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Commercial Arbitration

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Austria

Franz T Schwarz
WilmerHale

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. Austria has been a party to the New York Convention (NYC) since 2 May 1961.

    As of 25 February 1988, Austria withdrew its reciprocity reservation made under Article I(3) of the NYC, and Austrian arbitration law was amended accordingly. Austrian courts fully recognize and enforce foreign arbitral awards in accordance with the NYC.

  3. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  4. Bilateral Treaties:

    The former Yugoslavia signed on 18 March 1960 (BGBl 115/1961 – now applicable between Austria and Bosnia-Herzegovina, Croatia, Macedonia, Slovenia and the Federal Republic of Yugoslavia); Belgium signed on 16 June 1959 (BGBl 287/1961); British Colombia signed on 28 September 1970 (BGBl 314/1970); Germany signed on 6 June 1959 (BGBl 105/1960); USSR signed on 17 October 1955 (BGBl 193/1956 – now applicable in relation to the Russian Federation); Switzerland signed on 16 December 1960 (BGBl 125/1962); and Liechtenstein signed on 5 July 1973 (BGBl 114/1975).

    Multilateral Agreements:

    Protocol on Arbitration Clauses, Geneva, 24 September 1923 (BGBl 57/1928); Convention on the Execution of Foreign Arbitral Awards, Geneva, 16 September 1927 (BGBl 343/1930); Convention on German Foreign Debts, London, 17 February 1953 (BGBl 203/1958); Convention on the Recognition and Enforcement of Foreign Arbitral Awards, New York, 10 June 1958 (BGBl 200/1961); European Convention on International Commercial Arbitration, Geneva, 21 April 1961 (BGBl 107/1964); Convention on the Application of the European Convention on International Commercial Arbitration, 17 December 1962 (BGBl 19/1965); Convention on Settlement of Investment Disputes between States and Nationals of other States, Washington, 18 March 1965 (BGBl 357/1971); Convention concerning International Carriage by Rail (COTIF) together with the Protocol on Privileges and Immunities of the International Organisations Concerning International Carriage by Rail (OTIF), Appendix A – Uniform Rules Concerning the Contract for International Carriage of Passengers and Luggage by Rail (CIV) and Appendix B – Uniform Rules Concerning the Contract of International Carriage of Goods by Rail, 19 May 1980 (BGB 225/1985).

  5. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  6. Austria’s current arbitration act entered into force on 1 July 2006 ( ‘SchiedsRÄG 2006 ‘) and is contained in a separate part of the Austrian Code of Civil Procedure (part 6, chapter IV, section 577 to 618). The new arbitration law governs all arbitrations that have their seat in Austria and that were initiated on or after 1 July 2006. It is based in significant part on the UNCITRAL Model law and does not distinguish between domestic and international arbitration.

    A particular temporal distinction is made with respect to the conclusion (including form requirements), interpretation and validity of arbitration agreements. The new 2006 law applies to arbitration agreements concluded on or after 1 July 2006. For arbitration agreements concluded before that date, the older arbitration act (former ZPO, section 577) continues to apply.

  7. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  8. The International Arbitral Centre of the Austrian Federal Economic Chamber ( ‘VIAC ‘) is the leading arbitration institution in Austria. It only administers international cases (some 50 or so a year), with a particular emphasis on disputes involving the central and eastern European region, Russia, and (more recently) China. Its own rules of arbitration ( ‘Vienna Rules ‘) were last modified with effect of 1 July 2006 in order to reflect the new Austrian arbitration law. The VIAC frequently acts as appointing authority.

    The VIAC’s current secretary general is Dr Manfred Heider. The VIAC is located at:

    Wiedner Hauptstrasse 63

    PO Box 319

    1045 Vienna, Austria

    Tel.: +43(0)5 90 900 – 4397, 4398, 4399

    Fax: +43(0)590 900-216

    e-mail: arb@wko.at

    http://wko.at/arbitration

  9. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  10. Foreign arbitral institutions are permitted to operate in Austria. The ICC has a dedicated and active National Committee, led by Dr Maximilian Burger-Scheidlin, with an office located at:

    Wiedner Hauptstrasse 63

    A- 1045 Vienna

    Tel.: +43 (0)05 90 900 3701

    Fax: +43 (0)05 90 900 3703

    E - mail: icc@icc-austria.org

    http://www.icc-austria.org

  11. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  12. Austria does not have a specialised arbitration court; however, arbitration has a long history in Austria. In addition, almost all international arbitrations have their seat in Vienna, where court interventions for commercial arbitration matters come before a specialised commercial court. Appeals are then heard by the Oberlandesgericht Wien (Vienna Court of Appeal). In cases of particular import; ie, where a substantive or procedural legal question needs to be solved for which prior, uniform case law does not exist; where the court of appeal deviates from prior case law; or where the value of the amount in dispute exceeds € 20,000 (section 502 ZPO), parties can request review by the Austrian Supreme Court. Court proceedings are relatively swift and awards are very rarely set aside.

    Agreement to arbitrate

  13. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  14. Substantive requirements: Austrian law requires that an arbitration agreement must identify the parties and express the parties’ intention to submit their disputes to arbitration. This may be in relation to existing or future disputes, but must be in relation to a pre-defined legal relationship (ie, ‘arising out of ‘ or ‘in connection with ‘ a particular contract or other legal relationship). More restrictive rules exist with respect to arbitration agreements with consumers.

    Formal requirements: Under the new law, the arbitration agreement must be contained in a document signed by the parties or in letters, faxes, emails or other forms of communications that prove the existence of the agreement (section 583 ZPO). This also includes electronic forms of communications capable of providing a record of the arbitration agreement. The standard of formal requirements is the same as set forth under article II of the New York Convention. Stricter formal requirements apply where a consumer or an employee is a party to the arbitration agreement.

  15. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  16. Under section 582(1) ZPO, any ‘claim involving an economic interest that lies within the jurisdiction of the court may be subject to an arbitration agreement. An arbitration agreement relating to non-economic claims has legal effect insofar as the parties are able to conclude a settlement regarding the matter in dispute. ‘. This definition is intended to include a broad range of pecuniary and non-pecuniary matters.

    Non-arbitrable are all disputes that would be decided by regulatory or supervisory authorities, as well as claims which are to be decided by the Patent Office.

    Austrian law knows two systems of enforcement: private (which includes sanctions like enforcement , nullity and damages, which are fully arbitrable) and public remedies (and are not arbitrable). Claims arising out of family law matters as well as disputes arising out of contracts related to the Landlord and Tenant Act, Assisted Housing Act and Cooperative Apartment Ownership Act are also not arbitrable.

    Employment law or consumer disputes are only arbitrable if the arbitration clause is concluded after the dispute has arisen (sections 617, 618 ZPO).

  17. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  18. As a general principle, only the signatory parties to an arbitration agreement are bound by the agreement. However, Austrian courts have extended arbitration agreements to non-signatories, such as legal successors, third party beneficiaries, guarantors, assignees of a debt, and others. Although Austrian courts apply a strict form requirement, these cases reveal important principles that may have wider implications for non-signatory extensions.

    Whilst Austrian arbitration law does not expressly regulate the admissibility to join a third party, Austrian doctrine has discussed the possibility of a ‘third party intervention’. It is argued that a third party intervener must have an interest in the arbitration, be a party to the arbitration agreement or otherwise submit to the jurisdiction of the arbitral tribunal. The joinder requires the consent of the parties, which can be express or implied, either at the time the request for a joinder is made or at an earlier stage eg, by virtue of a specific joinder clause in the contract. If the arbitral tribunal has already been constituted, the intervener must waive its rights to participate in the constitution of the arbitral tribunal. Once the intervener is joined to the proceedings, it enjoys all procedural rights, in particular the right to be heard.

  19. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  20. Austrian arbitration law does not contain any provisions dealing with the consolidation of two or more arbitration proceedings. Nevertheless, a consolidation, even where the disputes arise from different contracts, is permissible as long as it is based on the parties’ and the arbitrators’ consent. Article 15(8) of the Vienna Rules specifically deals with the consolidation of disputes. It provides that two or more arbitral proceedings may be consolidated if (i) the same arbitrators have been appointed in all the disputes that are to be consolidated; and (ii) if all the parties agree to the consolidation.

  21. 11.

    Groups of companies
    Is the 'group of companies doctrine' (or any other basis for piercing the corporate veil) recognised in your jurisdiction?

  22. Austrian arbitration law does not recognise the distinct legal instrument referred to as the ‘group of companies doctrine ‘. However, Austrian law recognises, in certain circumstances and as a matter of substantive law, the principle of corporate veil piercing. Current arbitration case law also provides that, where substantive liabilities are passed on, e.g. through legal succession, the arbitration clause attached to those liabilities follows with them. These principles could conceivably allow the application to a parent of an arbitration clause concluded by a subsidiary, if the subsidiary’s substantive liabilities are passed to the parent qua corporate veil piercing. This particular scenario has, however, not yet been tested in the Austrian courts.

  23. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  24. Although there is no express basis in the arbitration act, the Austrian courts typically presume, as a matter of contract construction, that commercial parties intended the arbitration agreement to apply even where the existence of the main contract is disputed.

  25. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
  26. The principle of Kompetenz – Kompetenz is recognised in Austria under Section 592 (1) ZPO (and article 19 of the Vienna Rules). Indeed, once an arbitration has been initiated, it is only for the arbitrators to decide on jurisdiction; a parallel claim before the Austrian courts is not permissible (section 583(3) ZPO). However, the arbitrators’ award on jurisdiction can still be challenged, and hence reviewed by the courts, under section 611(1) No. 1 and No. 3 ZPO .

  27. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  28. Leaving aside the general requirements of form, substance and arbitrability, and the particular requirements for the conclusion of arbitration agreements with consumers and employees already mentioned, the most important drafting issue for arbitration agreements governed by Austrian law is the issue of representation.

    Under the old arbitration law (which, however, continues to apply to all arbitration agreements concluded prior to 1 July 2006) an agent concluding an arbitration agreement on behalf of a principal needed a particular (rather than general) written power of attorney to do so (section 1008 of the Austrian Civil Code). In other words, the written power of attorney had to state specifically that the agent was authorised to conclude the arbitration agreement (not just the main contract). The 2006 reform has introduced two exception to this rule: persons acting under a commercial power of attorney or with Prokura (‘Prokura’ is a legally defined special power of attorney granted to a ‘Prokurist ‘ who holds such special statutory power) no longer need a special written power of attorney for the conclusion of arbitration agreements. (Also, a defect in the agent’s authorisation can be cured through the subsequent, written consent by the principal.)

    As another drafting matter, the possibility to apply to the Austrian courts to have the award set aside cannot be excluded in advance.

  29. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  30. There is no reliable statistical data available regarding the number of ad hoc arbitrations and whether the UNCITRAL Rules are commonly applied as arbitral rules. From practical experience, both ad hoc arbitration and the UNCITRAL Rules are popular in Austria, but so is institutional arbitration. Here, the VIAC is a very popular choice, as is the ICC. According to ICC statistics, Austria has been chosen as arbitral seat 102 times between 2000 to 2009.

  31. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  32. It is important to ensure the equality of the parties, in particular where arbitration agreements provide for a specific appointment mechanism for arbitrators. In multi-party disputes, multiple claimants and multiple respondents have to agree on one arbitrator for their side. If they are unable to do so within four weeks, any party, whether from the respondent’s or claimant’s side parties may request the court, unless they have determined otherwise, to appoint the arbitrator or arbitrators.

    Commencing the arbitration

  33. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  34. In ad hoc arbitrations, the arbitration starts with a request to the other party to appoint an arbitrator (section 587 (4) ZPO). This written request shall contain particulars of the claim brought and refer to the arbitration agreement upon which the party relies.

    The general rule in ad hoc proceedings is that arbitration commences when the respondent receives the request for the appointment of an arbitrator. At the same time, statutes of limitations are interrupted.

    In institutional proceedings, the statute of limitation is normally interrupted upon receipt of the claim by the institution. Pursuant to article 9(1) of the Vienna Rules the proceedings are pending upon receipt of the statement of claim by the Secretariat.

    Choice of law

  35. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
  36. Under section 603 ZPO, the parties are free to choose any law; or any ‘rules of law’ (which includes non-binding legal texts as eg, the UNIDROIT Principles, the Principles of European Contract Law or a reference to lex mercatoria) to govern their contract. In the absence of a choice of law clause, or where such choice is unclear, the arbitral tribunal shall apply the law that it considers ‘appropriate’.

    Appointing the tribunal

  37. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  38. Any person over the age of 18 years with legal capacity may become an arbitrator. However, Austrian judges are not allowed to accept an arbitral appointment. Parties are of course free to agree on certain qualifications or requirements a prospective arbitrator has to fulfil.

  39. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  40. Foreign nationals may act as arbitrators. For non-EU citizens, the usual travel or visa requirements may apply.

  41. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  42. If the parties fail to agree on the appointment of arbitrators, section 587(2) ZPO provides a default procedure for the appointment of arbitrator(s). The parties can also agree on a different process. Under the default rule of section 587(2) ZPO, the appointment is made by the Austrian courts as follows:

    Sole arbitrator:

    If the parties fail within four weeks upon receipt of the written request for appointment to appoint a sole arbitrator, the arbitrator will be appointed by the court upon request of one party. The same applies where a pre-agreed appointment mechanism fails.

    Three or more arbitrator tribunal:

    If the parties fail to appoint the party appointed arbitrator or arbitrators, or the so appointed arbitrators fail to appoint the presiding arbitrator within four weeks after their appointment, these arbitrators will also be appointed, upon request of a party, by the court.

  43. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  44. Under section 594(4) ZPO ‘[a]n arbitrator who does not at all or who does not timely fulfil any obligation resulting from the acceptance of his appointment shall be liable to the parties for all damage caused by his culpable refusal or delay. ‘ According to Austrian case law, arbitrators can be held liable not only for the duties listed under section 594, but also under general principles of tort and contract law provided that they intentionally or negligently caused the invalidity of the arbitral award. Procedural errors and incorrect decisions on the merits will not give rise to liability of the arbitrator unless they are the result of gross negligence and only if the award has been successfully challenged.

  45. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  46. There is no specific provision under Austrian law as to secure the payment of arbitrators’ fees.

    It is general practice for arbitral tribunals in ad hoc proceedings (and their right) to request the parties upon commencement (or at any other stage) of the proceeding to make an advance payment of the arbitrators’ fees. The arbitrators can refrain from commencing their work until the parties provide them with the advance on costs (per analogiam to sections 365 and 332(2) ZPO).

    Pursuant to article 34(2) of the Vienna Rules, the Secretary General of the VIAC requests the parties at the start of the proceedings, and then as necessary, to pay an advance deposit for the expected costs and arbitrators’ fees. These funds are held in trust in a VIAC account until a final cost award.

    Challenges to arbitrators

  47. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  48. An arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or if the arbitrator does not possess the qualifications agreed to by the parties (section 588(2) ZPO).

    A24: The parties are free to agree on a specific challenge procedure, including by agreeing to refer challenges to an arbitral institution. Failing an agreement on a challenging procedure, the deadline for challenging an arbitrator is four weeks from becoming aware of the composition of the arbitral tribunal or from becoming aware of any grounds provided for in section 588(2) ZPO (see above). The application must be made in writing to the arbitral tribunal and state the reasons upon which the challenge is based. The arbitral tribunal, including the challenged arbitrator, will decide on the challenge.

    If the tribunal (in case of ad hoc arbitration) or the institution (eg, the VIAC Board according to article 16 of the Vienna Rules) rejects the challenge, the challenging party can apply within four weeks for court review. The decision of the court will be final and binding; there is no further appeal. During the pendency of the challenge before the court, the arbitration may continue and even proceed to an award.

    On the basis of the very few decisions considering the IBA Guidelines, it appears that Austrian courts are hesitant to rely on them, unless the parties agreed on their application to the respective dispute.

    Interim relief

  49. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?

  50. The parties are free to request interim relief from either a court or the arbitral tribunal. Arbitral interim relief is available ‘in respect of the subject matter of the dispute, [if] otherwise the enforcement of the claim would be frustrated or considerably impeded or there is a danger that irreparable damage will occur. ‘ Section 593(1) ZPO entitles the arbitral tribunal to order such interim measures of protection as it deems appropriate; even interim measures which are unknown to the Austrian legal system are permissible.

    Since the 2006 reform, the Austrian courts will also enforce interim measures ordered by foreign arbitral tribunals. To the extent that the interim measures are alien to the Austrian legal system, the Austrian courts are free to impose a measure of similar effect.

    It is disputed whether anti-suit injunctions are admissible to stop proceedings commenced in another jurisdiction in breach of an arbitration agreement. Under Austrian law, once an arbitration is commenced (in Austria or elsewhere), the initiation of court proceedings is not permissible. Section 584 (3) provides that ‘when an arbitration procedure is pending, no other legal dispute may be carried out before a court or an arbitral tribunal on the asserted claim. Any action brought on the grounds of the same is to be rejected. ‘

  51. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  52. There are no express rules with respect to the arbitrator’s authority to order a party to provide a security for costs in arbitration, although this could well be ordered as an interim measure if the general requirements of section 593 ZPO are met.

    Procedure

  53. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?

  54. In principle, the parties are free to agree on the conduct of the arbitration, failing which, the tribunal will determine the procedure in its discretion. In any event however, the procedure must ensure that the parties are treated fairly and equally; that each party is given sufficient opportunity to be heard; and that each party has the right to be represented by a representative of its choice (section 594). Under recent case law, if one party requests an oral hearing, it must be held. Not to do so would be a violation of the right to be heard and result in the setting aside of the award.

  55. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  56. In case of a respondent’s failure to participate in the arbitration, and unless otherwise agreed by the parties, Austrian law expressly provides that the arbitral tribunal shall continue the proceedings, but without treating the respondent’s failure in itself as an admission of the claimant’s allegations. The same applies to any procedural act where a party is in default (section 600 ZPO).

  57. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?
  58. Section 599 (1) ZPO provides that ‘[t]he arbitral tribunal is authorized to decide upon the permissibility of the taking of evidence; to conduct such taking of evidence and to freely evaluate such evidence. ‘ Austrian law therefore gives the tribunal wide discretion in organising the taking of evidence and in admitting various types of evidence. Witness statements are increasingly popular. Under Austrian law, the tribunal has the express right to reject evidence that it considers irrelevant or dilatory. The IBA Rules on the Taking of Evidence are increasingly taken into account by the parties and arbitral tribunals.

  59. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  60. The arbitral tribunal, a sole arbitrator, or a party with the authorisation of the tribunal may request the court for assistance in gathering of evidence (section 602).

  61. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  62. Austrian law does not contain any rules as to document production in arbitration (and has only very restrained use for this instrument in state court litigation). Whether or not document production will occur is for the parties to agree, or for the arbitrator to determine as a matter of procedural discretion. Section 593 ZPO entitles the arbitrator to make production orders, and article 20(5) of the Vienna Rules specifically provides that the sole arbitrator or arbitral tribunal ‘[m]ay on his (its) own initiative collect evidence, and in particular may question parties or witnesses, may request the parties to submit documents and visual evidence an may call in experts. ‘ The IBA Rules on Taking of Evidence play an increasing role in international arbitrations in Austria in this regard as well.

  63. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  64. It is mandatory for the arbitral tribunal to hold a hearing if the parties have so agreed.

    In any event, pursuant to recent case law and on the basis of section 598 ZPO, if one party requests an oral hearing, it must be held, lest the award be set aside for violating that party’s right to be heard.

  65. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
  66. According to section 595 (2) ZPO ‘the arbitral tribunal may, unless otherwise agreed by the parties, meet at any other place it considers appropriate for conducting proceedings, especially for deliberations, making decisions, conducting oral hearings and the taking of evidence.

    AWARD

    Award

  67. 34.Majority decisions
    Can the tribunal decide by majority?
  68. Unless otherwise agreed by the parties, a majority vote is sufficient for all decisions of the arbitral tribunal.

  69. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  70. The relief available to the parties is generally perceived to be a matter of substantive law, although the tribunal’s award may of course not violate the Austrian ordre public.

  71. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  72. The Austrian arbitration act does not expressly regulate whether dissenting opinions are permitted or not. In the context of enforcement, the Austrian Supreme Court has acknowledged that dissenting opinions are permissible under the ICC Rules, but taken the view that such a dissenting opinion does not form part of an award, and does therefore not need to be produced in enforcement proceedings.

  73. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  74. Section 606 determines the form requirements and minimum content of an enforceable award:

    • the award has to be in writing;
    • the award must be signed by the arbitrators (if an arbitrator refuses to sign the award or is otherwise not able to sign it, the signature of the other arbitrators will be sufficient provided that the reasons for the lack of the arbitrator’s signature are given);
    • the award must generally state the date when it was made; and
    • unless agreed otherwise by the parties, the award shall state the reasons.
  75. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  76. Austrian law does not impose any time limits on the arbitrators to render an award. The parties are free to specify a time limit for the rendering of the award in their arbitration agreement.

    As provided by section 611 (4), upon receipt of the award by the claimant, the parties have three months to file a challenge of the award with the Austrian courts.

    Unless the parties have agreed on any other period of time, they may request the arbitral tribunal within four weeks after receipt of the award to correct any clerical, typographical or computation errors; or to give an interpretation of specific parts of the award, if so agreed by the parties; and/or to make an additional award as for claims asserted but not covered in the award.

    Costs and interest

  77. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the 'loser pays' rule generally apply in your jurisdiction?

  78. The parties are entitled to request the reimbursement of their ‘reasonable ‘ costs incurred in the arbitration. After the termination of the proceedings the arbitral tribunal will decide on the allocation of those costs in the award or in a separate order. Section 609 ZPO emphasies the arbitral tribunal’s discretion to decide upon cost matters; typically, the tribunal will consider the circumstances of the individual case and the outcome of the proceedings.

    Does the ‘loser pays ‘ rule generally apply in your jurisdiction?

    In state court litigation, the allocation of legal costs follows the principle of result liability. The allocation of costs depends on the ultimate success of a party in the proceedings, rather than success with respect to particular issues. This means that a party that succeeds in full on liability, but only with 50 per cent of its quantum, will have no claim for costs (because its own claim, based on the ultimate outcome, is 50 per cent of costs and will be offset against the other side’s equally large 50 per cent claim). International arbitrators will rarely apply this rule strictly, and will more typically adopt a more discretionary approach.

  79. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  80. Interest can be included in the award; from the perspective of Austrian law, application and rate of interest are perceived as matters of applicable substantive law.

    Absent the parties’ agreement, Austrian substantive law provides for legal interest of 4 per cent (section 1000 Civil Code) for regular contractual relationships, and an increased rate of 8 per cent above the base rate for commercial transactions (section 352 of the Companies Code). In a recent decision, the Austrian Supreme Court held that a daily interest rate of 0.2 per cent (equating to 73 per cent per annum) would be excessively high and would therefore violate Austrian public policy.

    Challenging awards

  81. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  82. Section 611 (2) No. 1 to 8 ZPO provides an exhaustive list of grounds for challenge, which follows article 34 of the Model Law.

    Upon application of a party, an award shall be set aside if:

    • a valid arbitration agreement does not exist, or if the arbitral tribunal denied its jurisdiction even though a valid arbitration agreement did exist, or if the party, under the respective applicable law [Personalstatut], was incapable of concluding a valid arbitration agreement;
    • a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case;
    • the arbitral award deals with a dispute not falling into the terms of the arbitration agreement, or contains decisions on matters which are beyond either the scope of the arbitration agreement or the submission of the parties to arbitration;
    • the constitution or composition of the arbitral tribunal is not in accordance with the law or the arbitration agreement
    • the conduct of the arbitration proceedings violated Austrian public policy;
    • the requirements under which a judgement of a state court can be appealed pursuant to section 530 (1) No. 1 to 5 are fulfilled;
    • the matter in dispute is not arbitrable; or
    • the arbitral award violates Austrian public policy.

    Points seven and eight shall also be observed ex officio.

  83. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  84. There are no other grounds for a challenge.

    However, under section 612, each party can request a declaratory judgement regarding the existence or non-existence of an arbitral award. The applicant has to demonstrate a legal interest in such a decision, for example if it is unclear whether the ‘award ‘ is really an award or an procedural order.

  85. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  86. The grounds for challenging an award cannot be waved in advance. The Austrian Supreme Court recognises the effectiveness of a waiver only after the award was issued and the grounds for setting aside known to the parties.

    Enforcement in your jurisdiction

  87. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  88. The Austrian Supreme Court acknowledged that the unsuccessful challenge of an award in the state of origin does not exclude the possibility of refusing enforcement in the enforcing country. Conversely, although specific case law is absent, it is argued that an award set aside in the country of origin may still be enforced in the country of enforcement.

  89. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  90. There are no specific trends to report.

  91. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  92. Austrian law allows the execution against the commercial assets of a foreign state in its jurisdiction, as long at is based on a valid legal title. Thus, the successful party in an arbitration against a state can request the execution against funds held by the foreign state for commercial purposes on Austrian territory.

    On 14 September 2006, Austria ratified the UN Convention on Jurisdictional Immunities of States and Their Property adopted on 2 December 2004 (which has not yet entered into force).

    Further considerations

  93. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  94. Austrian arbitration law does not contain a specific rule protecting the confidentiality of arbitral proceedings. Arbitral proceedings are held in camera, third parties are thus not permitted to gain access to hearings; it is more controversial whether there is an implied duty of confidentiality. Given a degree of uncertainty, parties are advised to conclude an express confidentiality agreement either in a separate contract, the main contract, the arbitration agreement or by selecting specific arbitration rules.

  95. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  96. See question 47.

  97. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  98. Austrian lawyers, who are admitted to the Austrian bar, are subject to the Professional Code of Conduct for Lawyers, which does not apply to foreign lawyers acting in Austria as counsel in international arbitration. There do not exist specific ethic rules for arbitrators under Austrian law.

  99. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?
  100. As elsewhere, much more depends on the choice of arbitrator than the choice of seat. Austria, in particular following the 2006 reform, is a modern forum that provides arbitrators with significant discretion to conduct the proceedings. Parties choosing internationally experienced arbitrators can therefore expect arbitrations that follow international practices; parties choosing arbitrators with more domestic exposure may still find that their arbitrations resemble Austrian state court proceedings.

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GAR know-how provides reliable cross-jurisdictional insight to help cement the building blocks of international practice. In this section, select experienced practitioners answer commonly-asked questions for key jurisdictions so allowing readers to be better-placed to solve the challenges of their working days.

Questions

    Infrastructure

  1. 1.The New York Convention
    Is your state a party to the New York Convention? Are there any noteworthy declarations or reservations?
  2. 2.Other treaties
    Is your state a party to any other bilateral or multilateral treaties regarding the recognition and enforcement of arbitral awards?
  3. 3.National law
    Is there an arbitration act or equivalent and, if so, is it based on the UNCITRAL Model Law? Does it apply to all arbitral proceedings with their seat in your jurisdiction?
  4. 4.Arbitration bodies in your jurisdiction
    What arbitration bodies relevant to international arbitration are based within your jurisdiction? Do such bodies also act as appointing authorities?
  5. 5.Foreign institutions
    Can foreign arbitral providers operate in your jurisdiction?
  6. 6.Courts
    Is there a specialist arbitration court? Is the judiciary in your jurisdiction generally familiar with the law and practice of international arbitration?
  7. Agreement to arbitrate

  8. 7.Formalities
    What, if any, requirements must be met if an arbitration agreement is to be valid and enforceable under the law of your jurisdiction? Can an arbitration agreement cover future disputes?
  9. 8.Arbitrability
    Are any types of dispute non-arbitrable? If so, which?
  10. 9.Third parties
    Can a third party be bound by an arbitration clause and, if so, in what circumstances? Can third parties participate in the arbitration process through joinder or a third-party notice?
  11. 10.Consolidation
    Would an arbitral tribunal with its seat in your jurisdiction be able to consolidate separate arbitral proceedings under one or more contracts and, if so, in what circumstances?
  12. 11.

    Groups of companies
    Is the 'group of companies doctrine' (or any other basis for piercing the corporate veil) recognised in your jurisdiction?


  13. 12.Separability
    Are arbitration clauses considered separable from the main contract?
  14. 13.Competence-competence
    Is the principle of competence-competence recognised in your jurisdiction? Can a party to an arbitration ask the courts to determine an issue relating to the tribunal’s jurisdiction and competence?
  15. 14.Drafting
    Are there particular issues to note when drafting an arbitration clause where your jurisdiction will be the seat of arbitration or the place where enforcement of an award will be sought?
  16. 15.Institutional arbitration
    Is institutional international arbitration more or less common than ad hoc international arbitration? Are the UNCITRAL Rules commonly used in ad hoc international arbitrations in your jurisdiction?
  17. 16.Multi-party agreements
    What, if any, are the particular points to note when drafting a multi-party arbitration agreement with your jurisdiction in mind? In relation to, for example, the appointment of arbitrators.
  18. Commencing the arbitration

  19. 17.Request for arbitration
    How are arbitral proceedings commenced in your jurisdiction? Are there any key provisions under the arbitration laws of your jurisdiction relating to limitation periods of which the parties should be aware?
  20. Choice of law

  21. 18.Choice of law
    How is the substantive law of the dispute determined? Where the substantive law is unclear, how will a tribunal determine what it should be?
  22. Appointing the tribunal

  23. 19.Choice of arbitrators
    Does the law of your jurisdiction place any limitations in respect of a party’s choice of arbitrator?
  24. 20.Foreign arbitrators
    Can non-nationals act as arbitrators where the seat is in your jurisdiction or hearings are held there? Is this subject to any immigration or other requirements?
  25. 21.Default appointment of arbitrators
    How are arbitrators appointed where no nomination is made by a party or parties or the selection mechanism fails for any reason? Do the courts have any role to play?
  26. 22.Immunity
    Are arbitrators afforded immunity from suit under the law of your jurisdiction and, if so, in what terms?
  27. 23.Securing payment of fees
    Can arbitrators secure payment of their fees in your jurisdiction? Are there fundholding services provided by relevant institutions?
  28. Challenges to arbitrators

  29. 24.Grounds of challenge
    On what grounds may a party challenge an arbitrator? How are challenges dealt with in the courts or (as applicable) the main arbitration institutions in your jurisdiction? Will the IBA Guidelines on Conflicts of Interest in International Arbitration generally be taken into account?
  30. Interim relief

  31. 25.

    Types of relief
    What main types of interim relief are available in respect of international arbitration and from whom (the tribunal or the courts)? Are anti-suit injunctions available where proceedings are brought elsewhere in breach of an arbitration agreement?


  32. 26.Security for costs
    Does the law of your jurisdiction allow a court or tribunal to order a party to provide security for costs?
  33. Procedure

  34. 27.

    Procedural rules
    Are there any mandatory rules in your jurisdiction that govern the conduct of the arbitration (eg, general duties of the tribunal and/or the parties)?


  35. 28.Refusal to participate
    What is the applicable law (and prevailing practice) where a respondent fails to participate in an arbitration?
  36. 29.Admissible evidence
    What types of evidence are usually admitted, and how is evidence usually taken? Will the IBA Rules on the Taking of Evidence in International Commercial Arbitration generally be taken into account?
  37. 30.Court assistance
    Will the courts in your jurisdiction play any role in the obtaining of evidence?
  38. 31.Document production
    What is the relevant law and prevailing practice relating to document production in international arbitration in your jurisdiction?
  39. 32.Hearings
    Is it mandatory to have a final hearing on the merits?
  40. 33.Seat or place of arbitration
    If your jurisdiction is selected as the seat of arbitration, may hearings and procedural meetings be conducted elsewhere?
  41. Award

  42. 34.Majority decisions
    Can the tribunal decide by majority?
  43. 35.Limitations to awards and relief
    Are there any particular types of remedies or relief that an arbitral tribunal may not grant?
  44. 36.Dissenting arbitrators
    Are dissenting opinions permitted under the law of your jurisdiction? If so, are they common in practice?
  45. 37.Formalities
    What, if any, are the legal and formal requirements for a valid and enforceable award?
  46. 38.Time frames
    What time limits, if any, should parties be aware of in respect of an award? In particular, do any time limits govern the interpretation and correction of an award?
  47. Costs and interest

  48. 39.

    Costs
    Are parties able to recover fees paid and costs incurred? Does the 'loser pays' rule generally apply in your jurisdiction?


  49. 40.Interest on the award
    Can interest be included on the principal claim and costs? Is there any mandatory or customary rate?
  50. Challenging awards

  51. 41.Grounds for appeal
    Are there any grounds on which an award may be appealed before the courts of your jurisdiction?
  52. 42.Other grounds for challenge
    Are there any other bases on which an award may be challenged, and if so what?
  53. 43.Modifying an award
    Is it open to the parties to exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
  54. Enforcement in your jurisdiction

  55. 44.Enforcement of set-aside awards
    Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
  56. 45.Trends
    What trends, if any, are suggested by recent enforcement decisions? What is the prevailing approach of the courts in this regard?
  57. 46.State immunity
    To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
  58. Further considerations

  59. 47.Confidentiality
    To what extent are arbitral proceedings in your jurisdiction confidential?
  60. 48.Evidence and pleadings
    What is the position relating to evidence produced and pleadings filed in the arbitration? Are these confidential? Is there any way that they might be relied on in other proceedings (whether arbitral or court proceedings)?
  61. 49.Ethical codes
    What ethical codes and other professional standards, if any, apply to counsel and arbitrators conducting proceedings in your jurisdiction?
  62. 50.Procedural expectations
    Are there any particular procedural expectations or assumptions of which counsel or arbitrators participating in an international arbitration with its seat in your jurisdiction should be aware?