The new Vienna International Arbitral Centre (VIAC) Rules of Arbitration and Mediation recently entered into force. They apply to all arbitration and mediation proceedings initiated after December 31 2017. The amendments to the VIAC rules allow for parties to conduct efficient and cost-effective arbitration and mediation proceedings, while offering enough flexibility when applying them in individual cases.
The Supreme Court recently considered whether proceedings (wrongly) commenced before an Austrian district court to set aside an arbitral award could nevertheless be continued. Notwithstanding the Supreme Court's exclusive jurisdiction regarding the setting aside of arbitral awards, the unusual facts of the case at hand led to the creation of an additional channel of appeals not provided for in the law.
The Vienna International Arbitral Centre (VIAC) recently obtained the right to administer domestic cases. The new law has received a warm welcome in Austria and is another sign of the quality of the VIAC's work and the confidence in its services. The VIAC has already established a working group to implement the proposed changes into the Rules of Arbitration and Conciliation in order to reflect this positive development.
The Supreme Court recently considered whether an arbitral award rendered in connection with licensing for the Austrian First Division Football League had to be set aside because of an alleged infringement of public policy. The decision is particularly interesting because the court had to tackle the sensitive issue of a possible infringement of substantive Austrian public policy in a situation where a party was forced to enter into an arbitration agreement with a dominant counterparty.
The Supreme Court recently considered if and under what circumstances defective reasoning of an arbitral award may lead to its annulment under the Arbitration Law. In a deviation from previous case law and views expressed by the majority of Austrian legal scholars, the court held that the requirement of sound reasoning is a fundamental principle of the Austrian legal system, and thus that an arbitrator's failure to comply with this constitutes a violation of procedural public policy.
In a recent decision the Supreme Court considered whether a lunch attended by a sole arbitrator and a party's counsel could give rise to doubts regarding the arbitrator's impartiality and independence. This decision serves as a reminder that arbitrators should disclose all circumstances that could give rise to a challenge and proceed with the utmost care when a challenge has been dismissed.
The Supreme Court recently considered several formal objections under the New York Convention, as well as several alleged grounds for refusal. The court adopted a rather strict approach with regard to the authentication requirement under the convention, while reiterating that the convention should generally be interpreted in favour of the recognition and enforcement of foreign awards.
The Supreme Court recently issued clear instructions that when it comes to the recognition and enforcement of foreign arbitral awards, Austrian law must not be applied where it is superseded by international treaties, such as the New York Convention. However, the convention contains no specific rules regarding the service of documents. Therefore, the decisive issue is whether national rules may nevertheless be applied in such a situation.
The Supreme Court recently considered, for the first time, the consequences of an arbitrator's failure to disclose circumstances that may give rise to doubts as to his or her impartiality and independence. In its decision, the court relied on both objective and subjective criteria – in particular, the weight of the non-disclosed fact and whether the non-disclosure was motivated by the arbitrator's desire to avoid a challenge.
A recent Supreme Court decision analysed whether parties to arbitral proceedings are still bound to pay for part of an arbitrator's services where the arbitrator is successfully challenged because of his or her conduct. The court held that, unless the work is found to be worthless, the arbitrator is entitled to receive remuneration.
The Supreme Court has ruled, for the first time, on the applicability of certain consumer protection laws in the context of corporate disputes and clarified the applicable law for assessing the capacity of a consumer when a foreign legal entity is involved. This decision makes clear that the Supreme Court will side with consumers in such cases.
The Supreme Court recently ruled for the first time on an issue that has been fiercely debated among legal scholars – namely, whether (and to what extent) grounds for challenging an arbitrator can also be raised in set-aside proceedings. The court ruled that where a challenge becomes known after the arbitration award was issued, only "blatant" grounds can be invoked in set-aside proceedings.
Following the revision of the Vienna Rules, another important development recently took place that is aimed at further increasing the attractiveness of Vienna as a venue for international arbitration. With the introduction of the Arbitration Amendment Act 2013, Parliament adopted a significant change to arbitration law in Austria, under which annulment claims will now be decided directly by the Supreme Court.
The Vienna International Arbitral Centre recently initiated a comprehensive review process aimed at modernising, overhauling and streamlining its rules. The process included a widely distributed user survey, a number of discussion rounds and a roadshow. The process is finally nearing completion and the centre is preparing to release the revisions publicly.
The Supreme Court recently clarified the relationship between state immunity and enforcement of an arbitral award in a case concerning art loaned by the Czech Republic to a Vienna museum for an exhibition. The Czech Republic argued that the works of art under dispute were cultural objects serving the country's sovereign aims, and thus exempt from enforcement proceedings. The Supreme Court rejected this defence.
The Supreme Court was recently faced with an inexecutable arbitration clause and clarified the interpretation of arbitration agreements and their boundaries. The court held that arbitration agreements must be interpreted primarily under procedural law; if an agreement refers to an arbitral institution which no longer exists, the agreement becomes inoperative only if it is impossible to reconstruct a comparable arbitration court.
The Vienna Commercial Court recently refused to set aside an arbitral award issued by a United Nations Commission on International Trade Law tribunal seated in Vienna that had awarded Danish-Polish Telecommunications Group €400 million against Telekomunikacja Polska. The court's decision is in line with the trend of Austrian case law to uphold arbitral awards.
The Supreme Court recently handed down a decision relating to the arbitrability of shareholder disputes in which it generally confirmed their arbitrability, but declared them to be subject to certain criteria. The decision is in line with the general approach to uphold arbitral awards taken by the Supreme Court since the introduction of the arbitration law. In fact, only in rare cases has the court set aside arbitral awards.
The Supreme Court has established an economic approach to the qualification of shareholders as consumers or entrepreneurs for the purposes of the Consumer Protection Act. This was consolidated by a new decision in which it ruled on whether a shareholder, holding 50% of the shares in a company and acting as managing director thereof, was to be considered a consumer for the purposes of consumer protection law.
In a recent case the Supreme Court was called on to decide whether an arbitral tribunal's disregard of Section 598 of the Code of Civil Procedure constitutes a violation of a party's right to be heard and justifies setting aside an award. According to Section 598, a tribunal is to hold a hearing at an appropriate stage of the proceedings if one party so requests and the parties did not previously agree to exclude the possibility of a hearing.