In brief: arbitration formalities in Austria

Arbitration

Is the arbitration law based on the UNCITRAL Model Law?

Yes – the Austrian Arbitration Act (contained in the Austrian Code of Civil Procedure (ACCP)) substantially reflects the UNCITRAL Model Law on International Commercial Arbitration, while granting a great degree of independence and autonomy to the arbitral tribunal.

Unlike the UNCITRAL Model law, Austrian law does not distinguish between domestic and international arbitrations, or between commercial and non-commercial arbitrations. Special provisions apply to employment and consumer-related matters (these are found under sections 618 and 617 ACCP, respectively).

More generally, the Austrian Arbitration Act is contained in sections 577 to 618 ACCP. They provide the general framework for arbitration proceedings for both domestic and international arbitrations.

What are the formal requirements for an enforceable arbitration agreement?

Arbitration agreements must be in writing (section 581 ACCP). The formal requirements for an enforceable arbitration agreement are found under sections 581 to 585 ACCP.

An arbitration agreement must:

• sufficiently specify the parties (they must be at least determinable);
• sufficiently specify the subject matter of the dispute in relation to a defined legal relationship (this must at least be determinable and it can be limited to certain disputes, or include all disputes);
• sufficiently specify the parties’ intent to have the dispute decided by arbitration, thereby excluding the state courts’ competence; and
• be contained in either a written document signed by the parties or in telefaxes, emails or other communication exchanged between the parties, which preserve evidence of a contract.

Special provisions apply to consumers and employees (these are found under sections 617 and 618 ACCP respectively).

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

The ACCP provides for default provisions for the appointment of arbitrators. If the arbitration agreement is silent on the matter and absent an agreement by the parties, the Austrian arbitration law provides for a tribunal consisting of three arbitrators (section 586(2) ACCP).

The parties are free to agree on the procedure for challenging the appointment of an arbitrator (section 589 ACCP). In this regard, an arbitrator may only be challenged if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence, or if he or she does not possess the qualifications agreed upon by the parties. A party may challenge an arbitrator appointed by it, or in whose appointment it has participated, only for reasons of which it becomes aware after the appointment has been made, or after its participation in the appointment.

What are the options when choosing an arbitrator or arbitrators?

Whether designated by an appointing authority or nominated by the parties, arbitrators may be required to have a certain experience and background regarding the specific dispute at hand. Such requirements may include professional qualifications in a certain field, legal proficiency, technical expertise, language skills or being of a particular nationality.

Many arbitrators are attorneys in private practice; others are academics. In a few disputes, concerning mainly technical issues, technicians and lawyers are members of the panel.

Qualification requirements can be included in an arbitration agreement, which requires great care as it may create obstacles in the appointment process (ie, an argument about whether the agreed requirements are fulfilled).

Does the domestic law contain substantive requirements for the procedure to be followed?

The parties are free to agree on the rules of procedure (eg, by reference to specific arbitration rules) within the limits of the mandatory provisions of the ACCP. Where the parties have not agreed on any set of rules, or set out rules of their own, the arbitral tribunal will, subject to the mandatory provisions of the ACCP, conduct the arbitration in such a manner as it considers appropriate.

Mandatory rules of arbitration procedure include that the arbitrators must be, and remain, impartial and independent. They must disclose any circumstances likely to give rise to doubts about their impartiality or independence. The parties have the right to be treated in a fair and equal manner, and to present their case. Further mandatory rules concern the arbitral award, which must be in writing, and the grounds on which an award can be challenged.

Further, an arbitral tribunal must apply the substantive law chosen by the parties, failing which it will apply the law that it considers appropriate.

On what grounds can the court intervene during an arbitration?

Austrian courts may only intervene in arbitration matters when they are expressly permitted to do so under sections 577 to 618 ACCP. Both the competent court and an arbitral tribunal have jurisdiction to grant interim measures in support of arbitration proceedings. The parties can exclude the arbitral tribunal’s competence for interim measures, but they cannot exclude the court’s jurisdiction on interim measures.

The enforcement of interim measures is in the exclusive jurisdiction of the courts.

The intervention of courts is limited to the issuance of interim measures, assistance with the appointment of arbitrators, review of challenge decisions, decision on the early termination of an arbitrator’s mandate, enforcement of interim and protective measures, court assistance with judicial acts that the arbitral tribunal does not have the power to carry out, decision on an application to set aside an arbitral award, determination of the existence or non-existence of an arbitral award and recognition and enforcement of awards.

Do arbitrators have powers to grant interim relief?

Yes – an arbitral tribunal has wide powers to order interim measures on the application of one party if it deems it necessary to secure the enforcement of a claim or to prevent irretrievable harm. In contrast to the interim remedies available in court proceedings, an arbitral tribunal is not limited to a set of enumerated remedies. However, the remedies should be compatible with enforcement law to avoid difficulties at the stage of enforcement. In this regard, the arbitral tribunal may request any party to provide appropriate security in connection with such measures to prevent frivolous requests (section 593(1) ACCP).

The arbitral tribunal − or any party with the approval of the arbitral tribunal − may request a court to perform judicial acts (eg, service of summons or taking of evidence) for which the arbitral tribunal does not have the authority.

When and in what form must the award be delivered?

The form requirements for arbitral awards are found under section 606 ACCP and are in line with default provisions. The form requirements stipulate that the arbitral award must:

• be in writing;
• be signed by the arbitrators involved in the proceedings;
• display its date of issuance;
• display the seat of arbitral tribunal; and
• state the reasons upon which it is based. The arbitral award has the effect of a final and binding court judgment (section 607 ACCP).

On what grounds can an award be appealed to the court?

The only available recourse to a court against an arbitral award is an application to set aside the award. This also applies to arbitral awards on jurisdiction. Courts may not review an arbitral award on its merits. The application to set aside is to be filed within three months from the date on which the claimant has received the award. There are no appeals against an arbitral award.

An arbitral award shall be set aside if:

• no valid arbitration agreement exists or if the arbitral tribunal denied its jurisdiction even though a valid arbitration agreement existed;
• a party 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 the case;
• the arbitral award deals with a dispute that is not covered by the arbitration agreement or contains decisions on matters beyond the scope of the arbitration agreement or the submission of the parties to arbitration;
• the constitution or composition of the arbitral tribunal was in violation of the respective rules; and
• the arbitration proceedings were conducted in violation of Austrian public policy.

Furthermore, an award can be set aside if the preconditions exist under which a court judgment can be appealed by filing a complaint for revision pursuant to section 530(1), Nos. 1–5 ACCP. This provision determines circumstances under which criminal acts led to the issuance of a certain award. An application to set aside an award on these grounds must be filed within four weeks of the date on which the sentence on the respective criminal act became final and binding.

An award may also be set aside if the matter in dispute is not arbitrable under domestic law.

What procedures exist for enforcement of foreign and domestic awards?

The procedure for the enforcement of arbitral awards is set out in both the ACCP (section 614) and the Austrian Enforcement Act (section 409).

Foreign arbitral awards are enforceable on the basis of bilateral or multilateral treaties that Austria has ratified – the most important of these legal instruments being the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards 1958 and the European Convention on International Commercial Arbitration of 1961. In this regard, enforcement proceedings are essentially the same as for foreign judgments.

Domestic arbitral awards are enforceable in the same way as domestic judgments.

Can a successful party recover its costs?

With respect to costs, arbitral tribunals have broader discretion and are, in general, more liberal than courts. The arbitral tribunal is granted discretion in the allocation of costs but must take into account the circumstances of the case, in particular, the outcome of the proceedings. As a rule of thumb, costs follow the event and are borne by the unsuccessful party, but the tribunal can also arrive at different conclusions if this is appropriate to the circumstances of the case.

The ACCP is silent on the type of costs that might be subject to reimbursement. Where costs are not set off against each other, as far as possible the arbitral tribunal must, at the same time as it decides on the liability for costs, also determine the amount of costs to be reimbursed. In general, attorneys’ fees calculated on the basis of hourly rates are also recoverable.

An exception to the above rule is found under section 609(2) ACCP, which empowers the arbitral tribunal to decide upon the obligation of the claimant to reimburse the costs of the proceedings if it has found that it lacks jurisdiction on the grounds that there is no arbitration agreement.