arbitration proceedings in London) is the possibility to appeal against substantive errors in the arbitral award under English law.26 Stockholm is sometimes chosen as an alternative to Vienna in Russia-related matters due to its historic role in US-Russian trade relations.

20.16  On a global level, Singapore and Hong Kong are often chosen as alternatives to Vienna when Asian parties are involved. For North American parties, New York is often selected as an alternative venue and the ICDR Rules are frequently selected.

20.2  The Arbitration Agreement

20.2.1  General

20.17  At the outset, it is important to discuss the Austrian legal position on the effectiveness and validity of an arbitration agreement. The existence of a valid arbitration agreement is a prerequisite for the jurisdiction of an arbitral tribunal. As a general rule, Austrian law thereby grants arbitral tribunals (and not state courts) the primary responsibility to determine that issue.

(p. 519) 20.2.2  Interpretation of arbitration agreements (double nature)

20.18  The Austrian Supreme Court has ruled in a long-standing line of cases that an arbitration agreement has a double nature—that it has both a procedural and a contractual aspect. It must be primarily interpreted under procedural law and only secondarily under applicable contract law. Since Austrian procedural law does not contain any explicit interpretation rules, the ‘primary’ interpretation method in effect only mandates the primacy of the literal wording, which, as the case law emphasizes, must always constitute the limit for any interpretation.

20.19  While the procedural interpretation will always follow Austrian law, for the secondary interpretation method, the contract law applicable to the arbitration agreement will need to be applied. This will be Austrian law if this is expressly or impliedly agreed. An implied agreement could, for example, exist if the parties have chosen Vienna as the seat of arbitration.27 When applying Austrian law, general contract interpretation rules are, in principle, used as guidelines. These consider the intention of the parties and also attempt to fill any lacunae. In cases of doubt, the interpretation favouring arbitration will be applied. However, given the primacy of procedural interpretation, even an extensive interpretation must always be tested against the wording of the arbitration clause, in its widest possible meaning.28

20.20  The Austrian Supreme Court generally takes a wide and thus arbitration-friendly approach to the scope of an arbitration clause. For example, the Supreme Court has confirmed that an arbitration clause includes tort claims, provided that the circumstance on which the tort claim is based would also constitute a breach of the contract (double qualification test).29 Also, ancillary agreements may fall within the scope of an arbitration clause, if these are intrinsically connected to the main agreement.30

20.21  Austrian law recognizes the separability doctrine31 even though the ACCP does not expressly refer to it.32 The Austrian Supreme Court has repeatedly held that the validity of an arbitration agreement must be examined independently of the underlying contract.33

20.2.3  Substantive requirements of arbitration agreements

20.22  For the substantive validity of an arbitration agreement, both the parties and the relationship out of which the dispute may arise must be sufficiently defined and the agreement must (p. 520) include a submission to arbitration.34 Under Austrian law, non-specific or uncertain terms in arbitration agreements are considered void, whereas the agreement itself is void only if the entire agreement is non-specific or uncertain.35 A general clause stating that ‘all disputes that may arise between two parties for any reason shall be submitted to arbitration’ is not sufficiently specific and would render the agreement void.36

20.23  In addition, Austrian arbitration law is not strictly limited to arbitration clauses in bilateral contracts, but also recognizes arbitration clauses in other legal instruments. Section 581(2) ACCP, for instance, confirms the validity of arbitration clauses in such documents as testamentary dispositions, documents establishing a private foundation, or articles of association.

20.24  Unlike in certain other jurisdictions, including Germany,37 under Austrian law there is no need to enter into a specific arbitration agreement for shareholder disputes.38 However, it is generally necessary to include all shareholders (a) in the arbitration agreement, and (b) in the proceedings if the award may have an effect on other shareholders. Such inclusion in the proceedings should comprise notification of the commencement of the arbitration proceedings, participation in the formation of the arbitral tribunal, and participation in the proceedings as a party.

20.2.4  Form requirements of arbitration agreements

20.25  Formal requirements, especially the ‘in writing’ requirement, must not be overlooked. While the Austrian Supreme Court is generally regarded as arbitration friendly, Austrian courts are more likely to set aside arbitral awards for violation of form requirements than for any other reason.39

20.26  Under the old ACCP, it was undisputed that Austrian law requirements of form would apply to all arbitration agreements—with no choice of law option for the parties—if the award was to be rendered in Austria. Presumably, this would include international arbitrations seated in Austria.40 The 2006 amendment of the arbitration law brought no change41 and unfortunately there is still controversy in international cases about whether ACCP provisions mandate the form requirements, or whether Article II of the New York Convention, which is also part of Austrian law, should apply instead.42

(p. 521) 20.27  The content of the writing requirement differs under the old and new ACCP. For arbitration agreements concluded before 1 July 2006, section 577(3) of the old ACCP required the arbitration agreement to be ‘in writing or be contained in telegrams,43 telexes or in electronic representations exchanged by parties’. Handwritten signatures were not required. The indication of the name of the party to the contract in an email was sufficient to satisfy the writing requirement.44

20.28  In the new ACCP, the formal requirements for the conclusion of an arbitration agreement have been modified and are more liberal. Section 583(1) ACCP stipulates two alternatives for the valid conclusion of an arbitration agreement: that it be contained either in a ‘document signed by the parties’ or ‘in letters, faxes, e-mails, or other forms of communication exchanged between them that provide proof of the existence of the agreement’.45

20.29  Section 583(2) ACCP further clarifies that an agreement that fulfils the form requirements of section 583(1) and refers to a document containing an arbitration agreement is equally valid; physical attachment of the arbitration agreement to the signed document is therefore not necessary as long as the separate document is made ‘part of the contract’. It must be stressed that section 583 does not establish an evidentiary rule and the ‘in writing’ requirement can be proven by any available legal means, including oral testimony.46

20.30  It is generally held that the acceptance of an offer to conclude an arbitration agreement must also be made in writing and an oral acceptance is not sufficient.47 Also, the invalidity of the arbitration agreement cannot be cured by reliance on principles of good faith, subsequent external facts (Vertrauen auf den äußeren Tatbestand) or ‘implied power of attorney’ (Duldungs- und Anscheinsvollmacht).48 There are, however, several recognized exceptions for when an arbitration agreement may be concluded in a different form, or a defect in the formation of an agreement may be cured. These include assignment,49 failure to challenge jurisdiction immediately at the commencement of the proceedings,50 and venire contra factum (p. 522) proprium.51 In view of the strict writing requirement, Austrian law does not recognize the ‘group of companies’ doctrine, jurisdictional veil piercing, or other legal theories to bind third parties to an arbitration agreement.52

20.31  For arbitration agreements with consumers and in labour matters, strict form (and substantive) requirements apply that practically exclude arbitration in most cases.53 The arbitration agreement must be personally signed, contained in a separate agreement, and accompanied by written legal advice on the consequences of agreeing to arbitration. Most importantly, the arbitration agreement can be concluded only after the dispute has arisen. Whether a person should be deemed a consumer is to be determined in accordance with the Austrian Consumer Protection Act, which contains a very broad definition of ‘consumer’, which also includes shareholders in a corporation, unless they hold a controlling share.54 Labour matters include labour related disputes between employers and employees and among employees, and pension related disputes.

20.2.5  Objections as to formal defects

20.32  An arbitration agreement lacking the formal requirements is considered to be without any legal effect55 and this means that any arbitral tribunal constituted pursuant to it, lacks jurisdiction. However, under section 583(3) ACCP, ‘a defect as to form of the arbitration agreement is cured in the arbitration proceedings by the making of submissions on the subject in dispute, if an objection to the defect is not raised, at the latest, at the same time as such submissions are made’. A party will thus be barred from raising an objection based on formal defects if it fails to do so upon ‘the first entering of an appearance in the case’.56

20.3  Commencing Arbitration

20.33  On the one hand, section 578 ACCP limits the powers of state courts in connection with arbitrations to those matters explicitly stated in the law. On the other hand, a number of provisions in the ACCP oblige courts to support arbitration. One important area of court support concerns the commencement of arbitration.

20.3.1  The role of courts in appointing arbitrators

20.34  According to section 587(1) ACCP, the parties are free to agree on the procedure to appoint the arbitrator or arbitrators. The role of the courts57 in the selection process depends on (p. 523) whether the parties have chosen a procedure. If they have done so, by agreeing that institutional rules should govern their proceedings, this procedure will take priority. For example, pursuant to article 20 of the Vienna Rules, the Board of the VIAC will make the appointment when the parties fail to nominate an arbitrator.58 In the event the procedure fails (eg the institution does not make a timely appointment), section 587(3) ACCP will apply as a fallback provision. According to section 587(3), any party may apply to the court59 for the appointment of arbitrators—unless the agreement on the appointment procedure provides another means for securing the appointment—if (a) a party fails to act as required under such procedure, or (b) the parties or the arbitrators are unable to reach an agreement in accordance with such procedure, or (c) a third party (eg an institution) fails to perform any function entrusted to it under such procedure within three months of receipt of a written notice.

20.35  In the event the parties have not chosen an appointment procedure, section 587 ACCP provides recourse to default rules and court support, unless agreement can be reached within four weeks:

  • •  In arbitrations in which the parties have agreed on a sole arbitrator, the arbitrator shall, at the request of a party, be appointed by the Regional Court, if the parties have been unable to agree on the arbitrator within four weeks of receipt of a written request to do so from one party to the other party.

  • •  In arbitrations with three arbitrators, each party nominates one arbitrator.60 These two appoint the third arbitrator, who acts as presiding arbitrator. If the tribunal consists of more than three arbitrators, each party nominates the same number of arbitrators, and the party-appointed arbitrators appoint an additional arbitrator, who acts as presiding arbitrator.61 If a party has failed to appoint an arbitrator within four weeks of receipt of a written request from the other party to do so, or if the parties are not notified of the appointment of the arbitrator to be appointed by the party-appointed arbitrators within four weeks of their appointment, the appointment will, at the request of a party, be made by the Regional Court.

  • •  In multi-party arbitrations, the parties on each side must agree on a common arbitrator within four weeks. If the parties fail to agree, the Regional Court will appoint the arbitrator. If one side fails to agree, the arbitrator already appointed by the other side will not be removed.62 Austrian law thus does not follow the Dutco approach, which requires that the entire tribunal be newly appointed if one side has failed to appoint an arbitrator.63 The Austrian solution is considered to be a compromise between the right of a party to appoint (p. 524) its arbitrator and the need for efficient proceedings. The Vienna Rules apply the same principle.64

  • •  Under a catch-all provision, an arbitrator can also be appointed by the Regional Court upon the application of a party if the appointment procedure cannot be completed for other reasons within four weeks after receipt of the written notification of a party to the other party, or if the agreed procedure will not result in an appointment within a reasonable period of time.65

20.36  The request by a party to another party to appoint an arbitrator must specify the claim asserted in arbitration and the basis for the arbitration agreement.66 Otherwise, it will not trigger the four-week deadline.67 Austrian law has not implemented Article 11(1) of the UNCITRAL Model Law, according to which an arbitrator must not be excluded from the office solely on the grounds of his or her nationality, since this principle is already well established under Austrian law and needs no specific mention.68 However, the court, when appointing an arbitrator, must give due regard to any qualifications required of the arbitrator by the agreement of the parties (which could include nationality) and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator. Sitting Austrian judges are disqualified from serving as arbitrators.69 There is no appeal permitted against the court decision. If the party appointment takes place prior to the first instance court decision, and one party furnishes evidence thereof, the party appointment prevails and the court application must be dismissed.70

20.3.2  The role of courts in resolving jurisdictional questions

20.37  The arbitral tribunal has the authority to decide on its own jurisdiction (Kompetenz-Kompetenz principle).71 The tribunal’s decision on jurisdiction must be rendered in the form of an arbitral award.72 A jurisdictional award is subject to court review (regardless of whether jurisdiction is affirmed or denied) and can thus be challenged under section 611 ACCP, either because ‘a valid arbitration agreement does not exist’ or ‘the arbitral tribunal denies its jurisdiction despite the existence of a valid arbitration agreement’.73 It is within the discretion of (p. 525) the arbitral tribunal to continue or stay the arbitration proceedings while the jurisdictional challenge is pending. In practice, the tribunal will generally continue in order to avoid delaying the arbitration. If the court then denies the jurisdiction of the tribunal, the proceedings will be considered terminated and any resulting award invalid and subject to challenge pursuant to section 611 ACCP.74

20.3.3  The arbitration agreement as a bar to court proceedings

20.38  Under section 584 ACCP the institution first seised (arbitral tribunal or court) will have the power to decide on its jurisdiction (Kompetenz-Kompetenz). This rule also applies if the seat of an arbitral tribunal is outside Austria or not yet determined.75

20.39  Hence, if arbitral proceedings are commenced first, even if the arbitral tribunal has not decided on its jurisdiction, as a general rule the mere lis pendens will prevent the assertion of a parallel court claim. If a dispute that is subject to an arbitration agreement is brought before the court, the court may decline to hear the matter at the respondent’s request or even ex officio.76 When declining to hear the matter, the state court will dismiss the case on procedural grounds for lack of jurisdiction.77

20.40  In certain cases the state court must nevertheless assume jurisdiction:

  • •  if a timely objection to the jurisdiction of the arbitral tribunal is raised and the arbitral tribunal is unable to decide on its jurisdiction within a reasonable time;78

  • •  if the respondent participates in the litigation without objecting to the court’s jurisdiction;79

  • •  if the arbitral tribunal had denied jurisdiction—pursuant to section 584(2) ACCP, the court may not, in such a case, dismiss an action on the grounds that an arbitral tribunal would in fact be competent to hear the matter.

20.41  A state court may, however, even in the case of an objection, agree to hear a matter if it determines that the arbitration agreement is null and void, inoperative, or incapable of being performed.80 An arbitration agreement has been held to be incapable of being performed in situations in which the arbitral tribunal itself declined jurisdiction, the institution had been dissolved without any replacement, the institution refused to administer the proceedings, an expressly agreed arbitrator was unable to perform the function, and when one of the parties had become poverty-stricken.81 Generally, the Austrian Supreme Court has adopted an arbitration-friendly stance; holding in a recent case in which the arbitration institution provided for in an arbitration agreement entered into almost 125 years ago no longer existed, (p. 526) that the arbitration agreement will be considered incapable of being performed only if it was impossible to re-model a comparable institution.82 The arbitration agreement was found to be inoperative in cases where arbitration would not have been able to provide an effective remedy. Other examples were cases in which a party relied in bad faith on an arbitration agreement, or in which effective legal protection could otherwise have been endangered (eg for lack of enforceability).83

20.42  When an action is dismissed by a court because of the jurisdiction of an arbitral tribunal, or an arbitral tribunal declines jurisdiction and defers to a court or another arbitral tribunal, or when an arbitral award is set aside on grounds of lack of jurisdiction of the arbitral tribunal, the other proceedings will be deemed to be properly continued if the action is brought without delay before the competent court or arbitral tribunal. A party, who has at an earlier stage in the proceedings, relied upon the existence of an arbitration agreement may not at a later stage claim that it does not exist unless the relevant circumstances have changed.

20.43  It is uncertain under Austrian law whether a declaratory claim to determine the existence or non-existence of an arbitration agreement may be asserted.84

20.3.4  The role of courts in enjoining arbitration

20.44  In Austria, anti-suit injunctions are generally not recognized. It is thus held to be inadmissible to request a court to enjoin a party from proceeding with an arbitration or litigation in a foreign jurisdiction. However, in general, Austrian law gives arbitration priority over court proceedings and thus requires that courts decline to hear a claim which is already pending before an arbitral tribunal (see the preceding section). Conversely, the lis pendens of previously commenced court proceedings will not prevent the institution of arbitral proceedings.

20.3.5  Interim measures

20.45  Austrian courts are explicitly authorized by law to issue interim or protective measures with respect to arbitration proceedings. Section 585 ACCP provides, in that respect, that the existence of an arbitration agreement neither prevents a party from seeking an interim or protective measure from a court, nor prevents a court from granting such relief. Article 33(5) of the Vienna Rules also expressly authorizes the parties to apply to a domestic court or any other competent authority for interim measures of protection.

20.46  A party may seek relief in all phases of the arbitration proceedings (ie before commencement, during the entire course of the proceedings, and even after the arbitral tribunal closes the proceedings), provided that it is not yet possible to seek enforcement of the arbitral award. Austrian law thereby recognizes the following general reasons: first, the likelihood that the enforcement of the final award will be endangered or significantly aggravated; second, the concern that satisfaction of the claim will be endangered or significantly aggravated; and third, the prevention of force or the avoidance of irreparable harm. The general principle that the preliminary measure must not anticipate the final decision does not apply for the third scenario. The reasons stipulated by law can be used to rely on a wide scope of categories under which preliminary relief may be sought, most importantly to protect the enforcement of the award, to preserve the status quo, to prevent irreparable harm, and to preserve evidence.

(p. 527) 20.47  The possibility of reversing the effects of an authorized provisional remedy has become a general rule. In principle, the court should only order measures that would permit a return to the original status quo if the claim ultimately fails on the merits. However, it can also be argued that measures that can be reversed by means of financial compensation should be permitted. Consequently, in cases where both parties may suffer irreparable harm, the court will need to weigh the interests and only grant a provisional remedy if the potential harm suffered by the party seeking the measure significantly outweighs the harm to the counterparty. In practice, Austrian courts have adopted such a weighing approach and, for example, approved preliminary injunctions enjoining a party from engaging in competitive activities, prohibiting shareholder voting, and provisionally permitting a team player to participate in a competition.

20.48  Article 33(1) of the Vienna Rules generally echoes the situation under the ACCP. An interim measure may only be granted at the request of a party after hearing the opposing party. The arbitral tribunal must consider such measure necessary in respect of the subject matter of the dispute. A measure may be deemed necessary if the enforcement of the claim would be frustrated or considerably impeded, or there is a danger of irreparable harm. Measures are to be ordered in writing and a signed copy is to be served on each party.

20.49  It should be noted that under section 394 Austrian Exekutionsordnung (Enforcement Act), EO, the respondent has the right to claim damages if the interim measure proves unjustified. However, section 593(5) ACCP states that the domestic court enforcing an order of an arbitral tribunal may not decide on the damage claim of section 394 EO. The ACCP does not specifically clarify whether the domestic court or the arbitral tribunal is competent to decide on the damage claims. This will need to be assessed under general rules, including the scope of the arbitration clause.85

20.4  During the Arbitration

20.4.1  The role of courts in deciding challenges to arbitrators

20.50  The procedure for challenging arbitrators is regulated by section 589 ACCP, which follows a three-step procedure.

  • •  First, the challenge may be resolved if the challenged arbitrator resigns or is removed from office by mutual agreement of the parties.86

  • •  Second, the parties are free to agree on a challenge procedure.87 If the parties have not agreed on a specific procedure or if the applicable rules do not specify a different procedure, the challenge must be filed in writing with the arbitral tribunal within four weeks after composition of the arbitral tribunal, or when a party becomes aware of the grounds for a challenge. The arbitral tribunal will then decide on the challenge. The challenged arbitrator is entitled to participate in the decision, except when he himself has raised (p. 528) concerns as to his impartiality and independence, and requested a decision on that issue.88 This does not, of course, apply in the case of a sole arbitrator.89

  • •  Third, if the challenge is rejected, the challenging party may request a court to decide on the challenge.90 The challenge request to the court must be made within four weeks after notice of the decision rejecting the challenge. This period may not be modified by party agreement.91 The decision of the court is not appealable.

20.51  The challenge decision is rendered by the Austrian Supreme Court and is not appealable.92

20.52  If the court decides that the challenge is not justified, the issue of the arbitrator’s lack of impartiality and independence cannot be raised later as a basis to set aside the award.93 Only if the grounds for challenge became apparent after the end of the arbitration proceedings can a party make a set-aside claim under section 611 ACCP.94

20.53  A lack of independence that a party learns about only after the conclusion of the arbitral proceeding can be challenged on the grounds of section 611 ACCP. However, it is not possible to set aside an award under this provision if the four-week period pursuant to section 589 ACCP has expired. The same applies if the tribunal has denied the challenge before and the parties did not refer the matter to the court according to section 589 ACCP.95

20.54  This can lead to three different situations for the domestic court: (a) the arbitral tribunal stays its proceedings and waits for the challenge to be decided by the domestic court; (b) the court renders its decision before the arbitral tribunal renders an award; or (c) the arbitral tribunal renders an award before the domestic court decides on the challenge. In any case, if the court does not grant the challenge, the existence of a ground for challenge may no longer be relied upon in a setting-aside proceeding pursuant to section 611 ACCP. If, however, the domestic court grants the challenge after an arbitral award has been rendered, this award can be attacked pursuant to section 611(2)(4) ACCP.

20.55  When deciding on a challenge, the requirements under section 588 ACCP need to be considered. Under that provision, an arbitrator is obliged to disclose all circumstances that may give rise to doubts as to his impartiality and independence or that contradict the parties’ agreement. This disclosure obligation is ongoing and also arises if such circumstances only become apparent during the course of the proceedings. Unless otherwise agreed, a party may not challenge an arbitrator it has appointed, unless the challenge is based on circumstances the party became aware of only after the appointment.

(p. 529) 20.56  There is extensive Austrian case law on the issue of impartiality and independence. Most of these cases are in connection with judges rather than arbitrators, and the situation is not necessarily comparable. The IBA Guidelines on Conflicts of Interest96 are regularly cited in connection with challenge requests. Courts have considered these but seldom relied (solely) on the guidelines in their decisions.97

20.4.2  The role of courts in compelling testimony/evidence

20.57  In general, the parties to the arbitral proceeding are free to agree on how witness testimony should be presented. In the absence of such agreement, the arbitral tribunal has discretion to determine the procedure. Written witness statements and subsequent cross-examination are frequently used in this regard. Witnesses are usually questioned not only by counsel but also by the arbitrators. The parties may agree on a set of rules that regulate testimony and evidence. In practice, the IBA Rules on Evidence are often applied as guidelines.98

20.58  In order to ensure an effective arbitral process, the interference of state courts is reduced to a minimum. This principle is reflected in section 578 ACCP: ‘The court may only act in matters governed by this chapter if so provided in this chapter.’ Therefore, only in a few instances are the courts allowed to intervene in arbitral proceedings, and such cases must always be subject to a specific statutory basis in Austrian arbitration law.99 One of these exceptions is contained in section 602 ACCP, according to which either an arbitral tribunal, or a party with the consent of the arbitral tribunal, may seek the assistance of courts for measures that fall outside the powers of the arbitral tribunal.

20.59  One such measure is the administration of an oath. This task is considered part of the sovereign powers attributed to the state.100 Giving false testimony under oath before a state court is an independent criminal offence subject to six months’ to five years’ imprisonment.101 Also, since the arbitral tribunal has no power to force a witness to testify, it may request assistance from a state court in that respect. The state court could then impose sanctions to force witness testimony.102 When such a judicial examination is conducted, the arbitral tribunal (in full or represented by individual members of the tribunal) and the parties are entitled to be present and ask questions.103

20.60  The arbitral tribunal may also seek the assistance of Austrian and foreign authorities in connection with the taking of evidence, for example summoning witnesses or ordering document production. Likewise, Austrian courts are obliged under section 602 ACCP to assist foreign tribunals in these areas. If such a request comes via a foreign court, regardless of its (p. 530) location, section 38(2) (2) of the Austrian Jurisdiction Act obliges Austrian courts to provide support, except where the request is incompatible with principles of Austrian law.

20.61  It is generally held that an arbitral tribunal does not have the right to refer a specific issue to the European Court of Justice for a preliminary ruling.104 This is unfortunate, since an incorrect application of European law by the arbitral tribunal could lead to the subsequent setting aside of its arbitral award.

20.4.3  Restrictions/requirements regarding the ability of foreign practitioners to appear in an arbitration as counsel or arbitrators

20.62  Austrian arbitration law does not contain any limitations on foreign practitioners appearing in arbitrations as representatives, advisers, or arbitrators. Section 594(3) ACCP specifically stipulates that: ‘The parties may be represented or advised by persons of their choosing.’ This right cannot be excluded or limited. Likewise, article 13 of the Vienna Rules provides that: ‘The parties shall have the right to be represented or advised by persons of their choice in the proceedings before the sole arbitrator (arbitral tribunal).’

20.63  Consequently, there is no need for a party to use an attorney as its representative. It can also be represented or advised by any other person, for example, a civil law notary105 or a non-lawyer.106 In practice, foreign counsel regularly appear in international arbitrations conducted in Austria.

20.64  Likewise, there are no limitations under Austrian law as to the nationality of the arbitrators. Austrian law has not implemented Article 11(1) of the Model Law, according to which no arbitrator must be excluded from the office solely on the grounds of his or her nationality, because this principle is already established in Austrian law.

20.65  Of course, foreigners may need a visa to enter Austria; a visa to enter any EU Member State including Switzerland (Uniform Schengen Visa) will generally also permit entry to Austria.107 Finally, foreign advisers may be subject to local rules, for example European attorneys acting in arbitrations in Austria will be subject to the Austrian Bar Rules.108

20.4.3  Confidentiality

20.66  Austrian arbitration law does not contain a general provision on the confidentiality obligations of arbitrators. However, under Austrian contract law, arbitrators are subject to a strict duty of confidentiality derived from the general contractual duty of care. According to article (p. 531) 16(2) of the Vienna Rules, the arbitrators are ‘bound to secrecy in respect of all matters coming to their notice in the course of their duties’. In addition, article 2(4) of the Vienna Rules provides that the members of the Board of VIAC are ‘bound to secrecy on all matters coming to their notice in the course of their duties’. The same applies to the Secretary General of VIAC (Vienna Rules, art 4(4)).

20.67  Pursuant to article 30(4) of the Vienna Rules: ‘Hearings shall be private.’ This is one of the very few cases where the Vienna Rules limit the wide discretion of the arbitrator(s) to conduct hearings.

20.68  Neither Austrian law, nor the Vienna Rules, impose any express confidentiality obligations on the parties. It is generally understood that an implied confidentiality obligation is imposed.109 However, there is no case law confirming that position. Therefore, if confidentiality of the parties is a concern, it should be specifically addressed in the arbitration agreement.

20.69  Under section 616(2) ACCP at the request of a party demonstrating a legitimate interest, the public may be excluded from court proceedings connected to arbitrations. This unique provision of Austrian law grants the parties the opportunity to protect the confidentiality of the arbitration also in connected court proceedings. However, the mere fact that the matter relates to arbitration will not suffice to exclude the public. Instead, additional arguments such as an express confidentiality agreement or the concern of a detriment to one of the parties in case of a public hearing, must be advanced. Irrespective of the exclusion of the public, as a general rule under Austrian law, state court decisions will only be published in anonymous and redacted format.

20.4.4  Local requirements for the conduct of arbitration hearings

20.70  Generally, the parties are free to agree on the rules of procedure, subject to a few mandatory provisions of Austrian Arbitration law. The following provisions are considered mandatory: (1) the principle of fair and equal treatment of the parties;110 (2) the obligation to grant each party the right to be heard,111 and (3) the right of each party to be represented and advised by counsel of its choice.112

20.71  The ACCP does not provide for a default award if a party fails to participate in the proceedings. The ACCP does not impose a requirement for an oral hearing with or without the participation of all of the parties. By contrast, the Vienna Rules stipulate in article 28 the framework for an arbitral proceeding including an oral hearing. If one of the parties does not appear at a hearing, even though it has been summoned, the tribunal may not automatically accept the arguments of the party in attendance. Rather, article 29(2) of the Vienna Rules states that if a party fails to participate, the arbitral tribunal must nevertheless proceed with the arbitration.113

(p. 532) 20.72  Austrian arbitration law does not contain any language regulations. While under article 5 of the Vienna Rules, the parties’ correspondence with the Board and Secretary General must be in English or German, there are no limitations under the Vienna Rules on the language of the proceedings. Unless there is an explicit agreement, the arbitrators will determine the language under article 26 of the Vienna Rules, taking into consideration the languages of the parties and their counsel.114

20.5  The Award

20.5.1  Mandatory rules as to form

20.73  According to section 606(1) ACCP, the formal requirements for an award are that the award has to be made in written form and must be signed.115 In principle, the arbitral award must be signed by all arbitrators. However, unless otherwise agreed by the parties, the signature of the majority of members of the arbitral tribunal is sufficient, where one or more arbitrators are unable or refuse to sign the award.116 These two requirements may not be waived. An award that does not meet these requirements is called a ‘non-award’117 in Austria, and is subject to a set-aside claim under section 611 ACCP as it fails to satisfy the minimum standards of an award, or subject to a declaratory judgment qualifying it as a non-award under section 612 ACCP.

20.74  Unless otherwise agreed among the parties, the award must include the reasons upon which it is based.118 However, the parties may also exclude this obligation implicitly and at any time, even after the award is rendered, without any specific formal requirement. As a consequence, the parties may also agree that failure to state reasons will not constitute grounds to have the award set aside.119

20.75  The award must indicate the date and place it was rendered.120 This provision corresponds to Article 31(3) of the Model Law, which provides that the award is deemed to have been made at the place of arbitration. Section 606(3) ACCP extends this to the date of the arbitral award,121 which is therefore deemed to have been issued on the date stated.122 According to the Austrian Supreme Court, the lack of a date does not constitute a ground for setting aside an award, as it is not found in the exhaustive list of grounds set forth in section 611 ACCP. This clearly establishes that the date is not an essential element of the award.

20.76  The same standard applies to the indication of the seat. Thus, the specification of the seat has only declaratory effect, since the seat of the arbitral tribunal is determined in accordance (p. 533) with section 595 ACCP. The seat of an arbitral tribunal is a fiction and not necessarily the place where hearings or deliberations actually take place.123 However, the seat is important in order to determine the law applicable to the arbitral proceedings and the ‘nationality’ of the award, which are relevant for determining where the award can be challenged and what requirements must be satisfied to enforce it.124 If the parties have not agreed on the seat of the arbitration, the seat will be determined by the arbitral tribunal.

20.77  After the award is issued, an original signed by the arbitrator must be delivered to each party.125 In domestic cases, this requirement is generally satisfied by using registered mail with a return receipt; in international cases by international courier service. An arbitral award may also be delivered via email, provided that the requirements for a secure electronic signature (section 2(3) of the Austrian Signature Act) are complied with. Nevertheless, it is certainly recommended and preferable to deliver to the parties, signed hard copies of the award, as this is also required in various jurisdictions for the purposes of recognition and enforcement of the award. The date of service of the arbitral award is significant for various time limits, particularly for a request for correction and interpretation of the award or for an additional award pursuant to section 610(1) ACCP, and for the challenge of an award according to section 611(4) ACCP.

20.78  Section 606(5) ACCP states that the award and the documentation of service are ‘joint documents’ of the parties and the arbitrators. This provision must be seen within the context of proceedings before Austrian domestic courts in accordance with section 304(1) and (3) ACCP. This provision stipulates that a party holding a joint document cannot refuse a disclosure request to provide the court with this document if the other party requires it. Thus, in arbitral proceedings, a party may request the production of the arbitral award or documents regarding service from either the opposing party or the arbitrators.126 The arbitral tribunal may discuss with the parties the safekeeping of the award and documentation of its services. Therefore, it is the parties’ and the tribunal’s responsibility to determine whether, and how, the original of the award and the documentation of its service will be stored.

20.79  Under section 606(6) ACCP, the presiding arbitrator must confirm the legal effect and enforceability of the arbitral award in writing. This provision might seem unusual, since the Model Law does not provide for such a confirmation. The historic root of this Austrian peculiarity is that arbitral awards are directly enforceable. The failure to provide a confirmation does not constitute a ground for setting aside the award. In proceedings under the Vienna Rules, the confirmation is provided by VIAC.

20.80  According to section 1(16) of the Austrian Enforcement Act, a domestic arbitral award constitutes an executory title in itself. Thus, if an arbitral award has been provided with a confirmation of legal effect and enforceability, it is enforceable per se in Austria, without the need of any further measures (exequatur).127 However, section 606 ACCP is not applicable to a foreign award, which is defined as an award rendered by an arbitral tribunal with a seat outside Austria and must first be recognized in Austria. Article 36 of the Vienna Rules contains specific rules for awards that closely follow those of section 606 ACCP.

(p. 534) 20.81  It is generally held that an arbitral award should follow certain basic rules for court judgments of state courts. These rules are set forth in section 417(1) ACCP and require at the minimum the names of the members of the arbitral tribunal, the names of the parties (and of any other interested parties involved in the case), and the operative part (decision on the claims).128 Furthermore, an award must clearly state the specific obligations a party is ordered to perform.129 While the failure to include these elements may not necessarily give rise to an annulment it could certainly affect the enforceability.

20.5.2  Mandatory rules as to substance

20.82  Generally, the arbitral tribunal will award interest in accordance with the law applicable to the substance of the dispute. Austrian law does not differentiate between pre-award and post-award interest. Unless otherwise agreed, a creditor may claim compound interest as of the date of filing a claim. Statutory interest in Austria is 4 per cent above the base rate. The statutory rate applies in the absence of a specific agreement between the parties.130

20.83  Which party must bear the costs of the arbitral proceedings is generally determined by the arbitral tribunal under applicable law. The arbitral tribunal must take into account the circumstances of the case, and particularly the outcome of the proceedings. The arbitral tribunal must also assess the amount of any compensation. In this regard, the possibility of any set-off between the parties is also taken into consideration.131 Austrian law, if applicable, would generally use a ‘loser pays’ rule, whereby the relationship of the parties’ respective prevailing and losing claims will be netted. For example, if a claimant makes a claim of 100 but the tribunal awards only 80, the claimant will obtain 60 per cent of its costs. If only 40 were awarded to the claimant, the respondent would be entitled to reimbursement of 20 per cent of its costs.132

20.6  After the Award

20.6.1  Available remedies

20.84  Austrian law has three distinct remedies after the issuance of an arbitral award:

  • •  a request to the arbitral tribunal for correction, interpretation, or amendment of the award (section 610 ACCP);

  • •  a claim for setting aside the award (section 611 ACCP); and

  • •  a claim for a declaratory judgment determining the existence or non-existence of an arbitral award (section 612 ACCP)—which is an Austrian peculiarity.

20.85  Unless otherwise agreed between the parties, there are no further possibilities of seeking legal remedies in Austria such as appeals, appeals on points of law, declaratory actions133 against (p. 535) arbitral awards,134 or decisions on preliminary issues135 by an arbitral tribunal that are rendered within the scope of the ACCP.

20.6.2  Request for correction, interpretation, or amendment

20.86  Section 610 ACCP provides that unless otherwise agreed, either party may, within four weeks of receipt of the award, request the arbitral tribunal (a) to correct any errors in computation, any clerical or typographical errors, or any errors of a similar nature; (b) to explain certain parts of the award;136 or (c) to amend the award by rendering an additional award as to claims asserted in the arbitral proceedings but not disposed of in the award. Prior to making a decision upon such a request, the other party must have an opportunity to be heard.137

20.87  This provision applies to interim, partial, and final awards even though they may not be separately challengeable under section 611 ACCP.138 The question of whether the award contains any errors that can be corrected in the sense of section 610 ACCP depends on the extent to which such errors are apparently clerical (eg arithmetical or typographical errors or errors of a similar nature).139

20.88  The arbitral award must be interpreted so as to clarify whether it actually contains an error that requires correction, or whether the arbitral award is inconsistent in itself, which would then reduce the effectiveness of the award or render it ineffective, and might even constitute a ground for annulment.140 Austrian courts do not interpret decisions rendered by arbitral tribunals in the same (subjective) way as they would interpret contracts, but rather in the (objective) way statutes would be interpreted.141

20.6.3  Austrian standards for setting aside/annulment

20.89  Under section 611 ACCP, the parties may file a court action aimed at setting aside an arbitral award within three months after receipt of the award. As a preliminary matter, a party may not bring a setting-aside action unless the arbitral award addresses the merits of the case and makes a final decision, at least in part.142 Thus, in the event of bifurcation, an award dealing with the grounds of the claim (without determining the amount) will generally not be challengeable. Likewise, an award that only addresses costs will not be challengeable.143 As an exception to this rule, jurisdictional decisions are challengeable.144 While the right to challenge an award requires a final decision, the challenge itself can be directed against a part of the decision.

(p. 536) 20.90  Only awards made by tribunals seated in Austria are challengeable.145 The venue stated in the award is deemed to be the seat of the arbitration.146 Foreign arbitral awards are thus not subject to setting aside claims,147 even if a foreign court has determined that Austrian courts have jurisdiction.148 However, defects in foreign arbitral awards may be raised in the course of opposing recognition and enforcement of a foreign award in Austria.

20.91  Section 611(2) ACCP lists the grounds for setting aside an arbitral award. This list is considered exhaustive and mandatory. Therefore the parties cannot agree on other grounds. Moreover, no grounds may be waived by the parties in advance. Of the eight grounds for setting aside, six can be pursued only upon explicit application (which must be contained in the statement of claim requesting annulment). Two grounds (lack of arbitrability and violation of ordre public) may also be considered ex officio.149 Procedural defects will generally not be challengeable unless they were raised immediately in the course of the proceedings.150

20.92  Since the introduction of the Arbitration Act in its (more or less) present form in 1895, the Austrian Supreme court has dealt with close to 200 setting aside cases and only very rarely set aside an arbitral award.151

20.93  The specific setting aside grounds closely follow the Model Law and the New York Convention (in the order of section 611 ACCP):

  • •  Defective arbitration agreement This encompasses (a) the lack of a valid arbitration agreement, (b) the denial of jurisdiction by the arbitral tribunal despite a valid arbitration agreement, or (c) the incapacity of a party to conclude a valid arbitration agreement. On this ground both affirmative and negative jurisdictional decisions may be challenged.152

  • •  Lack of due process This includes (a) cases in which the opportunity to freely appoint an arbitrator has been denied (eg if not all parties participated in the appointment process),153 and (b) violation of the right to be heard, which also comprises the right to challenge an arbitrator, or (c) where an effective defence was impossible for other reasons.154 Despite the broad language, the Austrian Supreme Court has been reluctant155 to set aside awards based on due process arguments.156 The Austrian Supreme Court has accepted challenges (p. 537) on due process grounds in cases in which oral hearings were conducted and the arbitral tribunal did not itself hear the parties, but delegated this function to a third person;157 in which a party was not permitted to respond to another party’s request;158 in which the arbitral tribunal refused to convene an oral hearing despite a party’s request;159 and in which a party could not be represented by its attorney through no fault of its own.160

  • •  Ultra petita161 This ground may be invoked if the arbitral tribunal exceeds its scope of jurisdiction by (a) deciding a dispute not covered by the arbitration agreement, (b) deciding matters that exceed the scope of the arbitration agreement, or (c) granting relief that was not sought by the parties.162 Given the broad interpretation of arbitration agreements, this ground for challenge is rarely successful.

  • •  Defective composition of the arbitral tribunal This ground may be invoked if the composition or constitution of the arbitral tribunal conflicts with mandatory rules or the agreement of the parties. The rule affirms the primacy of party autonomy by putting violations of composition rules stipulated in arbitration agreements on a par with violations of the legal requirements of the ACCP.163 Lack of impartiality and independence may constitute such a ground,164 which can, however, only be raised after termination of the arbitration, since otherwise an immediate challenge must be raised. The effect on the outcome of the arbitration due to an improperly composed arbitral tribunal is not taken into consideration. The right to challenge the award on this ground, however, lapses if a party who has knowledge of the defective composition does not immediately object.165

  • •  Violation of Austrian procedural ordre public Under this ground, violations of the most basic and fundamental procedural protections enshrined in Austrian law can be challenged.166 This provision was newly introduced in 2006 as a supplement and catch-all to the due process ground.167 The precise scope of section 611(2)(2) ACCP is yet to be ascertained in court decisions. In the absence of such Supreme Court decisions, commentators suggest that it may apply to a broad range of potential procedural defects, including denial of the right to be heard;168 incapacity of a party to the proceedings; absence of representation or arbitrator bias;169 and failure to conduct evidentiary proceedings or sole reliance on the assertions of one party without any justification.170

  • •  Fraud This can be asserted as an annulment ground if an arbitral award was obtained by criminal acts, such as fraud, false testimony (but only if the testimony was given in a state court),171 or the forging of particular protected documents.172 The discovery of new facts (p. 538) or evidence is not sufficient. The time period for filing an action to set aside an award on this ground is four weeks after a final criminal judgment confirming the incriminating offence, and in any event expires after ten years.173

  • •  Lack of objective arbitrability Generally, the scope of arbitrability in Austria is very wide: (a) all pecuniary matters are arbitrable and (b) non-pecuniary matters are arbitrable to the extent the parties are capable of concluding a settlement.174 The following three matters are explicitly not arbitrable: claims based on family law, claims based on tenancy protection laws,175 and claims based on condominium ownership laws. Apart from these, matters infringing the sovereign powers of the state (eg in administrative matters) are not arbitrable.176 The Austrian Supreme Court has held that shareholder disputes are arbitrable.177

  • •  Violation of Austrian substantive ordre public The term ‘ordre public’ includes the basic principles of the Austrian Constitution and of criminal, private, and procedural as well as public law.178 The Austrian Supreme Court has been reluctant to set aside arbitral awards for breach of ordre public and has also refused to fully review the underlying arbitral proceedings to assess this. Cases in which awards were set aside on this ground include violations of EU law179 and excessive interest (107% per annum).180

20.6.4  Local procedures for setting aside/annulment

20.94  Under Austrian law, an arbitral award will have the same effect as a final and binding court judgment—independent of the pendency of setting aside proceedings.181 If the setting aside proceedings are successful, of course, the award will lose its legal effect in Austria, though it might nevertheless still be recognized abroad.182

20.95  In the past, setting aside proceedings ran through all three instances of the Austrian court system. This has been criticized because it led to delays.183 The 2013 Arbitration Amendment Act184 now grants the Austrian Supreme Court exclusive jurisdiction to decide all setting aside claims as first and final instance.185

20.96  Austrian court proceedings trigger court fees, which must ultimately be paid by the loser of the proceedings. Court fees for revision by the Supreme Court are 5 per cent of the value in (p. 539) dispute.186 The value of the dispute is generally the pecuniary amount in relation to which annulment is sought; if annulment of a non-pecuniary award is sought the evaluation by the arbitral tribunal will be taken as guideline.

20.97  The question of the admissibility of an action to set aside an award also raises the question of who is entitled to challenge an arbitral award. It is indisputable that the parties to the arbitration are entitled to request the setting aside of ‘their’ arbitral award.187 Under Austrian law, the parties’ place of origin or a connecting factor for the matter in dispute is insignificant, as long as the seat of the arbitration is in Austria.188 If the arbitration proceedings involve a party joined to the dispute, that party must be included in the setting aside proceedings.189 According to the Austrian Supreme Court, a party is entitled to point out defects in the arbitration proceedings only if that party has itself been affected by such a defect.190 A party may thus not base its annulment request on procedural errors only affecting the opposing party. However, there is no need to demonstrate a particular interest in an action for a declaratory judgment. The existence of an arbitral award and the assertion of a reason for setting aside is sufficient to request a declaratory judgment according to section 612 ACCP.191

20.98  As a consequence of the consensual nature of arbitration, without its approval it is impossible to extend the legal effect of an arbitral award to a third party. This applies also to interim measures concerning third parties ordered by an arbitral tribunal.192 As a consequence, third parties, namely persons that were not recognized as parties in the arbitrations (or in respect to whom the arbitral tribunal denied jurisdiction), will generally not be entitled to challenge an arbitral award. A different view may be taken in exceptional circumstances, such as cases of legal succession or when that party may otherwise be affected by the award.193 In addition, provisions such as compulsory joinder are unknown in arbitration proceedings. Also, Austrian law applies a dogmatically clear distinction between the parties to the dispute and other parties involved.194

20.99  Even though in view of these considerations a third party does not appear to be entitled to contest an arbitral award issued between different parties, as a general rule, a third party affected by an arbitral award should be entitled to request set aside if the third party was joined as a party to the arbitration proceeding.195 Consequently, recourse to the setting aside (p. 540) provisions of section 611 ACCP (in contrast to section 610 ACCP governing the correction of clerical errors) is not expressly restricted to the parties to the arbitration proceedings.

20.100  Pursuant to section 611(4) ACCP the period for filing an action for setting aside is generally three months and begins on the date of receipt of the award by the party bringing the action, or of service of the award, as the case may be.196 Service of an ineffective arbitral award is also capable of triggering the three month period.197

20.101  For grounds under section 611(2)(6) ACCP (fraud), the period is four weeks and commences on the date of actual knowledge of the circumstances giving rise to the challenge (section 534 ACCP).

20.7  Conclusion

20.102  Austria is an arbitration-friendly UNCITRAL Model Law jurisdiction with a long and stable history of supporting arbitration. A wealth of decisions by the Austrian Supreme Court and a wealth of legal commentaries offer clear guidelines to the arbitration practitioner and only very few surprises. The Vienna Rules are among the most streamlined sets of modern institutional arbitration rules, that provide substantial flexibility for arbitral proceedings.

Footnotes:

1  The General Court Procedures (Allgemeine Gerichtsordnung) of 1 May 1781, No 13 IGS contains, in §§ 270–274, general norms on the conduct of arbitration, including the writing requirement for arbitration agreements and the possibility for the parties to waive any recourse to arbitral awards, in which case the court may only be addressed in case of apparent fraud.

2  Schiedsrechtsänderungsgesetz 2006 (‘SchiedsRÄG 2006’) BGBl I 2006/7. The 2006 changes generally apply to all arbitration proceedings initiated and arbitration agreements concluded after 1 July 2006. SchiedsRÄG 2006, art VII.

3  See also ACCP, § 614 which expressly states that international treaties prevail over Austrian law.

4  The establishment of arbitral institutions falls within the competence of the Austrian Regional Economic Chambers of Commerce (Wirtschaftskammern) following a model of arbitration rules used by the Board of Directors of the Austrian Federal Chamber of Commerce, Schieds- und Schlichtungsordnung für die ständigen Schiedsgerichte der Wirtschaftskammern, 17 March 1949.

5  See W Melis, ‘Schiedsgerichtsbarkeit der Österreichischen Handelskammern seit 1946’ in Völkerrecht, Recht der internationalen Organisationen, Weltwirtschaftsrecht : Festschrift für Ignaz Seidl-Hohenveldern (1988) 367 with further references; W Melis, ‘Austria’ (1979) IV YB Commercial Arbitration 2.

6  A dispute qualifies as ‘international’ if either not all (at least one of) the parties have their place of business or their residence outside Austria at the time of the conclusion of the arbitration agreement. In addition the Vienna Rules can be explicitly agreed upon by domestic parties for disputes of an international character.

7  Most notably the nine arbitral centres established and administered by the chambers of commerce of each Austrian province. In Vienna that is the Permanent Arbitral Centre of the Vienna Chamber of Commerce (Ständiges Schiedsgericht der Wirtschaftskammer Wien). Another Austrian arbitral centre handling international and domestic disputes is the Court of Arbitration of the Vienna Stock Exchange, dealing with disputes in its capacity as a securities and commodities exchange.

8  Vienna International Arbitration Centre, ‘VIAC STATISTICS 2012’ (March 2013), avaialble at <http://www.viac.eu/en/service/statistics/89-service/statistiken/122-viac-statistics-2012>.

9  Vienna Rules 2013, art 14.

10  Vienna Rules 2013, art 15.

11  See (n 63); Vienna Rules 2013, art 18(4).

12  Vienna Rules 2013, art 44(7).

13  Vienna Rules 2013, art 42(2).

14  Vienna Rules 2013, art 42(4).

15  The new regime under the Arbitration Amendment Act 2013 (SchiedsRÄG 2013) will apply to proceedings commenced after 31 December 2013. (Note: at the time of finalizing this chapter, the Act had been politically approved but not yet ratified by the Austrian Parliament).

16  ACCP, § 615.

17  VIAC—Vienna International Arbitration Centre (n 8).

18  Under the Vienna Rules the seat of arbitration can also be outside Austria.

19  For some examples of ‘misconduct’ see V Khvalei, ‘Guerilla Tactics in International Arbitration, Russian View’ in C Klausegger et al (eds), Austrian Yearbook on International Arbitration 2011 (Manz’sche Verlags- und Universitätsbuchhandlung, 2011) 335. The corruption of the legal system in a number of Eastern European countries is a frequent topic of debate.

20  PJ Pettibone, ‘The Nonarbitrability of Corporate Disputes in Russia’ (2013) 29 Arb Intl 263.

21  G Bárdosi, ‘The Award and the Courts, Hungary: New Rules on Arbitration Related to National Assets’ in C Klausegger et al (eds), Austrian Yearbook on International Arbitration 2013 (Manz’sche Verlags- und Universitätsbuchhandlung 2013) 181.

22  C Bán, ‘Hungary’ in G Wegen and S Wilske (eds), Arbitration in 55 Jurisdictions Worldwide (Getting the Deal Through, 2013) 235; O Filatov and P Byelousov, ‘Ukraine’ in Wegen and Wilske 479.

23  ES Sherby and S Sabzerou, ‘Israel’ in G Wegen and S Wilske (eds), Arbitration in 55 Jurisdictions Worldwide (Getting the Deal Through, 2013) 262; M Rubino-Sammartano, ‘Italy’ in Wegen and Wilske, 270; J El Ahdab and M Eid, ‘Qatar’ in Wegen and Wilske, 366; CI Stoica, D Aragea, and A Buga, ‘Romania’ in Wegen and Wilske, 374.

24  See in this respect the 2009 Elektrim case (BGE 4A 428/2008), in which the Swiss Supreme Court (contrary to a court in an EU Member State in a parallel proceeding) found an arbitration clause to be invalidated by insolvency proceedings. G Nater-Bass and O Mosimann, ‘Effects of Foreign Bankruptcy on International Arbitration’ in C Klausegger et al (eds), Austrian Yearbook on International Arbitration 2011 (Manz’sche Verlags- und Universitätsbuchhandlung, 2011) 163.

25  See in that respect the much debated case in which French and UK courts arrived at contradicting decisions. A Malek and C Harris, ‘A pilgrimage to Paris: Dallah v. Pakistan’ in J El Ahdab (ed) (2010) 2(4) Intl J of Arab Arb 22; see also Dallah Real Estate & Tourism Holding Co v Ministry of Religious Affairs, Government of Pakistan [2010] UKSC 46; J Grierson and M Taok, ‘Comment on Dallah v. Pakistan’ (2009) 26(3) J Intl Arb 467; N Pengelley, ‘Pyramids and Pilgrimages: An Arbitration Agreement with a State-Created Entity is Not an Arbitration Agreement with a State’ (2009) 13(2) Vindobona J Intl Commercial Arb 293, 306.

26  Arbitration Act 1996, s 69.

27  As a consequence of the separability of the arbitration agreement, the law governing the arbitration agreement must be examined independently of the law of the underlying contract. While a choice of law for the main contract may imply also a choice of law for the arbitration agreement, this will generally not be the case if the parties have explicitly chosen a seat in another country; see also C Hausmaninger, ‘§§ 577 bis 618 ZPO’ in H Fasching and A Konecny (eds), Kommentar zu den Zivilprozessgesetzen (2nd edn, Manzsche Verlags- und Universitätsbuchhandlung 2007) Vol 4, pt 2, § 581, para 276; G Zeiler, Schiedsverfahren: ss 677-618 ZPO idf SchiedsRÄG 2006 (2nd edn, Neuer Wissenschaftlicher Verlag, 2006) § 581, paras 125ff; A Fremuth-Wolf, ‘Section 581’ in S Riegler et al (eds), Arbitration Law of Austria: Practice and Procedure (Juris Publishing, 2007) § 577, paras 67–68.

28  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 581, para 225.

29  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 581, para 230; J-P Lachmann, Klippen für die Schiedsvereinbarung (SchiedsVZ, 2003) 29; W Voit, in H-J Musielak, Kommentar ZPO § 1029, para 23.

30  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 581, para 242.

31  Model Law, Art 16(1)

32  W Rechberger and W Melis, in W Rechberger (ed), Kommentar zur ZPO (3rd edn, Springer-Verlag, 2006) § 577, para 16.

33  OGH 17 April 1996, 7 Ob 2097/96 z; OGH 6 September 1990, 6 Ob 572/90; OGH 18 April 1985, 7 Ob 551/85; OGH 10 October 1962, 1 Ob 215/62; OGH June 16 1982, 1 Ob 628/82.

34  H Fasching, Schiedsgericht und Schiedsverfahren im österreichischen und im internationalen Recht (Manz, 1973) 26.

35  OGH 9 September 1987, 3 Ob 80/87.

36  F Schwarz and C Konrad, The Vienna Rules—A Commentary on International Arbitration in Austria (Kluwer Law International, 2007) 20, para 1-049.

37  See German Supreme Court 29 March 1996, II ZR 124/95—‘Arbitrability I’ and 6 April 2009, II ZR 255/08—‘Arbitrability II’. As a consequence of these two decisions, the German Institute of Arbitration (DIS) had introduced supplementary rules for corporate disputes.

38  OGH 11 November 2011, 3 Ob 191/11a.

39  N Pitkowitz, Die Aufhebung von Schiedssprüchen (Manz, 2008) 152–82; Schwarz and Konrad (n 36) para 1-054.

40  Hausmaninger, in Fasching and Konecny Kommentar (n 27) § 581, para 280: ‘Under the old law it was undisputed that the formal validity is determined by the law in which the arbitral award is made, which is the seat of the tribunal’; referring to OGH 26 April 2006, 7 Ob 236/05i JBl 2006, 726; OGH 17 November 1971, 8 Ob 233/71 JBl 1974, 629.

41  ACCP, § 577 explicitly calls for an application of ACCP, § 583 (the ‘form requirement’) not only in cases in which the seat of the tribunal is in Austria (ACCP, § 577(7)) but also in cases where the seat is outside Austria or not yet determined (ACCP, § 577(2)).

42  OGH 17 November 1971, 8 Ob 233/71; OGH 26 April 2006, 7 Ob 236/05i. In the 1971 decision the Austrian Supreme Court had held that the formal requirements of an arbitration agreement in cases where the recognition and enforcement of an Austrian arbitral award could become subject to the laws of another state, must be assessed according to the provisions of the New York Convention. Austrian scholars had disputed this decision. Walter Rechberger had argued that it was a singular judgment, and that the provisions of the New York Convention aimed at the recognition and enforcement of foreign awards (W Rechberger, in B Bachmann et al (eds), Grenzüberschreitungen—Beiträge zum Internationalen Verfahrensrecht und zur Schiedsgerichtsbarkeit. Festschrift für Peter Schlosser (Mohr Siebeck, 2005) 733). Paul Oberhammer had called it a landmark decision, since the Austrian Supreme Court had been one of the first courts worldwide to declare the provisions of Art II(2) New York Convention applicable even in proceedings that were based on the Austrian Code of Civil Procedure (P Oberhammer, in C Fischer-Czermak et al (eds), Festschrift für Rudolf Welser (Manz, 2004) 759ff). In its 2006 decision, the Supreme Court found its previous decision ‘noteworthy’ (beachtenswert), but fails to take an explicit position as to its future applicability. It finds this issue not to be relevant in the case at hand, since the formal requirements according to the ACCP had been met anyway.

43  See also OGH 12 November 1952, 2 Ob 723/52.

44  C Liebscher and A Schmid, ‘Country Reports—Austria’ in F-B Weigand (ed), Practitioner’s Handbook on International Arbitration (CH Beck, 2002) 542.

45  Schwarz and Konrad (n 36) para 1-064.

46  Schwarz and Konrad (n 36) para 1-069.

47  A Reiner, Das neue österreichische Schiedsrecht/The New Austrian Arbitration Law (LexisNexis, 2006) § 583, para 42; EM Runesson and S Arvmyren, ‘Sweden’ in G Wegen and S Wilske (eds), Arbitration in 55 Jurisdictions Worldwide (Getting the Deal Through, 2013) 434; there is no written form requirement in Sweden.

48  OGH 29 March 2006, 7 Ob 64/06x.

49  A Fremuth-Wolf, Die Schiedsvereinbarung im Zessionsfall (Verlag Österreich, 2004).

50  ACCP, § 583(3).

51  See in particular ACCP, § 584(5): ‘A party that invoked the existence of an arbitration agreement at an earlier stage in the proceedings may not, at a later stage, claim that such agreement does not exist unless the relevant circumstances have changed since.’ (emphasis added).

52  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 581, para 204.

53  See ACCP, §§ 617ff.

54  OGH 24 April 2012, 2 Ob 169/11h.

55  Liebscher and Schmid (n 35) 543 with further references to OGH January 19 1996, 8 Ob 1211/95; OGH 28 February 1991, 6 Ob 507, 508/90; OGH 23 October 1928, 3 Ob 648/28 SZ X/303; OGH 7 February 1933, 3 Ob108/33 SZ XV/29; OGH 27 March 1935, 1Ob 249 ZBl 1935/367, 757; OGH 14 October 1982, 8 Ob 556/82; OGH 26 January 2000, 7Ob 368/98p; OGH 27 February 2001, 1 Ob 273/00d; OGH 17 May 2001, 7 Ob 67/01f; OGH 31 August 1984, 1 Ob 20/84—confirmed in OGH 21 June 2005, 5 Ob 127/05w; OGH 20 October 2005, 2 Ob 235/05f.

56  Schwarz and Konrad (n 36) paras 1-082–1-083.

57  According to ACCP, § 615 the Regional Court either designated in the arbitration agreement or designated under the rules of the Austrian Jurisdiction Act, § 104 is competent for this decision. Alternatively the competence is determined by the venue of the arbitral tribunal.

58  VIAC usually hands down its decision in less than three weeks.

59  ACCP, § 615 (n 57).

60  Pursuant to ACCP, § 586(2) three arbitrators are the default rule unless the parties explicitly agree on another number of arbitrators.

61  Under ACCP, § 586(1), if the parties have agreed on an even number of arbitrators, these must appoint two presiding arbitrators in order to arrive at an uneven total number.

62  ACCP, § 577(2).

63  Decision of the French Cour de Cassation of 7 January 1992 in BKMI Industrieanlagen GmbH et Siemens AG v Dutco Constructions [1992] 21 Cass Civil Ire 75, para 470 which held that ‘the principle of the equality of the parties in the designation of arbitrators is a matter of public policy’. As a direct response to Dutco, the ICC revised art 10 of its rules in 1998 to permit the court to appoint all arbitrators in cases where one side cannot agree on an arbitrator. The LCIA Rules (8.1) even went one step further and were revised to mandate the Court to appoint all arbitrators in cases where the alignment of interests has not been demonstrated. The Vienna Rules chose a different path. Under the Vienna Rules, if the respondents fail to jointly nominate an arbitrator, the VIAC Board makes an appointment. The nomination of the claimant’s side will, however, remain effective (multiple claimants must agree on an arbitrator before proceeding with the arbitration). This solution prevents multiple respondents from sabotaging the claimant’s appointment by simply not nominating an arbitrator jointly. See also R Bevilacqua and T Ugarte: ‘Ensuring Party Equality in the Process of Designating Arbitrators in Multi Party Arbitration. An Update on the Governing Provisions’ (2010) 27 J Intl Arb 1, 9–49.

64  According to the Vienna Rules 2013, arts 18 and 20(3) the VIAC Board is granted the option to remove already appointed arbitrators in an exceptional case or if the arbitrator fails to step back after he has been challenged.

65  ACCP, § 587(6).

66  ACCP, § 587(4).

67  B Kloiber and H Haller, in B Kloiber, Das neue Schiedsrecht: Schiedsrechts-Änderungsgesetz 2006 (ecolex Spezial, Manz, 2006) 26.

68  P Oberhammer, Entwurf eines neuen Schiedsverfahrensrechts (Manz, 2002) 64; Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 587, paras 6ff.

69  Law on the Service of the Judges, § 63(3)(‘Richterdienstgesetz’).

70  ACCP, § 587(7).

71  ACCP, § 592; Vienna Rules, art 24(2) provides that the ‘sole arbitrator (arbitral tribunal) shall rule on its own jurisdiction. The ruling can be made together with the ruling on the case or by separate arbitral award.’

72  J Power, The Austrian Arbitration Act—A Practitioner’s Guide to Sections 577–618 of the Austrian Code of Civil Procedure (Manz, 2006) § 592, para 4.

73  GB Born, International Commercial Arbitration—Commentary and Materials (2nd edn, Kluwer Law International, 2001) 6; Schwarz and Konrad (n 36) para 19-027.

74  Schwarz and Konrad (n 36) para 19-028 with further references.

75  ACCP, § 577(5).

76  A Von Saucken, Die Reform des österreichischen Schiedsverfahrensrechts auf der Basis des UNCITRAL-Modellgesetzes über die internationale Handelsschiedsgerichtsbarkeit: ein Diskussionsbeitrag (Paul Lang, 2004) 99.

77  More precisely the court would be qualifying the existence of an arbitration agreement as an unwaivable lack of jurisdiction pursuant to the Austrian Jurisdiction Act (JN), § 104(3). See Oberhammer (n 68) 195.

78  C Liebscher, The Austrian Arbitration Act 2006: Text and Notes (Kluwer Law International, 2006) annotated text to ACCP, § 584.

79  According to ACCP, § 584(1) the court must not dismiss a claim brought before the court which is subject to the arbitration agreement between the parties or the proceeding if the respondent makes submissions on the substance of the dispute or orally pleads before the court without making an according objection. See also Schwarz and Konrad (n 36) para 1-087; Liebscher (n 68) annotated text to ACCP, § 584(1).

80  Kloiber and Haller (n 67) 22.

81  OGH 11 November 2011, 3 Ob 191/11a.

82  OGH 11 November 2011, 3 Ob 191/11a.

83  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 583, para 56.

84  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 584, para 33.

85  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 593, para 47.

86  Under ACCP, § 589(2) if the other side agrees to the challenge request, the arbitrator will thus be removed even against his will.

87  The parties can, for example, delegate the task to a third party or an institution, agree certain time limits, majority requirements, etc., as long as the parties to the proceedings are treated in a fair way as mandated in ACCP, § 594(2).

88  OGH 18 December 2002, 7 Ob 265/02f; H Fasching, Aktuelle Probleme des Unternehmensrechts: Festschrift Gerhard Frotz zum 65. Geburtstag (Manz, 1993) 775; Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 589, paras 72–74.

89  P Binder, International Commercial Arbitration And Conciliation In UNCITRAL Model Law Jurisdictions (Sweet & Maxwell, 2005) para 3-064.

90  ACCP, §§ 615 and 616 set out which court has jurisdiction in this matter.

91  Power (n 72) § 589, para 6.

92  ACCP, § 615. See n 15. For proceedings commenced before 1 January 2014, the court of first instance will decide.

93  Rechberger and Melis, in Rechberger, Kommentar zur ZPO (n 32) § 590, para 4; Reiner (n 47) § 589, para 85; Power (n 72) § 589, para 7.

94  Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 589, para 38.

95  S Riegler, in S Riegler et al, (eds), Arbitration Law of Austria: Practice and Procedure (Juris Publishing, 2007) § 531.

96  IBA Guidelines on Conflicts of Interest in International Arbitration as approved on 22 May 2004 by the Council of the International Bar Association (the ‘IBA Guidelines’).

97  Most challenge decisions by courts of first instance are unpublished. That statement is based on the author’s personal experience in several challenge proceedings.

98  IBA Rules on the Taking of Evidence in International Arbitration as adopted by a resolution of the IBA Council on 29 May 2010 by the International Bar Association.

99  Schwarz and Konrad (n 36) para 20-251.

100  NA Schoibl, in Bittner et al (eds), Festschrift für Walter H Rechberger (Springer, 2005) 513ff; Hausmaninger, in Fasching and Konecny, Kommentar (n 27) § 602, para 1.

101  Austrian Penal Code, § 288.

102  C Liebscher, ‘Austria’, in F-B Weigand, Practitioner’s Handbook on Commercial Arbitration (OUP, 2009) para 2.127.

103  ACCP, § 602(1).

104  ECJ, 23 March 1998, RsC-102/82 Nordsee; ECJ 1 June 1999, RsC-126/97, Eco Swiss v Benetton; M Schwaiger, ‘Preliminary Ruling According to Article 234 EC Treaty and Arbitral Tribunals’ in C Klausegger et al (eds), Austrian Arbitration Yearbook 2007 (CH Beck, Stampfli & Manz, 2007) 307.

105  ErläuterungenRV SchiedsRÄG 2006, 17.

106  J Lew, L Mistelis, and S Kröll, Comparative International Commercial Arbitration (Kluwer Law International, 2003) 541, para 21.67.

107  For details, see Einreisevoraussetzungen für Österreicher im Ausland (General Information on Visas), available at <http://www.bmeia.gv.at/aussenministerium/buergerservice/pass-und-visum/visainformation-englisch.html>.

108  According to the Austrian Act of EU Attorneys, §§ 4 and 7, foreign lawyers from EC Member States acting in Austria are subject to Austrian professional rules and are under the supervision of the Austrian Bar Association. These provisions provide for the implementation of the European Directive (EWG) 77/249 pursuant to which the provisions of the host country (Austria) are generally only binding to the extent that these do not contradict the rules of the Code of Conduct for European lawyers (CCEL). It is generally held that Austrian bar rules do not conflict with the CCEL.

109  A Fremuth-Wolf, ‘Confidentiality in Arbitration’ in S Riegler et al, Arbitration Law of Austria: Practice and Procedure (Juris Publishing, 2007) 661, 670; V Oehlberger, ‘How Confidential is Arbitration in Austria? A Comparative Analysis’ in C Klausegger, et al (eds), Austrian Yearbook on International Arbitration 2011 (Manzsche Verlags- und Universitätsbuchhandlung, 2011) 65.

110  ACCP, § 594(2).

111  ACCP, § 594(2).

112  ACCP, § 594(3).

113  Schwarz and Konrad (n 36) paras 20-148, and 20-259ff.

114  Schwarz and Konrad (n 36) paras 20-148, 6-003.

115  ACCP, § 606(1).

116  S Riegler, in S Riegler et al (eds), Arbitration Law of Austria: Practice and Procedure (Juris Publishing, 2007) § 606, para 18.

117  H Holtzmann and J Neuhaus, A Guide to the UNICITRAL Model Law on International Commercial Arbitration (Kluwer Law and Taxation, 1989) art 21, 837; M Roth, ‘Country Report—Austria’, in F-B Weigand (ed), Practitioner’s Handbook on International Arbitration (CH Beck, 2002) art 31, para 3.

118  ACCP, § 606(2).

119  P Schlosser, in C Berger, F Stein, and M Jonas, Kommentar zur Zivilprozessordnung (22nd edn, Mohr Siebeck, 2002) § 1054, para 10.

120  ACCP, § 606(3).

121  Von Saucken (n 76) 283.

122  Riegler (n 116) § 606, para 28.

123  Holtzmann and Neuhaus (n 117) art 31 para 839; Reiner (n 47), § 606, para 157.

124  Von Saucken (n 76) 282; Power (n 72) § 606, para 6; Roth (n 117) art 31, para 13.

125  ACCP, § 606(4).

126  Official Comments, § 606; Power (n 72) § 606, para 8.

127  Power (n 72) § 606, para 10.

128  KH Schwab and G Walter, Schiedsgerichtbarkeit (7th edn, Beck, 2005) para 19-9.

129  OGH 18 November 1934, RZ 1935, 39.

130  Austrian General Civil Code, § 1000.

131  C Liebscher, ‘Austria’ in C Liebscher and A Fremuth-Wolf, Arbitration Law and Practice in Central and Eastern Europe (Juris Publishing 2006) AUS-60.

132  The ‘netting’ calculation is as follows: in the first example, the claimant succeeded with a claim of 80 and the respondent with a defence of 20 which—after netting (80 minus 20)—results in a 60% cost reimbursement obligation from the respondent to the claimant. In the second example, the claimant succeeded with a claim of 40 and the respondent with a defence of 60 which—after netting (40 minus 60)—results in a 20% cost reimbursement obligation from the claimant to the respondent.

133  OGH 6 February 1923, OB II/49.

134  This also applies to cases in which it is doubtful whether or not the agreement on which the arbitral award is based actually constitutes an arbitration agreement. OGH 24 September 1981, 7 Ob 623/81.

135  OGH 15 June 1967, 1 Ob 119/67.

136  The Vienna Rules 2006 stated that explanation is only possible if both parties agree to it. This has been removed in the Vienna Rules 2013; Pitkowitz (n 39) paras 478–481.

137  ACCP, § 610, implementing Model Law, art 33.

138  Zeiler (n 27) 274ff.

139  H Schumacher, ‘Ein Schiedsspruch—und was nun?’ (2006) Zeitschrift für Schiedsverfahren 70.

140  W Rechberger, ‘Die Widerspüchlichkeit eines Schiedsspruchs als Aufhebungsgrund nach österreichischem Recht’ (2006) Zeitschrift für Schiedsverfahren 169.

141  Walter Rechberger, ‘Die Widerspüchlichkeit eines Schiedsspruchs als Aufhebungsgrund nach österreichischem Recht’ (2006) Zeitschrift für Schiedsverfahren (2006) 169.

142  OGH 8 March 2006, 7 Ob 252/05t; OGH 7 Ob 545/92 SZ 65/95; K Heller, ‘Die Anfechtbarkeit von Teil- und Zwischenschiedssprüchen in Österreich’ in Praxis des Internationalen Privat- und Verfahrensrecht (Gieseking Verlag, 1994) 142.

143  OGH 8 March 2006, 7 Ob 252/05t.

144  ACCP, § 611(1) second sentence.

145  ACCP, § 577.

146  ACCP, § 606(3).

147  OGH 27 March 1929, 2 Ob 238/29; OGH 23 September 1913.

148  OGH 5 March 1936, 3 Ob 171/36.

149  ACCP, § 611(3).

150  ACCP, § 579 (‘Rügepflicht’)—Preclusion is generally only possible if there are provisions which determine the underlying problem to have been relevant during the arbitral proceedings. This applies in particular to lack of arbitrability (ACCP, § 582), defects in the arbitration agreement (ACCP, § 583), defects in the composition of the arbitral tribunal (ACCP, §§ 586ff), and procedural errors (ACCP, §§ 594ff). In these cases, preclusion is only excluded if the party either (unsuccessfully) took timely action against one of the defects listed, or if it had no knowledge of the defect.

151  N Pitkowitz, ‘Digest of Austrian Case Law on Setting Aside Arbitral Awards’ in C Klausegger et al, Austrian Arbitration Yearbook 2008 (CH Beck, Stämpfli & Manz, 2008) 433ff.

152  Pitkowitz (n 151) 237ff; Kloiber and Haller (n 67) 56; See also Pitkowitz (n 39) paras 135ff.

153  Pitkowitz (n 151) 241ff.

154  S Riegler, in S Riegler et al (eds), Arbitration Law of Austria: Practice and Procedure (Juris Publishing, 2007) § 611, para 35; see also Pitkowitz (n 39) paras 183ff.

155  Basically, only the entire removal of the right to be heard has been accepted as grounds for setting aside, and only in very limited cases a partial removal. This has been criticized by A Reiner, ‘Schiedsverfahren und rechtliches Gehör’ in Zeitschrift für Rechtsvergleichung und Europarecht mit ZER (Manz, 2003) 52ff; and Pitkowitz (n 39) paras 199–200; see also OGH 24 April 2013, 9Ob27/12d.

156  OGH 20 November 1996, 3 Ob 2374/96f RZ 1997, 72.

157  OGH 3 May 1899, GIUNF 603.

158  Reiner (n 47) § 610, para 189; Power (n 72) § 610, para 6.

159  OGH 30 June 2010, 7 Ob 111/10i.

160  N Pitkowitz, ‘Setting Aside Arbitral Awards Under the New Austrian Arbitration Act’ in C Klausegger, et al (eds), Austrian Yearbook on International Arbitration 2007 (CH Beck, Stämpfli Verlag, 2007) 241ff.

161  See also Pitkowitz (n 39) paras 222ff.

162  Pitkowitz (n 160) 243ff; Zeiler (n 27) 261, 264.

163  Pitkowitz (n 160) 245ff; Zeiler (n 27) 261, 264; see also Pitkowitz (n 39) paras 265ff.

164  Liebscher (n 78) annotated text to ACCP, § 611.

165  ACCP, § 579; Schwarz and Konrad (n 36) para 27-053.

166  Pitkowitz (n 160) 249ff; See also Pitkowitz (n 39) para 318ff.

167  See Pitkowitz (n 160) 249ff.

168  OGH 24 April 2013, 9Ob27/12d.

169  Reiner (n 47) § 611, para 199.

170  Oberhammer (n 68).

171  Pitkowitz (n 160) paras 359–361; OGH 9 June 1937, 3 Ob 402/37.

172  Riegler (n 154) § 611, para 73.

173  Reiner (n 47) § 611, para 201.

174  ACCP, § 582.

175  Pitkowitz (n 39) para 374—these are generally matters under the Rent Act, § 37, such as increases in rent and incidentals, refurbishments, accounting, etc.

176  Pitkowitz (n 39) para 369.

177  Pitkowitz (n 39) paras 371 and 377–387.

178  Riegler, in S Riegler et al (n 154) § 611, para 86; N Pitkowitz, Klimt Decision violating public policy? (ecolex, 2007) 663.

179  OGH 5 May 1998, 3 Ob 2372/96m; OGH 23 February 1998, 3 Ob 115/95. See also Pitkowitz (n 39) paras 427–428.

180  OGH 26 January 2005, 3 Ob 221/04b.

181  ACCP, § 507.

182  See also Schwarz and Konrad (n 36) para 27-063.

183  C Liebscher, Reform des österreichischen Schiedsrechts (RdW, 1999) 328ff, who would have preferred the jurisdiction of the Supreme Court of Justice right from the beginning; A Reiner, Anmerkung zum Entwurf eines Schiedsrechts-Änderungsgesetzes 2005 (ecolex, 2005) 523ff; K Neuteufel, Art XXIX EGEO und das New-Yorker Übereinkomen über die Anerkennung und Vollstreckung ausländischer Schiedssprüche (ÖJZ, 2006) 433ff, appreciates the uniformity of this system of several instances, in view of the large number of cases involving high amounts in dispute, but criticizes the time it takes.

184  SchiedsRÄG 2013 (n 15).

185  ACCP, § 615. See n 15. Applicable for proceedings commenced after 31 December 2013.

186  Court Fee Act (‘Gerichtsgebührengesetz’) item (TP) 3.

187  Zeiler (n 27) 274ff.

188  OGH 1 February 1980, 2 Nd 502/80; see also E-M Bajons, ‘Zur Nationalität internationaler Schiedssachen’ in Festschrift für Winfried Kralik (Manz, 1986) paras 3 4ff with further references.

189  OGH 24 March 1988, 6 Ob 1512/88.

190  OGH 1 December 1954, 3 Ob 689, 690/54.

191  OGH 6 February 1923, Ob II/49.

192  B Kloiber, ‘Vorläufige oder Sichernde Maßnahmen durch Schiedsgerichte’ (2006) Zivilrecht aktuell 247 and G Zeiler, ‘Erstmals einstweilige Maßnahmen im Schiedsverfahren’ (2006) Zeitschrift für Schiedsverfahren 79ff.

193  J-P Lachmann, Handbuch für die Schiedsgerichtsbarkeit (2nd edn, Schmidt, 2002) 462ff; K Massuras, Dogmatische Strukturen der Mehrheitsparteienschiedsgerichtsbarkeit (Lang,1998) 524; F von Schlabrendorff, ‘Parallele Verfahren, Aufnahme von Dritten, Verbindung von Verfahren—Erfahrungen aus der Praxis der ICC’ in KH Böckstiegel et al (eds), Die Beteiligung Dritter im Schiedsverfahren (Carl Heymanns Verlag, 2001) 69.

194  Geimer, in Böckstiegel et al, Die Beteiligung Dritter im Schiedsverfahren 73; R Merkin, Arbitration Law (3rd edn, informa, 2004) 15-8/4ff.

195  Controversial. This view is supported by Zeiler, who is of the opinion that third parties who have intervened in support of a party may bring an action to set aside the award, Zeiler (n 18) 274. However, this statement is only made with reference to cases in which the intervening third party has actually joined the dispute, which means that a consensus must have been reached by the parties to the arbitration.

196  G Backhausen, Schiedsgerichtsbarkeit unter besonderer Berücksichtigung des Schiedsvertragsrechts (Manz, 1990) 163.

197  OGH 17 June 1953, 2 Ob 378/53. See also OGH 24 July 1997, 6 Ob 186/97i, discussing the effects of the mere acknowledgement of receipt of an award.