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What are the validity requirements for an arbitration agreement?
Substantively, Austrian law requires that an arbitration agreement identify the parties and clearly express their intention to submit a specific dispute to arbitration. The agreement can relate to both existing and future disputes, but must be made in relation to a pre-defined legal relationship.
Formally, an arbitration agreement must be in writing. This can be done in a written document signed by both parties or in letters, faxes, emails or other forms of communication that prove the existence of the agreement.
Also, Sections 617 and 618 Code of Civil Procedure stipulate certain formal requirements for arbitration agreements concluded with a consumer or in employment matters, including that the arbitration agreement itself must be a separate document and that a written notification is prepared, explaining the main differences between arbitral and court proceedings before concluding an arbitration agreement.
Enforcement of agreements
How are arbitration agreements enforced in your jurisdiction? What is the attitude of the national courts towards arbitration agreements?
For many years, Austrian courts have taken a pro-arbitration stance generally aimed at upholding the validity of arbitration agreements.
In contrast to other jurisdictions, Austrian law does not curtail the arbitral tribunal’s competence-competence. Thus, the state court before which an action is brought in a matter which is the subject of an arbitration agreement must reject the claim, unless the defendant makes submissions on the substance of the dispute or orally pleads before the court without making an according objection. This does not apply if the court establishes that the arbitration agreement does not exist or cannot be performed. While such proceedings are pending before a court, arbitral proceedings may nevertheless be commenced or continued and an award may be made (Code of Civil Procedure Section 584(1)). Similarly, while arbitral proceedings are pending, no further action may be brought before a court or an arbitral tribunal concerning the asserted claim (Code of Civil Procedure Section 584(3)).
Can an arbitral tribunal with its seat in your jurisdiction consolidate separate arbitral proceedings under one or more contracts, and, if so, in what circumstances?
Austrian law does not explicitly provide for the consolidation of arbitral proceedings. However, the parties and the arbitral tribunal can freely agree on consolidating proceedings.
The Vienna International Arbitral Centre Rules of Arbitration and Mediation (‘Vienna Rules’) specifically address the consolidation of proceedings. Article 15(1) of the Vienna Rules provides that two or more arbitral proceedings may be consolidated if the parties agree to the consolidation or the same arbitrators were appointed in all of the proceedings. In addition, the seat of arbitration needs to be the same in all of the arbitration agreements on which the claims are based.
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?
The parties are free to choose any statutory provisions or rules of law as substantive law of the dispute. Failing an explicit or implied choice by the parties, the arbitral tribunal shall apply the substantive law that it considers appropriate (Code of Civil Procedure Section 603). In deviation from the United Nations Commission on International Trade Law Model Law, Austrian arbitration law follows a voie directe approach, providing the arbitral tribunal with absolute flexibility when determining the applicable law. Typically, the arbitral tribunal will draw on accepted conflict of law rules, such as the centre of gravity test.
Are there any provisions on the separability of arbitration agreements?
Austria did not see the need to expressly include the separability doctrine in the 2006 revision of the Austrian arbitration law as the doctrine is accepted in both case law and academic writing. Thus, it is generally accepted that the invalidity of the main contract does not automatically render the arbitration agreement invalid.
Are multiparty agreements recognised?
While recognising multiparty agreements, Austrian law does not provide detailed regulations on multiparty proceedings; rather, it merely addresses the appointment of arbitrators in multiparty disputes. Section 587(5) of the Code of Civil Procedure sets out that if the parties fail to jointly nominate an arbitrator within four weeks, any party to the arbitration may request the court to appoint the arbitrator.
The Vienna Rules have more detailed provisions on multiparty proceedings, setting out rules as to the constitution of the arbitral tribunal in multiparty proceedings (Article 18), the advance on costs (Article 42) and the service of written submissions (Article 42).
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