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19 May 2005
In April 2005 the government finalized draft legislation that will substantially amend the Austrian arbitration law by bringing it into line with the UN Commission on Trade Law (UNCITRAL) Model Law on International Commercial Arbitration. However, unlike the UNCITRAL Model Law the draft legislation will be applicable not only to international commercial arbitration, but also to domestic commercial and non-commercial arbitration. Thus, the draft law also includes several provisions concerning consumer protection.
Although the new law follows the UNCITRAL Model Law closely, there are some alterations that merit attention.
While the draft legislation generally follows the UNCITRAL Model Law, it differs regarding the concept of separability. Article 16(1) of the UNCITRAL Model Law, which contains the separability provisions, will not be introduced, and it will be for the courts to rule on this issue by applying general legal principles. It remains to be seen whether, from a practical point of view, this will make any difference.
Unlike the UNCITRAL Model Law, the draft law does not allow for an even number of arbitrators. This does not mean that the parties cannot agree on an even number. However, if they do so, the arbitrators appointed by the parties will have to elect a further person as their chairperson. In the end, an odd number of arbitrators will always conduct the proceedings and make the award. This has not been the case in the past, and experience suggests that this change is for the better.
The UNCITRAL Model Law does not deal with issues involving the appointment of arbitrators arising as a result of there being more than two parties involved in an arbitration. The working group that prepared the draft law looked for a solution and followed the French model, set out by Article 1494 of the New Code of Civil Procedure. This states that if the parties on one side of the arbitration (either as claimants or as respondents) are not bound to agree on one person as an arbitrator, and are unable to agree on an arbitrator, all arbitrators for the case will be appointed by the court. This means that all parties involved lose their right to appoint an arbitrator, but no one party is discriminated against.
Unlike the current provisions on arbitration, the new law will allow the arbitral tribunal to order interim measures. The respective provisions are broadly in line with those set out in the UNCITRAL Model Law. However, ex parte measures will not be admissible if the seat of arbitration is in Austria. In addition, the Austrian courts will not enforce ex parte measures if the seat of arbitration is abroad. The state courts will continue to have jurisdiction to order interim measures, even while arbitral proceedings are pending.
The new law is expected to come into force on January 1 2006.
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