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.
Two relevant questions of Austrian law were recently raised in a dispute between an Austrian distributor and a US company. The first question was whether an arbitration agreement remains valid when it provides for arbitration abroad in a case in which Austrian mandatory rules may govern the merits of the dispute; the second was whether interim measures can be granted to ensure the enforcement of awards rendered abroad.
The Austrian Supreme Court recently addressed for the first time some of the uncertainties surrounding the relevance of Section 617 of the Code of Civil Procedure in enforcement proceedings. Section 617 of the code was introduced by the Arbitration Act in 2006 and contains several provisions intended to protect consumers from becoming involved in arbitral proceedings.
A US and a Cypriot party applied for the recognition and enforcement in Austria of an arbitral award made in the United Kingdom in proceedings conducted under the London Court of International Arbitration Rules. The Supreme Court had to deal with the question of whether all the formal requirements for the enforcement of the award had been fulfilled.
In a recent decision the Supreme Court was asked to set aside an award rendered by an ad hoc tribunal deciding a dispute between Austria and several private persons, who were the heirs of the former owners of Gustav Klimt’s portrait of Amalie Zuckerkandl. The heirs sought to set aside an award which denied their claim for the picture's restitution. The Supreme Court denied the challenge.
As under the United Nations Commission on International Trade Law Model Law, under Austrian law parties are free to agree on a procedure for the appointment of arbitrators. Therefore, parties may agree on an appointment procedure other than the one stipulated in Section 587(2) of the Code on Civil Procedure.
The enactment of the new Arbitration Act resulted in a number of changes to the Austrian arbitration law landscape. These include a relaxation of the formal requirements of an arbitration agreement, the option to remedy formal defects and the option to set aside awards on jurisdiction.
Traditionally, scholars have held the relationship between the parties and the arbitrator to be a matter of public law and have rejected the idea of a contractual relationship. At first glance, this approach may seem to accord with the wording of the latest Arbitration Act. However, a closer look reveals that this relationship may in fact be governed by aspects of both public and contractual law.
In a recent decision the Supreme Court had to decide whether an arbitration clause contained in a contract for the carriage of goods conformed with Article 33 of the Convention on the Contract for the International Carriage of Goods by Road. Although the Supreme Court took a rather strict approach to the convention's requirements, its decision was not unreasonable.
As a result of the entry into force of the new Austrian arbitration legislation last year, the Rules of Arbitration of the Vienna International Arbitral Centre of the Austrian Federal Economic Chamber needed to be updated in order to bring them into line with the new law. The amended Vienna Rules 2006 apply to all arbitration proceedings in which the claim was filed after June 30 2006.
In a recent decision the Higher Regional Court of Vienna held that an arbitration agreement is a procedural contract for whose interpretation procedural law should be consulted in the first instance. This view allows for the consideration of both the parties' joint intentions when concluding the arbitration agreement and the principles of fair dealing.
In a case in which a Spanish company sought to enforce the decision of an International Chamber of Commerce arbitral tribunal against an Austrian company, the Supreme Court has provided clarity in respect of the practical issues which may arise in the course of attempting to enforce such an award.
The new Arbitration Law, which came into force on July 1 2006, does not explicitly recognize the concept of separability. In fact, it does not deal with this principle in any of its detailed provisions. Therefore, case law must be considered in order to establish the separability of an arbitration clause where the main contract is declared invalid.
In a recent case the Supreme Court reaffirmed the conclusiveness of form requirements set out in Article 2 of the New York Convention. It imposed the burden of proof for the alleged invalidity of an arbitration agreement on the party opposing enforcement.
The Supreme Court has ruled that a provision in an arbitration agreement which entrusts a single party with the appointment of a substitute chairman is contrary to good morals. The court also pointed out that the resignation of an arbitrator does not render the entire arbitration clause invalid, but leads only to the arbitrator's replacement.
The Supreme Court recently ruled on the enforceability of an arbitral award that had been rendered in Serbia and Montenegro in order to resolve a dispute arising from a purchase contract. It held that, in the event of there being several relevant enforcement treaties that exist in parallel, the creditor may invoke any of these treaties to support enforcement of the award.
The government has finalized draft legislation that will substantially amend Austrian arbitration law by bringing it into line with the United Nations Commission on Trade Law Model Law on International Commercial Arbitration. However, unlike the Model Law, the new law will be applicable to both international and national arbitration.
The Supreme Court has confirmed that the law of the place of arbitration must be applied in cases where the validity of the arbitration clause is disputed, and where there is no agreement between the parties as to the applicable law.
Including: Legal Framework; Award and Enforcement; Annulment of Awards.