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The European Arbitration Review 2018

Greece

Introduction

The Greek legal framework for arbitration is dualistic. International commercial arbitration seated in Greece is governed by Law 2735/1999 on International Commercial Arbitration (LICA), which largely incorporates the provisions of the 1985 UNCITRAL Model Law (1985 Model Law, or Model Law), whereas arbitrations to which the LICA is not applicable, such as domestic arbitrations or international arbitrations of non-commercial nature, are regulated by the Greek Code of Civil Procedure (the CCP).

Both the CCP and the LICA provide a liberal framework for international arbitration, safeguarding the core principles of arbitration, such as:

  •  the separability of the arbitration agreement;1
  • the wide power of the parties to decide upon matters relating to the arbitration procedure (the ‘party autonomy’ principle);
  • the power of arbitrators to decide upon their own jurisdiction (the ‘competence-competence’ principle);2
  • The arbitrators’ wide discretion on how to run the proceedings;3 and
  • a relatively limited possibility for recourse against the award.4

Regarding recourse against an award, Greece has also incorporated in its legal framework, by Legislative Act 4220/1961, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (New York Convention), which provides that the national judge may refuse enforcement of foreign arbitral awards on very limited grounds.5 Finally, Greece is party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention).

The CCP contains a chapter on arbitration (Book 7, Articles 867-903, last amended in 2015).6 Certain provisions that are relevant in the context of arbitration are also found outside Book 7.7

As the general framework on arbitration, the relevant provisions of the CCP may also apply as gap-filling provisions, if certain issues are not regulated by the LICA. For example, the res judicata effect of an international arbitral award issued in Greece will be determined by application of CCP Article 322 and relevant jurisprudence of Greek courts.8 Similarly, the possibility to waive the right to challenge the award before the dispute arises, on which the LICA is silent, will be regulated by CCP Article 900.9

This article will first examine the main differences between the regulation of domestic and international arbitration in Greece, before pointing out the main differences between the LICA and the Model Law. It will finally discuss certain additional characteristics of the Greek legal framework, which are of interest to arbitration practitioners.

Main differences between domestic and international arbitration

The Greek framework for domestic arbitration under the CCP differs from the framework applicable to international arbitration in certain important respects. In general, arbitrators’ powers and freedom are restricted in domestic arbitration, whilst the national courts’ involvement in domestic arbitration is broader.

Arbitrators’ remuneration

In Greek domestic arbitration, arbitrators’ remuneration is regulated. Arbitrators may claim specific percentages of the amount in dispute, varying between six per cent for very small disputes and one per cent, and their fees cannot exceed €44,000.10 No cap applies in international arbitration, except if the arbitrator is a judge in Greek courts, in which case the cap is €59,000.11

It is indeed possible that an acting national judge is appointed arbitrator – but this possibility is subject to strict conditions and a regulated framework. For example, a national judge may act only as sole arbitrator or president of the tribunal and cannot be specifically designated by the parties, who are only allowed to select, in abstracto, a judge of a given court – the selection and appointment of the particular individual will then be made by the selected court.12

Powers of national courts

The Greek framework for domestic arbitration is characterised by a limited application of the in favorem arbitrandum principle, compared to international arbitration.

In domestic arbitration for example, if an arbitrator does not accept his or her appointment, resigns, or dies, and the arbitration agreement/arbitration rules do not provide the modalities for the arbitrator’s replacement, it is considered that the agreement to arbitrate is no longer in effect, and the national courts become competent to hear the dispute.13

Moreover, arbitrators in domestic arbitrations do not have the power to order interim or conservatory measures, which is the sole prerogative of national courts.14

Recourse against an arbitral award

Appeal against an arbitral award is not permitted. However, an award can be set aside by the Court of Appeal of the place of arbitration. The grounds for setting aside an arbitral award are much broader in domestic arbitration compared to international commercial arbitration. Apart from the ‘standard’ grounds for setting aside of the UNCITRAL Model Law,15 the CCP also includes the following grounds:16

  • if the award was issued after the expiry of the arbitration agreement;17
  •  if the parties had revoked18 the arbitrators at the time the award was issued;
  • if the decision-making process was not in accordance with the parties’ agreement, or, in the absence of such agreement, with the relevant provisions of the CCP;19
  • if the award did not comply with the legal provisions regarding its form and content;20
  • if the award is incomprehensible or contains contradictions; and
  • If the conditions for judicial review of CCP Article 544 are met – this will notably be the case in the event of contradictory judgments; if a party was not properly represented or notified in the proceeding; if the same legal representative represented parties with conflicting legal interests; if a person appearing as representative of a party did not have a valid power of attorney; if the decision is based on a false statement of a witness, expert, party, or on fake documents; if after the issuance of the award, a party has access to critical documents which it could not have had access to at the time of the proceedings; or if the decision is based on fraud or corruption.

The CCP also provides for an additional, autonomous recourse against an arbitral award: the application to declare the award non-existent.21 This can only be done in three exceptional situations: if there is no agreement to arbitrate, if the object of the dispute is non-arbitrable, or if the arbitration proceedings were initiated against a non-existent person or entity.

Main differences between the Greek law on international arbitration and the 1976 UNCITRAL Model Law

As we have seen, the Greek legal framework applicable to international commercial arbitrations seated in Greece is the LICA, which largely incorporates the 1985 Model Law.

The wide definition of ‘international’ in the Model law has been adopted as such in the text of the LICA. To the extent that one of the parties has its place of business outside Greece, or that the contract is to be performed in substantial part abroad, or that the subject-matter of the dispute is related with a country other than Greece, the arbitration will be considered as international. The LICA (as well as the Model Law) is also applicable when the parties ‘have expressly agreed that the subject-matter of the arbitration agreement relates to more than one country’. In order to secure the applicability of the LICA on the basis of this provision, the arbitration rules of certain Greek arbitration institutions provide that the agreement of the parties to apply the rules in question has the meaning of an express agreement of the parties that the subject matter of the arbitration agreement relates to more than one country.22

The paragraphs below will focus not on the general characteristics of Greek arbitration, which are common to all States having adopted the Model Law, and thus already familiar to arbitration practitioners, but on the main idiosyncrasies of the Greek legal framework, ie, on the matters on which the Greek legislator distanced himself from the Model Law.

Arbitration agreement in ‘writing’

The LICA provides for certain additional exceptions to the rule that the arbitration agreement must be ‘in writing’, compared to the Model Law.

  • The requirement is considered to be met when an oral arbitration agreement is recorded in writing and communicated to the parties, provided that no objection is raised within a reasonable time frame.23
  • The reference in a bill of lading to an arbitration clause contained in a carriage of goods contract constitutes a valid arbitration agreement.24
  • The unreserved participation of the parties in the arbitration procedure cures any problem with regard to the written form requirement.25

Decision-making process

Article 29 of the Model Law requires that the tribunal take decisions by majority vote. Article 29 of the LICA adds that if no majority can be formed, the president has the prevailing vote, a provision similar to that of the CCP, applicable in domestic arbitration.26

Substitute arbitrator

LICA Article 15 regulates the case of replacement of arbitrators. It provides, just like the Model Law, that the substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the replaced arbitrator. LICA adds the following provision: ‘the newly constituted arbitral tribunal shall decide unanimously whether the proceedings will continue from the point where they were interrupted due to the termination of the mandate of the replaced arbitrator, unless the parties decide otherwise.’ The requirement that such decision needs to be taken by unanimity de facto gives a wide power to the newly appointed arbitrator to insist on the repetition of significant steps of the proceedings. We note, however, that this provision applies subject to a different agreement of the parties, and in the event of institutional arbitration, or arbitration under a specific set of rules, the solution provided in the applicable rules will prevail.

Challenge to the award

According to the LICA, a partial award upholding jurisdiction cannot be challenged in itself. Such award has the status of a ‘preliminary ruling’ and can only be challenged when the award on the merits is issued, as a part of the latter.27 This is an important difference from the Model Law, which allows for recourse against such decision before national courts, within a short time frame (30 days), and without the suspension of the arbitration, which continues normally.

Article 34.2.a.iii of the LICA refers, as a ground for setting aside the award, to a situation whereby ‘the award deals with a dispute not falling under the arbitration agreement, or contains provisions which exceed the scope of the arbitration agreement’, omitting the additional hypothesis of the Model Law ‘or contains decisions on matters beyond the scope of the submission to arbitration’.28 This wording therefore appears to exclude the annulment of an award on the basis of ultra petita, ie, in a situation where the tribunal decided on matters falling within the scope of the arbitration agreement, but beyond the scope of the parties’ claims in the arbitration.29

Moreover, the LICA does not explicitly grant the tribunal the power to issue a supplementary award, in order to avoid infra petita or in order to eliminate the grounds for setting aside, a position contained in article 33.3 of the Model Law.

Finally, the LICA adds a specific provision, in Article 35, to clarify that the application to set aside the award does not suspend its enforcement. However, the national court may order the suspension, if it considers possible that the setting aside proceedings will be successful.30

Other noteworthy features of the Greek legal framework relevant to arbitration

The following paragraphs provide certain additional elements of the Greek legal framework, most of which apply to both domestic and international arbitrations, and which are relevant to the arbitration practitioner.

Agreement to arbitrate

Arbitrability and Scope of the Arbitration Clause

Greek law considers private law disputes as arbitrable,31 provided that the parties to the arbitration agreement have the right to freely dispose of the subject matter of the dispute.32 Therefore, criminal and administrative disputes are not arbitrable, as they do not fall under the category of private law disputes, whereas family disputes are non-arbitrable, as the parties do not have the right to dispose of the subject matter of the dispute. The recent 2015 amendments to the CCP (which entered into force on 1 January 2016) have limited the categories of specific exceptions to arbitrable private law disputes to labour law disputes. Disputes which previously were non-arbitrable, such as disputes involving consumers and disputes between insurance companies and their clients, are now arbitrable.

The Greek courts have admitted that, depending on the wording of the arbitration agreement, claims relating to tort liability in connection with contractual performance are admissible in arbitration.33

Article 49 of Law Introducing the Civil Code provides that the Greek State can only conclude an arbitration agreement following consultation with the Legal Council of the State and a decision of the Minister of Finance and the Minister relevant to the contractual project.

On the other hand, a recent legislative act offers wide protection to contractors that have signed procurement contracts with the Greek State. Law 4281/2014 on Public Procurement provides that the specific terms of arbitration clauses included in public procurement contracts supersede any contrary legal provisions of national laws.34

Procedural issues

Competent Court for Issues Related to Arbitration

There is no specialist arbitration court in Greece. In both domestic and international arbitration, the Single-Member Court of First Instance, within the jurisdiction of which lies the place of arbitration, is, in principle, competent to assist with the appointment of arbitrators and to hear arbitrator challenges – whereas, exceptionally, the Single-Member Court of First Instance of the domicile or residence of the arbitrator or the applicant may also be competent. Challenges to domestic and international awards are to be brought before the Court of Appeal of the place of arbitration.36

Document Production

Greek law contains no provisions relating to the production of documents. In the absence of an agreement of the parties on the issue, the tribunal has the discretionary power to allow document production. Moreover, the tribunal may seek the assistance of the lower instance court (the ‘Peace Court’) for the gathering of evidentiary documents.37

Confidentiality             

Greek law is silent on the issue of confidentiality. Parties wanting to ensure that their arbitration will be confidential have to provide so in the arbitration agreement.

Award

Res Judicata

An arbitral award is res judicata regarding both the decision on the substantive issues and the jurisdictional issues raised (with respect to the competence of the arbitration tribunal, for example, or the admissibility of the claims).38 The res judicata covers the operative part of the decision (the legal consequences), as well as the ‘core’ of the reasoning: the direct legal and factual cause of these consequences. The res judicata does not cover the entire factual context of an upheld claim, for example.39

Recourse against an award

Waiver of the Right of Recourse

Pursuant to the CCP article 900, parties are not allowed to waive by agreement, prior to the issuance of the award, the right to set aside the award.40 The Greek courts have recently held, however, that when a waiver of the right to recourse has been made by the Greek State, and as such, endorsed by specific law, the waiver is valid, by application of the principle that a later law repeals an earlier law (‘lex posterior derogat legi priori’). Such waiver needs, however, to be explicit.41

Restrictive Application of the Public Policy Exception

Since recently, Greek case law construes the violation of public policy restrictively, as a ground for setting aside or non-enforcement of an arbitral award. Indeed, there has been contradictory case law in the past on whether the public policy exception should be construed more widely in domestic arbitration, compared to international arbitration seated in Greece. Certain decisions considered that in domestic arbitration public policy should be construed as comprising all mandatory rules.42 The Supreme Court, in its decision No. 14/2015 (Plenary Session), clarified that the public policy exception should be construed restrictively, both in domestic and international arbitration, as only referring to the fundamental constitutional, civil, cultural, social and economic values of Greece.43

Arbitrators’ Liability

CCP Article 881 provides that arbitrators are only liable for wilful misconduct or gross negligence in the exercise of their duties.

Notes

  1. Or autonomy of the arbitration agreement, ie, the principle that the arbitration clause survives the termination, voidance or invalidity of the main contract. In practice, this means that the arbitral tribunal can uphold jurisdiction over a dispute, even if it finds that the contract containing the arbitration clause is invalid. See Greek Supreme Court Decision No. 877/2000.
  2. CPC, Articles 264, 887.2; LICA, Articles 8, 16.
  3. CCP Article 886.1; LICA, Article 19.2.
  4. CCP Articles 895, 897, LICA, Article 34.
  5. Please note that Greece has made two reservations under Article 1(3) of the New York Convention: (i) the Conventions applies exclusively with respect to arbitral awards issued in another Contracting State; and (ii) it applies only to awards issued on disputes of commercial nature.
  6. The last amendments were incorporated with law 4335/2015 and entered into effect on 1 January 2016.
  7. For example, CCP Article 263 provides that an objection to the jurisdiction of a national court based on the existence of an arbitration agreement must, in principle, be raised at the hearing at the latest, in order to be admissible. CCP Article 264 provides that even if the national court considers itself incompetent due to the existence of an arbitration agreement, all procedural consequences of submitting the claim to the national court (such as the suspension of the period of limitation applicable to the claim) remain effective. CCP Article 322 refers to the scope of res judicata.
  8. The res judicata effect will be discussed below. It must be noted that in Greece, as a civil law system, jurisprudence in not a ‘source of law’: precedent does not make law. However, court cases are an important means of interpretation of statutory provisions.
  9. The possibility for such waiver will be discussed below.
  10. CCP, Article 882.
  11. CCP, Article 882A.
  12. The appointment is made in the order of inscription in a list, on which appear, in principle, all the judges of the court in question. CCP, Article 871A.
  13. CCP, Article 885.
  14. CCP, Article 685.
  15. Article 34 of the Model Law provides the following grounds for the setting aside of an award: (i) a party to the arbitration agreement was under some incapacity, or the arbitration agreement is not valid under the lex arbitri; (ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; (iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; (iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties (unless the agreement was contrary to a mandatory legal provision), or, failing such agreement, the composition was not in accordance with the law; (v) the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State; or (vi) the award is in conflict with the public policy of the State.
  16. CCP, Article 897. See also Articles 886(2), 891, 892 and 544, referred to in Article 897.
  17. Such a situation would arise, for example, in the event that an arbitrator died or withdrew and the arbitration agreement did not provide for a procedure for the arbitrator’s replacement.
  18. Indeed, the CCP provides the parties with the possibility to revoke, with common agreement, the arbitrators. See CCP, Article 883.
  19. CCP, Article 891 provides that the decisions of the arbitral tribunal are to be taken by majority, whereas if a majority is not possible, the view of the presiding arbitrator prevails.
  20. In this respect, CCP, Article 892 lists the necessary content of an award and provides that the arbitrators must sign by hand the award (except if one arbitrator refuses to sign, in which case the award must indicate this).
  21. CCP, Article 901.
  22. See for example, Piraeus Association for Maritime Arbitration (PAMA) Arbitration Rules, Article 37.2.
  23. LICA, Article 7.4.
  24. LICA, Article 7.6.
  25. LICA, Article 7.6.
  26. CPC, Article 891.
  27. LICA, Article 16.3.
  28. LICA, Article 34.2.A.iii.
  29. This situation of ultra petita does not constitute, in itself, a ground for annulment in domestic arbitration either. CCP, Article 897 only refers to the hypothesis that the arbitrators have acted beyond the powers that the agreement to arbitrate or the law grants them with. Greek courts have refused to set aside an award on the ground that the arbitrators have taken into account a factual element not specifically pointed to by the parties, but included in the documents the parties submitted (see for example Supreme Court, Plenary Session, Decision No. 13/95; Supreme Court Decision 40/2010). On the contrary, an award which is based on elements not appearing in the submissions of the parties, but of which the arbitrator has personal knowledge, are set aside on the ground of violation of the equality of arms principle. See Supreme Court Decisions No. 40/2010, 1009/2002).
  30. LICA, Article 35.3.
  31. Private law is the law governing the relationships among private parties. Private law disputes also include disputes involving a State entity engaging in commercial conduct.
  32. CCP, Article 867.
  33. See for example Supreme Court, Plenary Session, Decision 8/1996; Supreme Court Decision No. 550/1996.
  34. Law 4281/2014, Article 194.
  35. See for example CCP, Articles 878.1, 880, 882.6 and 622A; LICA, Article 6.1.
  36. CCP, Article 898; LICA, Article 6.2. A final recourse (‘cassation appeal’) against such decisions of the Court of Appeal can be brought before the Supreme Court within three months from the date of the registration of the award.
  37. CCP, Article 888.3.
  38. CCP, Article 322.
  39. See for example, AP 133/2000.
  40. CCP, Article 900. The LICA does not contain any provision as to the validity or invalidity of such a preliminary waiver, and therefore CCP Article 900 applies as a gap-filling provision.
  41. Supreme Court Decisions Nos. 62/2016, 64/2016, 65/2016, 66/2016 and 67/2016.
  42. See Supreme Court Decision No. 1807/2014 and decisions cited therein.
  43. Supreme Court, Plenary Session Decision No. 14/2015.