We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
27 January 2005
Arbitration in Austria is mainly governed by Chapter 6, Part 4 of the Civil Procedure Code. The law defines the limits of arbitration, for example the validity of arbitration agreements and the minimum standards for a fair trial. In addition, it provides procedural rules that apply in the absence of any arbitration agreement between the parties.
Austrian arbitration law is not currently based on the UN Commission on International Trade Law Model Law. However, a working group recently proposed draft legislation in order to adapt Chapter 6, Part 4 to the model law and provide an even better environment for arbitration.
Arbitration agreements can generally be concluded in all civil matters for either present or future disputes concerning a sufficiently determined legal relationship between the parties (Section 577(2) of the code). Exceptions include:
The arbitration agreement must be concluded in writing, although electronic data transmission such as email or fax fulfillls this requirement (Section 577(3) of the code). A reference to general business terms is insufficient, unless these documents are attached to the signed contract and there is a special reference to the arbitration clause in the contract. The signing of the arbitration agreement by agents or attorneys-at-law requires a special power of attorney.
The arbitrators can be freely chosen, but active judges must not accept appointment as arbitrators (Section 578 of the code). If there are no relevant rules in the arbitration agreement, each party must appoint one arbitrator. These two arbitrators then appoint a third person as chairman of the arbitral tribunal (Section 580 of the code).
If the parties fail to appoint an arbitrator or the arbitrators fail to appoint a chairman, the court will make the necessary appointments (Section 582(1) of the code).
At the Vienna International Arbitration Centre, the arbitrators can also be chosen by the parties under Article 5(1) of the centre's arbitration rules. The parties can agree on a sole arbitrator or an arbitral tribunal consisting of three arbitrators. A list of possible arbitrators is available to facilitate the search, but this list is not exhaustive. If the parties fail to choose arbitrators, they are appointed by the centre's board under Article 9 of the rules.
An arbitrator can be challenged for the same reasons as a judge, for example if he or she is closely related to one of the parties, or if there is sufficient reason to believe that he or she will act in a partisan way (Section 586(1) of the code).
The procedural rules are usually set by the arbitrators unless the parties have agreed otherwise. Austrian law provides only minimum standards of due process. By doing so, it stipulates that both parties must be heard and that the arbitrators must establish the relevant facts of the case. Default judgments are not permissible (Section 587 of the code).
In certain situations Austrian law expressly limits the power of the arbitrators. They may not apply coercive measures or impose fines against the parties or other persons, and they are not entitled to put any person under oath (Section 588 of the code). In addition, the arbitrators cannot force witnesses to appear before the arbitral tribunal.
Court intervention is very limited. The courts may assist the arbitrators where the latter's power is limited (eg, in issuing subpoenas to witnesses) (Section 589(1) of the code; Article XIII EGJN of the Introductory Act to the Jurisdiction Code).
Unless the arbitration agreement states otherwise, the arbitrators must make their decision by majority vote (Section 590 of the code).
Apart from these basic principles, the parties are free to agree on the procedural rules to be applied. This agreement may be part of the arbitration clause or, more commonly, may be entered into through a separate document which is often prepared by the arbitration panel. In the absence of an agreement between the parties, the arbitrators may decide on the applicable procedural rules at their own discretion. If the parties agree on the rules of a specific arbitration body, such as the International Chamber of Commerce International Court of Arbitration or the Vienna International Arbitration Centre, the procedural rules of that body apply.
The possibility of recovering the costs of the proceedings is subject to an agreement between the parties, which must be incorporated either in the arbitration agreement or in a separate document (eg, terms of reference). In the absence of such an agreement, the arbitration panel will rule on the recovery of costs and will usually follow the same guidelines as set out by the Civil Procedure Code for court litigation.
Arbitration courts are not entitled to grant interim or conservatory measures. Such a relief may be issued and executed by the state courts while the arbitration proceedings are pending. However, this situation is likely to be changed by the enactment of the new law on arbitration.
If the case is heard by more than two arbitrators they decide by absolute majority, unless the arbitration agreement contains any provisions to the contrary (Section 590 of the code). Austrian law does not stipulate a time limit for the delivery of the arbitral award. Under Section 592 of the code, the award must:
Arbitral awards are binding and enforceable. If no appellate proceedings are foreseen by the parties, they are also final. Upon the request of a party, this must be confirmed by the arbitrator or the chairman of the arbitral tribunal (Section 994 of the code).
Arbitration awards constitute effective titles of execution and are enforced by Austrian courts in the same way as judgments of state courts (Section 1(16) of the Enforcement Code). Foreign awards are enforceable according to the provisions of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Geneva Convention.
Arbitration awards can be set aside by state courts under specific circumstances set out in Article 595 of the Civil Procedure Code as follow:
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.