i The Austrian Arbitration Act: history, scope and application
Austria has a long-standing history of arbitration; the first legal provisions in the Austrian Code of Civil Procedure (ACCP) on arbitral proceedings date back to 1895. In 2006, the legislator adopted the Arbitration Amendment Act 2006,2 thereby modernising the arbitration provisions mostly based upon the UNCITRAL Model Law on International Commercial Arbitration (the Model Law). Although the legislator also maintained certain provisions of the old law (e.g., Section 594(4) on the liability of arbitrators), it is fair to state that Austria considers itself to be a Model Law country. The Arbitration Amendment Act 20133 introduced a major revision to the court system with respect to arbitration-related matters (see subsection v, below). Despite the term 'Arbitration Act', the Austrian arbitration law is contained in Sections 577 to 618 ACCP.
Pursuant to Section 577 ACCP, the Arbitration Act is not only applicable if the seat of arbitration is in Austria (Section 577(1) ACCP), but also in certain instances where the seat is not in Austria or has not yet been determined (Section 577(2) ACCP). Thereby, Austrian courts assume jurisdiction in arbitration matters even when the seat is not (yet) determined to be in Austria. This is the case in particular where a claim is brought despite an existing arbitration agreement (Section 584 ACCP), where interim measures are sought (granting or enforcement, or both, by Austrian state courts: see Sections 585 and 593 ACCP) and in other cases of judicial assistance (Section 602 ACCP).
ii Arbitration agreements
The definition of arbitration agreement under Austrian law (Section 581(1) ACCP) resembles that of Article 7 Model Law. Thus, an arbitration agreement may be a separate agreement or a clause contained in a main contract. Both contractual and non-contractual disputes may be subject to arbitration. The jurisprudence (which is confirmed by legal literature) derives from this provision that the following three requirements must be fulfilled for an agreement to qualify as an arbitration agreement under the law: the determination of the parties to the dispute, the subject matter of the dispute that is submitted to arbitration (which can be a certain dispute or all disputes arising out of a certain legal relationship) and an agreement to arbitrate.
Furthermore, Subsection (2) of Section 581 ACCP provides that an arbitration agreement may also be included in 'statutes' – that is, the articles of association of legal entities such as companies or associations – as well as in a testament.
Regarding the form of the arbitration agreement, Austrian law still requires the written form (Section 583(1) ACCP). However, this does not necessarily mean that the arbitration agreement must be signed by both parties: an 'exchange of letters, telefaxes, emails or other means of communications which provide a record of the agreement' also suffice. Apart from the provision in the ACCP, it is generally accepted that Article II of the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) is a uniform substantive provision in an international context. Thus, the fulfilment of this uniform standard takes precedence over any stricter requirements under national law.4
Section 582(1) ACCP defines the arbitrability ratione materiae of claims as follows: claims of an economic or financial interest that fall within the jurisdiction of the ordinary civil courts; and claims without any economic or financial interest, but for which parties may conclude a settlement agreement. Pursuant to Subsection (2), the following claims may not be subject to arbitration: claims in family law matters and certain claims related to housing law.
Although this is not a question of arbitrability in the narrow sense of the law, matters of employment law (Section 618 ACCP) or concerning consumers (Section 617 ACCP) are subject to very strict limitations and are thus dealt with under this heading. The requirements are essentially the same for both kinds of persons (consumers and employees), and can be summarised as follows:
- an arbitration agreement with a consumer or employee can only be validly concluded after the dispute has arisen;
- b the arbitration agreement must be contained in a separate document signed by the consumer or employee in person. Such document may not contain any agreements other than those relating to the arbitration proceedings;
- prior to the conclusion of the arbitration agreement, the consumer or employee shall receive a written instruction on the major differences between arbitration and litigation before state courts;
- determination of the seat of arbitration and other requirements as to the venue of the hearing;
- the seat of arbitration must be at the place of domicile of the consumer or employee unless it is the consumer or employee who relies on a seat outside of his or her place of domicile;
- further grounds for setting aside; and
- a three-instance system for setting aside claims.
In conclusion, it is very unlikely that an arbitration agreement with a consumer or an employee is validly concluded in compliance with the above-indicated requirements. Moreover, it should be noted that in arbitration proceedings where individuals are involved, one side might invoke the objection that the individual must be considered as a consumer under the Austrian Arbitration Act, and that the arbitral award thus runs the risk of being set aside for this reason.
iv Appointment and challenge of arbitrators
Sections 586 and 587 ACCP stipulate that the parties are free to determine the number of arbitrators and the procedure for appointing them. Absent any agreement of the parties (in particular any agreement on institutional rules) or if the parties agree on an even number, the number of arbitrators shall be three.
Section 587 ACCP stipulates the default procedure for appointing arbitrators if the parties have not reached agreement on their own procedure. Where a party fails to appoint an arbitrator, or the parties fail to jointly nominate a sole arbitrator or a chairperson, it is the Austrian Supreme Court that acts as appointing authority (see Section 615 ACCP). It is noteworthy that in multi-party proceedings, where several parties on one side, despite an obligation to do so, fail to jointly appoint their arbitrator, either party may ask the Court to step in for the failing side, but not for the side that has timely appointed its arbitrator (see Subsection (5)). Section 587(6) ACCP is a catchall provision that applies if, for any reason whatsoever, an arbitrator is not appointed within 'a reasonable period of time'.
Sections 588 and 589 ACCP govern the challenge of arbitrators in accordance with Articles 12 and 13 of the Model Law. Thus, a prospective arbitrator has a duty to disclose any circumstances giving rise to doubts as to his or her impartiality or independence. The arbitrator also has the duty to remain impartial and independent throughout the proceedings. Unless the parties have agreed on a certain procedure of challenging arbitrators (in particular by agreement on a set of arbitration rules), Section 589(2) ACCP provides for a default procedure. Irrespective of whether there is an agreed procedure of challenge or the default procedure applies, the challenging party may request the Supreme Court to decide on the challenge if it was not successful.
In recent decisions of the Supreme Court, the question of whether a violation of the arbitrator's duty to disclose may constitute a ground for successful challenge has arisen. The Court has confirmed this question in cases where the arbitrator has failed to disclose in a culpable way ('very extreme cases'). In those decisions, the Supreme Court also explicitly referred to the IBA Guidelines on Conflicts of Interest in International Arbitration as the common international standard.5
v The court system
Since the revision of the Arbitration Act in 2013, Section 615 ACCP provides that the first and final court instance to rule on setting aside claims (Section 611 ACCP) and for claims on the declaration of the existence or non-existence of an arbitral award (Section 612 ACCP) is the Austrian Supreme Court. Previously, setting aside proceedings would have undergone three-instance proceedings, like any other ordinary civil proceedings. Furthermore, the Supreme Court is also the exclusive instance on all issues regarding the formation of the tribunal and the challenge of arbitrators (i.e., the Third Title of the Arbitration Act). This 2013 revision of the Arbitration Act was preceded by controversial debates among practitioners, scholars and the judiciary. The reason is that the single instance concept is quite exceptional in the Austrian court system, as in ordinary civil proceedings there is not only a monetary threshold to be exceeded (€30,000), but the case to be tried before the Supreme Court must also touch upon a question of substantive or procedural law that is considered to be essential for legal unity, legal certainty or legal development. However, under Section 615 ACCP, any arbitral award rendered in Austria may be challenged before the Supreme Court. Another reason why the 2013 revision is considered to be a slight revolution in the court system is the fact that the Supreme Court itself must conduct evidentiary proceedings where necessary, including the examination of witnesses.
Although not required under the law, the revision of 2013 has prompted the internal organisation of the Supreme Court to establish a specialised chamber (consisting of five Supreme Court judges) that is competent for all arbitration-related matters. This concentration on a limited number of judges should further enhance the reliability and consistency of the jurisprudence in the field of arbitration.
The introduction of this single instance jurisdiction and the establishment of a specialised chamber within the Supreme Court demonstrate both the Austrian legislators' and judicature's awareness that the legal infrastructure is essential to foster arbitration proceedings seated in Austria.
Apart from the Supreme Court, the other courts dealing with arbitration matters are the district courts, which rule on requests for interim measures, the enforcement of interim measures, and the enforcement of international and domestic awards.
vi Interim measures and judicial assistance
Section 585 ACCP mirrors Article 9 of the Model Law and stipulates that it is not incompatible with an arbitration agreement for a party to request an interim measure from a state court. An Austrian district court has international jurisdiction to issue an interim measure during or prior to arbitral proceedings if the debtor has its seat or habitual residence, or if the assets to be seized are located in, the court's district (see subsection v, above). Thus, it is not necessary that the seat of arbitration is also in Austria. Conversely, the fact that the seat of arbitration is in Austria does not necessarily mean that an Austrian district court is competent to issue an interim measure.
Furthermore, Section 593(1) and (2) ACCP contain the requirements for an arbitral tribunal having its seat in Austria to issue interim or protective measures. Subsections (3) to (6) further govern the enforcement of such measures issued by any tribunal. It is noteworthy that these provisions on enforcement apply to measures issued by tribunals irrespective of whether the tribunal has its seat in Austria (see Section 577(2) ACCP). Thus, the Austrian arbitration law enables the enforcement of interim or protective measures issued by foreign arbitral tribunals without any requirement for exequatur proceedings. In addition, if the measure ordered by the tribunal (whether foreign or domestic) is unknown to Austrian law, the competent enforcement court shall, upon request and after having heard the other side, apply such measure that is most similar to the one ordered by the tribunal.
Under Section 602 ACCP, an arbitral tribunal may ask an Austrian court to perform certain acts for which the tribunal has no authority. Again, the Austrian arbitration law enables both foreign and domestic tribunals to make use of such request, and also includes requests for judicial assistance by other courts, including foreign courts' authorities. Therefore, Section 602 ACCP allows, for instance, a foreign arbitral tribunal to make a request to an Austrian court that the Austrian court ask a court in a third country to perform an act of judicial assistance. The most common acts that a tribunal would request relate to measures of interim or protective measures or measures in the taking of evidence (e.g., summoning of witnesses and taking oaths from them).
vii Setting aside of arbitral awards
Under the Arbitration Act of 2006 (as revised most recently in 2013), any kind of arbitral award may be challenged under Section 611 ACCP. This therefore includes interim awards, partial awards and awards on jurisdiction. The provision distinguishes between legal grounds that must be revoked by the claimant seeking to set aside the award and legal grounds that are to be reviewed ex officio (see Section 611(3) ACCP). The reasons for setting aside are contained in Section 611(2) ACCP and may be summarised as follows:
- lack of an arbitration agreement and lack of arbitrability ratione personae;
- violation of a party's right to be heard;
- ultra petita;
- deficiency in the constitution of the tribunal;
- violation of the procedural public policy;
- grounds for reopening civil proceedings;
- lack of arbitrability ratione materiae; and
- violation of the substantive public order.
The last two grounds are those that the court must review ex officio.
The time limit to file a setting aside claim is three months starting from the date of notification of the award (Section 611(4) ACCP). The competent court is, except for matters involving consumers and matters of employment law, the Austrian Supreme Court as first and final instance (Section 615 ACCP).
viii Recognition and enforcement of arbitral awards
A domestic arbitral award (i.e., an award rendered in Austria) has the same legal effect as a final and binding court judgment (Section 607 ACCP). This means that such award can be enforced under the Austrian Execution Act (AEA) like any other civil judgment (see Section 1 No. 16 AEA). Once the chairperson of the tribunal (or, in his or her absence, any other member of the tribunal) has declared the award as final and binding and enforceable, the award creditor can make a request for execution under the AEA. The competent court is usually the district court in the district in which the debtor has its seat, domicile or habitual residence, or where the assets to be attached are located.
A foreign award (i.e., an award rendered outside of Austria) may be recognised and enforced under the AEA subject to international treaties and acts of the European Union (see Section 614 ACCP), in particular the New York Convention and the European Convention on International Commercial Arbitration of 1961 (European Convention). Both Conventions are applicable in parallel. Therefore, the creditor can simultaneously rely on either Convention or on both of them, while the debtor must invoke grounds under both Conventions to be successful. Under the European Convention, the enforcement of a foreign award may be refused if the award was set aside on certain legal grounds. A violation of public policy is, for instance, not a ground recognised under Article IX of the European Convention. Thus, an arbitral award that was set aside for reasons of public policy at the seat of arbitration can, nevertheless, be recognised and enforced in Austria.
There are currently no acts of the EU applicable to the enforcement of foreign arbitral awards.
A request for exequatur and a request for execution can be jointly filed in the same proceedings under the AEA. The Supreme Court has repeatedly held that in institutional arbitral proceedings, a certified copy of the arbitral award indicating the body or person that has certified the award (including the signatures of the arbitrators) and the reference to the applicable provision under the arbitration rules usually suffice to fulfil the formal requirement. In other words, in institutional arbitration, it is not necessary to have the signatures of the arbitrators certified by a local notary and legalised by the local authority (The Hague Apostille). Furthermore, pursuant to Section 614(2) ACCP, it is not necessary to submit the original arbitration agreement or a certified copy thereof as required under Article IV(1)b of the New York Convention. Both this legal provision and the Supreme Court's jurisprudence are a clear indication that the recognition and enforcement of foreign arbitral awards in Austria shall not be subject to excessive formal requirements.
ix Arbitral institution
The Vienna International Arbitral Centre (VIAC) attached to the Austrian Chamber of Commerce is the most renowned arbitral institution in Austria. Its recognition and casework are not limited to its geographic region: it has a strong focus on arbitrations involving parties from central, eastern and south-eastern Europe, but goes beyond these boundaries. Parties from (east) Asia as well as from the Americas and Africa have appeared in VIAC arbitrations in recent years.6
As of 1 January 2018, the VIAC has revised both its arbitration rules (Vienna Rules) and mediation rules (Vienna Mediation Rules). Under the previous version of the Vienna Rules, VIAC could only accept cases where one of the parties had its place of business or usual residence outside Austria or, if both parties were from Austria, where the dispute was of an international character. Now, VIAC may also administer domestic cases which might also have effect on international matters. Under the old regime, it would have been doubtful whether two Austrian companies, which were owned by foreign shareholders, and parties to a contract which was to be performed within Austria, could have submitted their dispute to VIAC. The other major revision is the introduction of an explicit provision on the tribunal's competence to order security for costs (Article 33(6) and (7) Vienna Rules 2018). Furthermore, VIAC has also adapted its fee schedule whereby the fees of the institution and for the arbitrators have been decreased for lower amounts in dispute and increased at the higher end of the spectrum. In this context, the new rules emphasise the principle of efficiency in conducting the arbitration. Thus, not only the tribunal should take this principle in account when allocating the costs between the parties, but also VIAC when determining the costs of the arbitration. As a last resort, VIAC may even increase or decrease the arbitrators' fees by 40 per cent in particular circumstances. As regards the revision of the Vienna Mediation Rules 2018, they not only provide for a modern procedural framework for mediation proceedings, but also for a combination of arbitration and mediation administered by VIAC and corresponding cost provisions in such a case. All in all, the revision of the Vienna Rules has not changed the nature of VIAC arbitration for which it is known throughout the region: a cost-efficient manner of handling arbitration matters at an international standard.
As with the last revision of 2013, VIAC will edit a new edition of its VIAC Handbook Vienna Rules – A Practitioner's Guide which is a commentary article by article written by arbitration practitioners. On the occasion of its 40th anniversary in 2015, VIAC also published Volume 1 of 'Selected Arbitral Awards'. This work includes 60 arbitral awards rendered by arbitral tribunals under the Vienna Rules, and is a valuable contribution in response to the demand of both practitioners and the public for more transparency in international arbitration in general and of the work of arbitral institutions in particular.
II THE YEAR IN REVIEW
i Developments affecting international arbitration
The most important reform under the 2013 revision of the Arbitration Act was the determination of the Austrian Supreme Court as single instance for certain arbitration-related matters (see Section 615 ACCP). It entered into force on 1 January 2014 and applies to all proceedings initiated on or after that date. Simultaneously, the Supreme Court has established a specialised chamber that deals with the matters under Section 615 ACCP (the docket numbers of these decisions start with '18'). As demonstrated below, apart from the matters referred to in Section 615 ACCP (in most instances, setting-aside proceedings, and proceedings relating to the constitution and challenge of arbitral tribunals), there are a number of other civil matters that involve issues of arbitration and that may be tried before first and second instance courts with the Supreme Court as final instance. Finally, proceedings on the recognition and enforcement of foreign arbitral awards are usually initiated with district courts, the decisions of which may be appealed and finally also brought before the Supreme Court. In conclusion, parties can expect that under the Austrian court system relating to arbitration-related matters, in particular those with a foreign or international context, the Supreme Court will have the final say on certain legal issues of essential importance to the Austrian legal order.
ii Arbitration developments in local courts
In an execution matter,7 the creditor obtained a favourable award. In the underlying arbitration, the tribunal found that the debtor terminated the franchise agreement without good cause and ordered the debtor, inter alia, (1) to provide accounting on the delivery of goods that correspond to the product line of the creditor and (2) to refrain from certain commercial activities that violated the franchise agreement. The court of first instance rejected the request for execution stating that the title was inexecutable. The second instance court reversed the decision and allowed the ordinary revision to the Supreme Court for the following reasons. Irrespective of the principle that the interpretation of a title is an individual question, there were three debtors involved, six legal remedies pending and the parties had obtained conflicting legal opinions, apart from the fact that the amount in dispute exceeded the statutory threshold of €30,000. The Supreme Court considered the contested part of the dispositive section of the award to be sufficiently determined and thus executable. It arrived at this result by referring to the facts found by the tribunal and by interpreting the subject matter of the franchise agreement.
In the underlying arbitration of an ordinary civil matter,8 the respondent was awarded an amount of approximately €75 million as compensation for breach of representations and warranties of a share purchase agreement (SPA). In the arbitration, the claimants contested the calculation of the compensation by alleging that the respondent would be unjustly enriched by the (Austrian) tax on corporations. The tribunal explained in the reasoning of its award that, when calculating the compensation, it did not take into consideration the tax on corporations because this issue was in the exclusive competence of the Austrian tax authorities. The last sentence of the dispositive award reads as follows, 'Any and all other claims and requests are dismissed.' The claimants then filed a claim before the ordinary civil court and claimed the payment of approximately €18.7 million arguing that this was the amount of the tax by which the respondent was unjustly enriched. Upon the respondent's jurisdictional objection, the first instance court rejected the claim that was confirmed by the second instance court. The Supreme Court, as third and final instance, held that the extraordinary revision (i.e., an extraordinary legal remedy filed before the Supreme Court as third and final instance) was inadmissible since the legal question was not of particular importance. Nevertheless, the Supreme Court provided legal reasoning that arbitral awards should be interpreted as court judgments. Therefore, a decision exists even if it is not included in the dispositive part, but may only be read from the legal reasoning, as long as the intention to decide is undoubtedly identifiable. The Supreme Court confirmed the view of the second court instance: (1) neither the dispositive part nor the legal reasoning of the arbitral award contained a decision that the tribunal considered itself to have no jurisdiction over the matter. (2) the arbitration agreement is a procedural agreement and thus to be interpreted according to procedural rules. One must interpret the arbitration agreement according to the intention of the parties in order to determine what disputes fall under the arbitration agreement. The claims filed before the civil courts were covered by the scope of application ratione materiae of the arbitration agreement.
A construction company filed a claim against two natural persons as respondents before the ordinary civil courts.9 The respondents raised jurisdictional objections by relying upon an arbitration clause in the construction contract. The court of first instance accepted the claim, but the appeal court rejected it. It was undisputed that the first respondent orally provided power of attorney to the second respondent who concluded the construction including the disputed arbitration clause in writing on his own behalf and of the second respondent. The Supreme Court as final instance decided as follows: it reiterated its previous decision 7 Ob 64/06x (29 March 2006), which was rendered under the arbitration law prior to the revision of the Austrian Arbitration Act of 2006 (i.e., Sections 577 et seq. ACCP). However, the Court found that the revision of 2006 did not alter the legal requirements for a power of attorney regarding the conclusion of an arbitration agreement. According to that decision of 2006, such power of attorney must explicitly state that legal authority is granted for the conclusion of an arbitration agreement as stipulated in Section 1008 Austrian Civil Code (ACC). In addition, such power of attorney had to be in writing because the main transaction itself (i.e., the arbitration agreement) is also governed by a writing requirement. The purpose of the form requirement of the arbitration agreement is the warning function, and thus the form requirement also extends to the power of attorney. Although Section 54 of the Austrian Commercial Code stipulates that the authority to act granted by an entrepreneur also covers the authority to conclude an arbitration agreement, this provision of substantive law does not void the requirement that the power of attorney must likewise be in writing. The Supreme Court confirmed this decision of 2006 and thus held that the present arbitration agreement was not validly concluded.
In an ongoing arbitration matter,10 the Supreme Court was called by the claimants to appoint an arbitrator on behalf of the respondents. The latter argued before the Supreme Court that the notice of arbitration was not sufficiently clear, in particular that the claimants did not specify a claim that was – according to the respondents – a mandatory requirement under Section 587, Paragraph 4 ACCP. In its reasoning, the Supreme Court first held that if it is clear that the other party refuses to participate in the constitution of the tribunal by nominating its co-arbitrator, the requesting party does not have to wait for the expiry of the three-month period under Section 587, Paragraph 3, No. 3 ACCP. Thereafter, the Supreme Court referred to the wording of the arbitration agreement. One sub-paragraph stated that if a party intended to call an arbitral tribunal, it should write to the other party by registered mail and nominate a co-arbitrator. The Supreme Court did not answer the question whether parties may validly waive the requirements under Section 587, Paragraph 4 ACCP, but held that the present arbitration agreement did not contain a provision deviating from these requirements. Therefore, in accordance with this statutory provision, the claimants should have indicated the claim they intended to raise and the underlying arbitration agreement. Since the notice of arbitration lacked the claim, the Supreme Court dismissed the claimants' request to appoint an arbitrator.
In an ordinary civil matter,11 the Supreme Court considered the extraordinary revision of the claimant to be inadmissible and refused to look into the merits of the case. However, it nevertheless provided some guidance on its decision. Apparently, the claimant was a commercial agent and brought a claim for compensation upon the termination of a franchise agreement before the ordinary courts. The respondent must have raised an objection to jurisdiction by relying on the arbitration clause in the franchise agreement. The first two instances must have upheld this objection. (Since the Supreme Court's decision is the dismissal of an extraordinary revision, the reasoning is relatively short and does not include the procedural history.) The Supreme Court reiterated its standing jurisprudence according to which an arbitration clause is part of the main contract and shares the 'legal fate' of the main contract. Thus, if the main contract is terminated, the arbitration clause – as a rule – also becomes void. However, this approach only applies in doubt since the intention of the parties is decisive and must be interpreted in each individual case. In the present matter, the Supreme Court considers the decision of the lower instances to be justifiable according to which the parties intended to maintain the arbitration clause in their franchise agreement despite the termination of the agreement that was uncontested before the courts.
The subject matter of a setting-aside claim12 concerned a flight service agreement (FSA). In the underlying arbitration, an ICC tribunal ordered the setting aside claimant (who was the respondent in the arbitration) to pay approximately US$4.8 million plus legal interest and legal costs to the respondent. In the setting-aside claim, the claimant requested that the arbitral award be set aside on the following three grounds: (1) the award allegedly violated Austrian substantive public policy (Section 611(2)8 ACCP), (2) the arbitral tribunal allegedly exceeded its competence by ignoring the applicable German law (Section 611(2)3 ACCP), and (3) the arbitrary and surprising reliance on a dictionary and the arbitrary interpretation and application allegedly violated the procedural public order (Section 611(2)2 and 5 ACCP). In the evidentiary proceedings, the Supreme Court primarily relied on the arbitral award and rejected hearing witnesses nominated by the claimant because it considered the issues on which the witnesses would have testified not to be relevant. In its legal reasoning, the Supreme Court reiterated its long-standing jurisprudence that a violation of the substantive public policy may occur only if the result of the arbitral award violates the fundamental Austrian legal order in an intolerable manner. The Supreme Court may not revisit the factual and legal questions of the arbitration. This applies in particular to the question whether or not an arbitral tribunal has correctly interpreted a contract. Only if the result of a legal interpretation were entirely intolerable and affected the decision of the tribunal, may the Court find that public policy has been violated. In concreto, the Court held that the claimant was not sanctioned twice (i.e., by being ordered to pay compensation for not having provided the services under the FSA and by being obliged to provide such services). The condemnation to pay liquidated damages is not in breach of public policy, either. The Court further held that Section 1336 ACC on the judge's right to moderate a contractual penalty, which is a mandatory provision of Austrian law, does not need to be taken into account as public policy in an international arbitration where, moreover, foreign law is applicable. On the second legal ground raised by the setting-aside claimant, the Supreme Court held that even if the tribunal had applied the designated German law wrongly, this would not count as exceeding the tribunal's competence under Section 611(2)3 ACCP. Finally, the Court did not find a violation of due process or any other violation of the procedural public policy. It reiterated previous decisions according to which procedural flaws that would come close to procedural grounds of nullity in civil procedural law are relevant. The tribunal's reference to a standard dictionary is unobjectionable because it primarily relied on its own language competence and the dictionary was just an additional argument; in any event, the interpretation of the FSA was not just based on the word 'refusal', but also on the history and purpose of the contract. For these reasons, the Court dismissed the setting-aside claim.
iii Investor–state disputes
Under the ICSID regime, there are currently 11 cases pending in which an Austrian investor has brought a claim against a state (the respondent states are Libya, Argentina, Italy, Serbia, Bulgaria, Montenegro and Croatia). It is worth noting that in 2017, four Austrian banks each filed claims against Croatia because of the mandatory conversion of loans in Swiss francs into loans denominated in euro. One of these four banks has further filed a claim against Montenegro for similar reasons. In the four banking cases against Croatia, the banks are represented by three different law firms while the state has retained one firm for all four matters. On the other side, Austria was sued by a Dutch company under the bilateral investment treaty between Austria and Malta in 2015. This case has received particular attention by the media not only because it is the first investment case against Austria, but also because the claimant company belongs to the Meinl Bank group, which is a bank registered in Austria. At the end of 2017, the Austrian media leaked that the claimant was not successful, but the award has not yet been rendered.
To date, no other cases under arbitration rules other than those of ICSID are publicly known.
III OUTLOOK AND CONCLUSIONS
The amendment of the Arbitration Act in 2013 and the revision of the Vienna Rules in 2018 demonstrate that Austria and its arbitration community constantly observe trends in international arbitration and improve the legal framework where necessary. These efforts are supported by the jurisprudence, particularly since the Supreme Court has established a special chamber that rules on all matters relating to setting-aside claims and the composition of the arbitral tribunal. The Supreme Court also regularly makes reference to international arbitration standards such as, for instance, the IBA Guidelines on Conflicts of Interest in International Arbitration. These overall developments should enable cost and time-efficient arbitral proceedings and related state court proceedings, both in compliance with international standards and the requirements under the rules of law. Austria (and in particular Vienna) is thus considered to be a regional arbitration hub with a strong focus on countries in the CEE and SEE regions.
As regards investor–state arbitrations, developments in recent years have shown that Austrian investors are more and more willing to make use of their rights under investment treaties. This trend is expected to continue.
1 Venus Valentina Wong is counsel at Wolf Theiss Attorneys-at-Law.
2 Federal Law Gazette I 2006/7.
3 Federal Law Gazette I 2013/118.
4 See Reiner, 'The New Austrian Arbitration Act', Journal of International Arbitration, Section 583,
5 Austrian Supreme Court, 5 August 2014, docket numbers 18 ONc 1/14 p and 18 ONc 2/14 k; see Wong, Schifferl, 'Decisions of the Austrian Supreme Court in 2013 and 2014', in Klausegger et al., Austrian Yearbook on International Arbitration 2015, 338 et seq.
7 Austrian Supreme Court, 4 July 2017, 3 Ob 118/17z.
8 Austrian Supreme Court, 21 December 2017, 6 Ob 178/17w.
9 Austrian Supreme Court, 17 January 2018, 6 Ob 195/17w.
10 Austrian Supreme Court, 6 February 2018, 18 ONc 4/17h.
11 Austrian Supreme Court, 13 February 2018, 5 Ob 188/17h.
12 Austrian Supreme Court, 20 March 2018, 18 OCg 1/17x.