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.
25 April 2019
Section 17 of the Arbitration Act requires the equal treatment of parties in arbitration proceedings. Over the past year, the extent of this procedural safeguard has been tested before the Slovak courts, which seem to have avoided an extensive interpretation of this provision when reviewing awards.(1)
In a recent decision, the Supreme Court noted, albeit obiter, that a breach of equal treatment must be limited to circumstances where a party is not given the same opportunity to submit statements, evidence and replies to statements and evidence submitted by the other party. In other words, unequal treatment constitutes only a breach of the adversarial or equality of arms principles.(2)
A dispute arose where the defendant was a company and the co-defendant was the company's executive director as an individual. The statement of claim was delivered to the company and not to the executive director. The executive director and the company responded in a joint statement. After losing the arbitration, the executive director filed a petition to have the award set aside on the grounds of a violation of the equal treatment principle.
The appeal court disagreed because the executive director had been aware of the proceedings. The joint statement by the director and the company was sufficient evidence that the executive director had been given the same opportunity to submit statements and effectively participate in the proceedings. Therefore, the court ruled that the equal treatment principle had not been breached, even though the statement of claim had not been formally delivered to the director.(3)
In another dispute, the losing party argued that a tribunal's refusal to hold a hearing and hear witnesses violated the equal treatment principle. The arbitration rules referred to in the arbitration agreement empowered the tribunal to decide whether to hold a hearing.
The appeal court found that a hearing is an option and not a rule under the Arbitration Act. The mere fact that a tribunal refuses to hold an oral hearing does not automatically amount to a violation of the equal treatment principle. A requesting party's grounds for an oral hearing must be assessed, taking into account the stage of the proceedings. The court concluded that the tribunal in the case at hand had been empowered to decide whether to hold a hearing and had sufficiently explained why it did not consider witness evidence necessary to decide the matter.(4)
The court distinguished this case from a previous case in which it had found that a failure to hold a hearing despite a party's request had violated the equal treatment principle. In the previous case:
Before the Arbitration Act was amended in 2015 (ie, concurrent to the arbitration proceedings in this case), it stated that an arbitral tribunal must hold hearings at an appropriate stage in the proceedings if so requested by a party. The amendment has made it explicit that this rule is subject to parties' agreement. Nevertheless, the appeal court's decision is still relevant because it gives tribunals the confidence to conduct proceedings efficiently and combat potential guerrilla tactics, provided that the tribunal is empowered to do so by an arbitration agreement or selected rules.
Since the amendment, a violation of the equal treatment principle is not listed as special grounds for setting an award aside. However, such a violation could still be covered by:
For further information on this topic please contact Matej Kosalko at Allen & Overy LLP Bratislava sro by telephone (+421 2 5920 2400) or email (firstname.lastname@example.org). The Allen & Overy LLP Bratislava sro website can be accessed at www.allenovery.com.
(1) This article is part of a series that examines whether Slovakia has become an arbitration-friendly jurisdiction. For the first article in the series, please see "Has Slovakia become an arbitration-friendly jurisdiction?".
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.