Source: https://www.expertguides.com/articles/austrian-arbitration-act-cuts-short-proceedings-to-set-aside-arbitral-awards/austri14
Timestamp: 2020-02-22 22:16:51
Document Index: 772614242

Matched Legal Cases: ['§ 616', '§ 614', '§ 593', '§602', '§ 617', '§ 618', '§ 617', '§ 15']

Expert Guides - Austrian arbitration act cuts short proceedings to set aside arbitral awards
Austrian arbitration act cuts short proceedings to set aside arbitral awards
01/09/2014 Gerold Zeiler, Zeiler.partners, Austria
Effective 1 January 2014, all claims to set aside an arbitral award must be brought directly before the Austrian Supreme Court, which decides in first and last instance.
The new regulation is the result of the efforts of a private working group composed of academics and practitioners. In February 2012 a first ministerial draft bill has been issued by the Ministry of Justice. Due to lengthy negotiations, it took more than a year until the legislation was finally implemented into Austrian law.
The new framework for set-aside proceedings is almost unique in Europe – only Ireland and Switzerland have similar rules to challenge an arbitral award.
§ 616 of the Austrian Code of Civil Procedure (ACCP) now provides that the Austrian Supreme Court is the one and only instance which is competent to decide on claims to set-aside an arbitral award and on actions for the declaration of the existence and non-existence of an arbitral award. Also, for disputes arising out of the formation of the arbitral tribunal the Supreme Court is the competent venue. In the course of the formation of the arbitral tribunal the Supreme Court might deal with issues regarding the number of arbitrators as well as their appointment and challenge, the early termination of an arbitrator's mandate or the appointment of substitute arbitrators in ad-hoc proceedings. For the first time in history the Austrian Supreme Court will have to take evidence and, for that purpose, to apply the same procedural rules as Austrian trial courts. Accordingly, from now on, in such matters, the Supreme Court will determine issues of fact.
However, the amendments at hand do not touch the competence of the trial courts to decide about the recognition and enforcement of arbitral awards (§ 614 ACCP), to issue preliminary measures (§ 593(2) ACCP) or to assist arbitral tribunals according to §602 ACCP.
Also, the amendments do not apply to set-aside proceedings where consumers or employees are involved. According to § 617(8) ZPO and § 618 ZPO the trial courts in civil law matters have jurisdiction in consumer- and employment related challenging proceedings. Hence, such proceedings can pass three procedural levels (trial court, appellate court and Supreme Court). It is noteworthy that according to the Austrian Supreme Court, the question whether a person qualifies as consumer always must be assessed under Austrian law (if the arbitral tribunal has its seat in Austria). Further, the Supreme Court recently ruled (16.12.2013, 6 Ob 43/13m) that shareholders of a limited liability company (GmbH) with no influence on the management of the company must be considered as consumers and therefore § 617 ACCP (a provision to protect consumers in arbitral proceedings) is applicable to such types of shareholders as well.
In the course of the amendments the court fees for set-aside proceedings have been reduced. As of 1 January 2014 court fees for claims challenging an arbitral award amount to five per cent of the amount in dispute, with a minimum fee of EUR 5.000,-. The same court fees accrue for a decision about the existence or non-existence of an arbitral award.
Austrian law provides for a particular system in order to determine the amount in dispute in the previously mentioned cases: § 15 Court Fee Act (Gerichtsgebührengesetz) stipulates that, in principle, the amount in dispute in the arbitration, is also the decisive figure to determine the amount in dispute in set-aside proceedings. In case a challenge is based on the decision of an arbitral tribunal on its own jurisdiction the Claimant must determine the amount in dispute, in doubt the amount in dispute will be deemed to be EUR 4.000,-. In disputes regarding declaratory relief about the existence of an arbitral award the amount in dispute corresponds to the value of the subject matter.
On the contrary, in consumer- and employment related disputes court fees have not been reduced. Court fees for proceedings before the trial court amount to 1.2. per cent, for proceedings before the appellate court to 1.8 per cent and for proceedings before the Supreme Court to 2.4 per cent of the amount in dispute.
In a nutshell, Austria is now equipped with a modern and efficient regulatory framework for the annulment of arbitral awards. Set-aside proceedings can be very expensive though, and based on the general principle that costs follow the event, the loser pays the bill. As a result, a potential claimant will want to think twice and carefully consider the merits of his claim, before he initiates annulment proceedings.