Austria: International Litigation and Arbitration in Austria – An Overview

Court system

What is the structure of the civil court system?

In Austria, approximately 1,700 judges decide civil and criminal matters in first, second, and third instance courts. In civil proceedings, District Courts (Bezirksgerichte) and High Courts (Landesgerichte) act as first instance courts, depending on the value of the matter in dispute and the subject of the litigation. Generally speaking, if this value does not exceed €10,000, a District Court will have jurisdiction for the litigation. In addition, District Courts have exclusive jurisdiction to decide matters involving parentage, alimony and matrimonial issues or disputes arising from the lease of apartments, etc. In all other cases, the matter will have to be brought before a High Court. However, High Courts do not only act as first instance courts. They will also decide on appeals against a District Court's judgment. On the other hand, appeals against judgments of High Courts are decided by an Appellate Court (Oberlandesgericht).

In the third instance, the Austrian Supreme Court (Oberster Gerichtshof) has jurisdiction to decide appeals brought against second-instance judgments delivered by either High Courts or Appellate Courts. As a general rule, a matter may be appealed to the Supreme Court if the value of the subject matter in litigation exceeds €4,000 and involves the resolution of a legal issue of general interest. A matter is of general interest if its clarification is important for purposes of legal consistency, predictability or development; eg in the absence of coherent and previous decisions of the Supreme Court. There are various exceptions from these general rules, and in certain matters appeals to the Supreme Court are not admissible at all. In deciding appeals, the Supreme Court is in general not allowed to review the facts of the case. In line with this principle, new facts and evidence may only be submitted by the parties in narrowly defined circumstances.

In addition to the general court system, specialised courts rule on specific subject matters. For example, in Vienna the Vienna Commercial Court (Handelsgericht Wien) will decide commercial law disputes and the Vienna Labour and Social Court (Arbeits- und Sozialgericht Wien) labour, employment and social law disputes.

Judges and juries

What is the role of the judge and, where applicable, the jury in civil proceedings?

Austrian judges are career judges and thus are not elected but appointed by the Austrian President or the Minister of Justice upon presidential authorisation. They will decide either alone or together with other career judges on any civil law dispute. In comparison to common law procedural rules, the role of the Austrian judge can be described as rather inquisitorial. In order to establish the facts which appear relevant to the evaluation of the dispute, judges, at their own discretion, may appoint experts, order witnesses to appear in court or the parties to submit certain documents (Section 183 ZPO - Civil Procedure Code).

Only in certain matters, such as commercial disputes and labour and employment law disputes, may career judges and lay judges form a panel and rule together on the matter in dispute. In any case, they will decide on the facts as well as on the legal issues involved. Under no circumstances will a jury be involved in a civil lawsuit.

Limitation issues

What are the time limits for bringing civil claims?

As a general rule, claims are not enforceable once they become statute-barred. The statute of limitations will generally commence when a right could have been first exercised (Section 1478 ABGB - Civil Code). Austrian law distinguishes between a long and a short limitation period. The long limitation period is 30 years and applies whenever special provisions do not provide otherwise. The short limitation period is, as a rule, three years and applies, for example, to accounts receivable or to damage claims. The statute of limitations is not observed ex officio (Section 1501 ABGB), but must be pleaded. It cannot be waived in advance. Agreements ruling out the statute of limitations are therefore null and void.

Pre-action behaviour

Are there any pre-action considerations the parties should take into account?

Generally, there are no legal requirements to be met. However, from a practical point of view, the time period before filing a lawsuit may often prove to be the most important time during a dispute. It is actually the point in time where a party, together with its attorney, should very carefully summarise all the facts of a case and scrutinise whether all the evidence which is necessary to prove these facts is at hand. Since Austrian civil procedure law generally does not provide for discovery, it will be up to the parties to a proceeding to evaluate very carefully whether they will be able to prove all the facts where the burden of proof is on their side.

Starting proceedings

How are civil proceedings commenced?

Civil proceedings are commenced by filing a complaint. The complaint must satisfy certain form requirements and may be filed only by an attorney in proceedings where parties have to be represented by an attorney; this is the case if the amount in dispute exceeds €4,000. As to requirements relating to content, the complaint must contain allegations as to the jurisdiction of the court, the relief sought, the facts on which the claim is based, and the complaint shall further offer evidence for these facts. It is recommended that applications for the safeguarding of evidence, the summoning of witnesses and interim measures be included in the complaint.

Certain complaints for payment which do not exceed €30,000 and which are treated in shortened proceedings (Mahnklagen) may be filed with the courts by electronic data transmission.

Upon receipt of the complaint by the courts, the case is considered pending and any applicable limitation period (see 3 above) is interrupted, provided that the proceedings are duly pursued.

Timetable

What is the typical procedure and timetable for a civil claim?

After the claim has been filed, the court will first consider whether it has jurisdiction. If so, it will serve the complaint on the defendant along with a request to submit a statement of defence within four weeks. The statement of defence must be submitted in the form of a legal brief, explaining the facts and evidence on which the defendant is relying. In addition, the defendant must indicate the judgment he is seeking (dismissal of the complaint in whole or in part). Having received the statement of defence, the court initiates the trial which usually consists of several oral hearings. The parties may file written submissions containing facts, evidence and legal issues up to one week prior to the first hearing (Section 257(3) ZPO). Evidence is taken at the oral hearings. Once the taking of evidence is completed, the judge announces that the trial is closed and issues the judgment, usually in writing.

In principle, the parties may present new facts and evidence until the trial is closed by the court of first instance. However, the court may reject their submission if the new facts and evidence were not introduced earlier owing to gross negligence and if the acceptance of the new facts and evidence by the court would delay the proceedings (Section 179 ZPO). Nevertheless, the submission of new facts that have either become known in the course of the proceedings or only became relevant owing to the development of the procedure (eg upon new allegations introduced by the opponent, upon the presentation of an expert's opinion or as a consequence of perjury of parties and witnesses) is not precluded by the cited provision.

Case management

Can the parties control the procedure and the timetable?

The trial is primarily controlled by the judges. They open, chair and close the oral hearings, allow somebody to speak and may also ask the speaker to fall silent again. They are first in questioning the persons who have to testify in order to give evidence. The timetable for the proceedings is generally determined by the court, but it is customary for the court and the parties to consensually agree on the dates of the hearings. Also, the parties may file motions relating to the procedure (eg motion to postpone a court hearing or a time limit) and may unanimously agree to stall the proceedings for a period of at least three months.

Evidence

What is the extent of pre-trial exchange of evidence? Is there a duty to preserve documents and other evidence pending trial? How is evidence presented at trial?

Under Austrian civil procedure law, in principle no discovery or other pre-trial exchange of documents or other forms of evidence exist. Upon request of a party, the judge may agree to take evidence even before the claimant has filed its complaint if there is a risk that evidence could not be taken in future (eg a potential witness may intend to emigrate) or if the claimant has a legal interest in the determination of the current status of an item (eg the status of demolition may be determined in preparation of damage claims). Such pre-trial measures for the conservation of evidence (Sections 384-389 ZPO) are, however, quite rare.

The Austrian Code of Civil Procedure expressly mentions, inter alia, documents, witnesses, expert witnesses, and the testimony of the respective parties as possible evidence to be presented by either party of the proceedings (Section 292 et seq ZPO). However, other sources of knowledge may also be submitted as evidence. The parties may comment on the authenticity and contents of documents. Witnesses are questioned by the judge followed by a cross-examination by the parties' attorneys. The same holds true for the testimony of the parties.

The parties and witnesses are obliged to tell the truth when being questioned. Parties and witnesses are, however, entitled to refuse to answer individual questions (Sections 321, 380 ZPO). Reasons to be put forward for such refusal are that (a) answering the question would put shame on either a party/witness or a party's/witness's spouse or close relatives or would bear the risk that such persons would become the subject to criminal prosecution; (b) the party/witness is bound by a legally acknowledged obligation of secrecy or would have to disclose a business secret; (c) the information concerned was provided to the party/witness in his/her function as a lawyer by its client; or (d) the question infringes election secrecy. Witnesses are granted one more reason for a refusal to testify: they are not obliged to answer questions that would cause financial disadvantage to themselves or their spouses or to close relatives. Perjury by witnesses regularly qualifies as a criminal act; perjury by a party is liable to criminal prosecution only if the respective party was questioned while under oath. Expert witnesses will regularly issue a written opinion and may, thereafter, be questioned at the oral hearing upon request of the parties.

Document requests are very limited. A party may, however, be ordered to submit documents to the court if prima facie evidence clearly shows that the party is in possession of such documents and (a) such party itself expressly referred to the documents as evidence for its factual allegations, (b) a civil law obligation exists to hand over the documents to the other party, or (c) the documents have been established in the legal interests of both parties, or they certify a mutual legal relationship between the parties, or contain written statements which have been made in the course of negotiations between the parties (Section 304 ZPO). Court orders against third parties which are not party to the proceedings may be issued only under the preconditions described under (b) and (c) above (Section 308 ZPO). The grounds based on which the submission of documents may be refused are similar to the reasons for the refusal of witnesses and parties to testify (Section 305 ZPO, see above).

Interim remedies

What interim remedies are available?

The court may issue a preliminary injunction either before or during the litigation. In order to secure money claims, a court may order a preliminary injunction, if there is sufficient reason to believe (a) that the defendant will prevent or endanger the enforcement of the judgment by destroying, hiding or transferring his assets or (b) that the judgment otherwise would have to be enforced in non-EU-countries (ie countries which have not ratified the Brussels Convention or the Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters). Possible preliminary injunctions include freezing orders of bank accounts or attachment of the defendant's assets, including real estate. The court may even order third parties not to pay accounts receivable to the defendant. Further, the court could order that physical items are to be held in custody or must be administered.

In order to secure claims other than money claims, preliminary injunctions (including orders to cease and desist) may be issued either under the preconditions described under (b) above, or in order to prevent imminent danger or irretrievable damage to the claimant. Such injunctions are very common in disputes concerning alleged unfair competition.

Preliminary injunctions may also be issued to secure claims pending in foreign court cases, at least as long as the final judgment of the foreign court is expected to be recognised and enforceable in Austria.

Remedies

What substantive remedies are available?

Under Austrian law, remedies of the claimant include requests (a) for performance, (b) for obtaining a declaratory decision and (c) for creating, amending or cancelling a legal relationship. Actions for performance may be aimed at holding the defendant liable to pay a certain sum of money, to deliver or surrender moveables or to pay damages. The requested performance may also consist in requiring the defendant to cease and desist (eg acts of unfair competition) or to tolerate certain actions by the claimant. Actions for a declaratory judgment decide on the existence of a legal relationship or right or the authenticity of a document. Actions for creating, amending or cancelling a legal relationship directly change the respective legal circumstances by virtue of the decision.

Generally, the statutory interest rate for private law claims is 4 per cent per year (Section 1000(1) ABGB). However, a higher rate of 8 per cent on top of the basic interest rate issued by the Austrian National Bank applies to monetary claims which derive from commercial transactions (Section 1333(2) ABGB). The claimant is further entitled to ask for the payment of compound interest to be calculated as from the day of the filing of the complaint.

Enforcement

What means of enforcement are available?

If the defendant does not satisfy the claims the plaintiff has been awarded by the court's judgment, the plaintiff may obtain compulsory enforcement in court. In this context, enforcement proceedings may refer to moveables and immoveables as well as claims against third parties, including the seizure of plots of land or moveables owned by the defendant and the freezing of the defendant's bank accounts.

The enforcement of monetary claims is in many cases effected by the attachment and sale of the object of execution in an auction. Subsequently, the auction proceeds are assigned to the judgment creditors.
The enforcement of actions and omissions is either effected by means of direct force (eg removal of persons, items, sale by auction) or indirectly by imposing fines and imprisonment.

Inter-parties costs

Does the court have power to order costs?

In its final judgment, the court will order which party has to bear the costs of the proceedings (including court fees, legal fees and certain other costs of the parties, for example costs for pre-trial assertion of claims, costs for the safeguarding of evidence, compensation for loss of earnings or travel expenses). The court's decision on costs is subject to redress, along with or without an appeal on the court's decision on the merits of the dispute (Section 55 JN- Jurisdiction Code).

As a matter of general principle, the winning party is entitled to reimbursement by the losing party of all costs of the proceedings. If either party prevails with and loses parts of its claims, either party shall bear its own costs, or costs will be divided on a pro-rata basis. The calculation of reimbursable legal fees is subject to the calculation method under the Austrian Act on Attorneys' Tariffs, irrespective of the actual agreement between the winning party and its attorney. Thus, the reimbursable amount may be lower than the actual legal fee payable by the winning party.

Foreign claimants, upon the defendant's request, in principle have to provide security for the defendant's costs (Section 57 JN). However, this does not apply inter alia for citizens of a Member State of the European Union and/or the Lugano Convention.

Fee arrangements

Are ‘no win no fee’ agreements or other types of contingency fee arrangements available to parties?

The Austrian Act on Attorneys' Tariffs governs the calculation of legal fees and serves in particular as the basis for the court's decision on the reimbursement of the parties' costs. It also applies to the computation of the remuneration for legal services rendered if no other agreement has been made between the party and the attorney. A party and his/her attorney may agree on other methods of calculating the fees, including hourly rates. The latter has been increasingly common, including in litigation and arbitration matters. In principle, contingency fees are permitted, as long as the legal fees are not calculated as a percentage of the amount awarded to claimant by the court/arbitral tribunal. For example, it would be admissible to agree on a certain hourly rate and on an increased hourly rate if the advised party prevails in the litigation/arbitration. Also, a lump-sum fee arrangement based on the entire amount in dispute is allowed in Austria.

Appeal

On what grounds and in what circumstances can the parties appeal? Is there a right of further appeal?

The judgment issued by the court of first instance may be appealed on grounds of incorrect establishment of facts or incorrect legal assessment. Serious procedural irregularities may also lead to the nullity of a judgment, eg if the public is excluded without justification from attending the hearing. In principle, the courts will review the judgment only with regard to the grounds for appeal alleged by the parties. However, reasons which lead to the nullity of the judgment (ie major procedural irregularities, for example lack of jurisdiction, participation of challenged judges, etc) will always be considered.
Following an appeal of at least one of the parties, the court of appeal may set aside the judgment and refer the case back to the court of first instance, or it may either alter or confirm the judgment of the court of first instance. A judgment of the appellate court may be appealed to the Supreme Court only if the case involves an amount in dispute of more than €4,000 and if a legal issue of considerable significance has to be resolved. Several exceptions apply in this context (for details see 1 above).

Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

The enforcement of a foreign judgment in Austria is subject to a declaration of enforceability to be issued by the Austrian courts. Foreign judgments will be declared enforceable if they are enforceable in the state of origin and if reciprocity is ensured by state treaties or ordinances. Within the European Union and EFTA such reciprocity is ensured by Council Regulation EC No 44/2001 on jurisdiction and the enforcement and recognition of judgments in civil and commercial matters and the Convention of 16 September 1988 on jurisdiction and the enforcement of judgments in civil and commercial matters (Federal Law Gazette 1996/448, (Lugano Convention)). Reciprocity with countries outside the European Union and EFTA is also ensured by a number of bilateral treaties on recognition and enforcement.

Foreign proceedings

Are there any procedures for obtaining oral or documentary evidence for use in civil proceedings in other jurisdictions?

In order to obtain oral or documentary evidence, foreign courts may file a request for legal assistance. Since Austria is a member state of the 1954 Hague Convention on Civil Procedure, its courts will grant legal assistance to other member states in accordance with the procedure set forth in this convention. In addition, Austria has entered into numerous bilateral treaties in which the proceedings for the notification of documents and the taking of evidence are determined in detail.

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

Domestic and international arbitration is governed by Sections 577 et seq. of the Austrian Code of Civil Procedure which have been in force basically since 1898. Current Austrian arbitration law is not based on the UNCITRAL Model Law. However, a working group proposed draft legislation on arbitration which will adjust the UNCITRAL Model Law to Austrian Civil Procedure Rules and transpose it into the Austrian legal system. If the draft under discussion was finally enacted, it would provide an even better environment for arbitration than is the case right now. On the one hand, the draft provides clear and detailed rules on important parts of arbitral proceedings (eg reasons for the setting aside of the award, explicit requirement of timely complaint on procedural irregularities, clarification of the question which matters may validly be referred to arbitration, etc) which are more of a complementary than of changing nature. On the other hand, the draft also proposes a few substantive changes (eg the requirements for the conclusion of valid arbitration agreements are lowered, arbitral tribunals will be allowed to render preliminary measures and interim measures of protection, etc). The new law on arbitration has not been enacted to date but the amendment is likely to take place in the near future (see also BOX OUT).

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

In order to be enforceable, arbitration agreements must either be in writing (the term 'written agreement' referring to an agreement signed by the parties) or they have to be entered into by telegrams, telexes, faxes or even e-mail messages exchanged by the parties (Section 577(3) ZPO). Arbitration clauses which, rather than being part of the signed contract between the parties, are part of general terms or conditions or other separate documents are not enforceable, unless these documents are attached to the signed contract and the contract includes a reference to the arbitration clause included in the general terms and conditions. The signing of the arbitration agreement by agents or attorneys-at-law requires a special power of attorney.

The arbitration agreement may either refer to a specific present dispute between the parties or may cover future disputes relating to a sufficiently determined legal relationship between the parties.

Various matters are excluded from arbitration, eg disputes on the termination of contracts regarding the lease of apartments, claims for the contribution of the share capital of a limited liability company, and future employment law disputes, except disputes arising from employment contracts of managing directors (Geschäftsführer, Vorstandsmitglieder) of limited liability companies and stock corporations (Gesellschaften mit beschränkter Haftung - GmbH, Aktiengesellschaften - AG).

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

In the absence of relevant rules in the arbitration agreement, the arbitration panel consists of three arbitrators. Each party must appoint an arbitrator. The two arbitrators appointed by the parties must appoint a third arbitrator who will chair the arbitration panel (Section 580 ZPO). If the parties fail to appoint arbitrators or if the appointed arbitrators fail to agree on a chairman, the arbitrator/chairman will be appointed by the court (Section 582(1) ZPO). Under certain circumstances as defined in Section 583 ZPO (eg if the parties agreed in the arbitration agreement on a specific person to act as arbitrator and this person dies, further if an arbitrator denies or delays the performance of his/her obligations arising out of his/her prior acceptance to sit as arbitrator) the court, upon the request of a party, must declare the arbitration agreement null and void. An arbitrator who refuses to perform his/her obligations in a timely fashion may be liable to the parties of the arbitration for the damages incurred arising from the delay to the procedure (Section 584(2) ZPO).

Any party may challenge the appointment of an arbitrator under certain preconditions enumerated in Section 19 et seq JN. These are the exclusion of the arbitrator to act in judicial matters (eg the arbitrator is closely related to a party of the arbitration), and the presence of sufficient reason to believe that an arbitrator will not act in an impartial fashion. The legal grounds based on which an arbitrator may be challenged are held very general in order to permit the special examination of each single case by way of interpretation. It is worthwhile mentioning that the party by which the arbitrator concerned was appointed is entitled to request his/her challenge in the event that the reason for the challenge arose and became known to this party only after the appointment (Section 586(2) ZPO).

Procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

Austrian legislation contains only a few requirements for the procedure to be followed by the arbitrators (Sections 587-594 ZPO), except that the parties must have a fair chance to present their case and that the arbitrators must establish the relevant facts. Default judgments are not permissible (Section 587(2) ZPO). However, the law on arbitration limits the power of the arbitrators with regard to certain actions. The arbitrators are not entitled to use means of coercion or to impose fines on the parties or witnesses. Thus, arbitrators cannot force parties or witnesses to appear before the arbitral tribunal. Arbitrators are further not allowed to put parties and witnesses under oath (Section 588 ZPO).
Unless the arbitration agreement states otherwise, the arbitrators have to decide by majority vote (Section 590 ZPO).

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 in the form of 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 ICC International Court of Arbitration or the International Arbitral Center of the Austrian Federal Economic Chamber, the procedural rules of this arbitration body apply.

Court intervention

On what grounds can the court intervene during an arbitration?

Court intervention is very limited. The courts may assist the arbitration body where the latter's power is limited, eg in issuing subpoenas to witnesses (Section 589(1) ZPO; Art XIII EGJN - Introductory Act to the Jurisdiction Code). Apart from that, state courts assist in appointing arbitrators and may set aside arbitration agreements (see 18 above).

Interim relief

Do arbitrators have powers to grant interim or conservatory relief?

Arbitration courts are not entitled to grant interim or conservatory measures. Such a relief may be issued and executed by state courts even while arbitration proceedings are pending before the arbitrators. However, this situation will most probably be changed by the enactment of the new law on arbitration which is to be expected soon (see 17 above and BOX OUT).

Award

When and in what form must the award be delivered?

Austrian law stipulates no time limit for the delivery of the arbitral award. It must be issued in writing and signed at least by a majority of the arbitrators. It must contain the date on which the award is issued (Section 592(2) ZPO). Arbitral awards are considered to have the same effects on the parties as a final and binding judgment would have. Upon request of a party, the arbitration award has to contain the chairman's confirmation that the award is final and enforceable (Section 594(2) ZPO).

Appeal

On what grounds can an award be appealed to the court?

Unless otherwise agreed between the parties, no appeal to a second-instance arbitration body is permissible. However, an award can be appealed to the competent state court within three months of the notification of the award under the specific circumstances set out in Section 595(1) ZPO, including:

  • the absence of a valid arbitration agreement;
  • denial of a party's fair chance to present its case;
  • violation of statutory or contractual stipulations as to either the composition of the arbitral tribunal or the decision-making of such tribunal;
  • the failure of the arbitrators to sign the original copy of the arbitration award;
  • dismissal of the challenge of an arbitrator although sufficient reason for the challenge existed;
  • excessive exercise of the arbitral tribunal's jurisdiction (ultra petita);
  • violation of Austrian public order or statutory provisions of Austrian law which cannot be avoided, even if the parties agree on the application of foreign law;
  • circumstances as enumerated in Section 530 ZPO for the re-opening of civil procedures (including eg false testimony of witnesses); however, this ground may be waived in the arbitration agreement if such agreement is entered into by businessmen.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Arbitral awards will be enforced by Austrian courts in the same way as judgment of state courts (eg seizure of moveables or immoveables as well as of money claims of the defendant against third parties; see 15 above). Since Austria is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Geneva Convention, enforcement of foreign awards is also subject to these state treaties.

Costs

Can a successful party recover its costs?

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 term of reference). In the absence of such an agreement, the arbitration panel may decide on the recovery of costs and will usually do so in the same way as the respective provisions of the Austrian Civil Procedure Code for state court litigation (see 12 above).
Obligatory ADR

Is there a requirement for the parties to litigation or arbitration to consider alternative dispute resolution (ADR) before or during proceedings?

The Federal Ministry of Justice, in 2001, proposed a bill to regulate mediation, including the introduction of obligatory mediation proceedings. Finally, the new law on civil mediation (Zivilrechts-Mediations-Gesetz) has been enacted and came into force on 1 May 2004. However, the initial intention to provide for compulsory mediation has not been realised in the end. Nevertheless, the judge, in cases where he/she considers the use of mediation appropriate, may inform the parties about the organisations that could help them to settle their dispute amicably.

As a consequence, during civil proceedings an Austrian judge is not obliged to stall the proceedings and order the parties to consider mediation or other alternative mechanisms of dispute resolution.
The same principle is true for arbitration proceedings. Should the parties desire to make a preliminary attempt to settle the case by means of ADR prior to arbitration proceedings, they are of course free to agree on a two-step dispute resolution clause (eg arbitration/litigation only to be initiated upon the unsuccessful conclusion of conciliation proceedings within a certain timeframe).
Specific features

Are there any specific features of the dispute resolution system not addressed in any of the previous questions?

Austrian judges having a positive attitude towards arbitration, more and more companies choose a place of arbitration located in Austria for the arbitral resolution of international commercial disputes. The Vienna International Arbitral Centre of the Austrian Federal Economic Chamber (VIAC) is Austria's major arbitration institution. It efficiently administers arbitration cases which have been agreed to be conducted under the Rules of arbitration and conciliation of the VIAC (Vienna Rules) at a reasonable cost. The Vienna Rules provide a modern and comprehensive framework for the conduct of international arbitration proceedings. It goes without saying that these rules may further be detailed and/or amended by the parties' agreement. When it comes to the nomination of arbitrators, the VIAC's list of arbitrators gives the parties an extensive choice of experienced and multilingual individuals. The parties to VIAC arbitration proceedings may either appoint an arbitrator from the respective list or somebody else according to their own preference.

Updates and Trends

The draft legislation on arbitration (see 17 above) will substantially amend the present Austrian law on arbitration and align it with the UNCITRAL Model Law. Unlike the latter, the draft legislation shall, however, apply to international commercial arbitration as well as domestic commercial or non-commercial arbitration (consumer protection has been taken care of by the draft).

The working group which established the draft bill on the new Austrian arbitration law strived to make Austria a Model Law Country. They decided to include some alterations though which will be of interest to the potential user:

The form requirements for the validity of the arbitration agreement as proposed for the new Austrian arbitration law will be less stringent than those provided for in the Model Law. In accordance with the discussions that took place at UNCITRAL, the new law will expressly state that the parties’ signature is not required for the validity of the arbitration agreement. Further, a contract which makes reference to a written arbitration clause does not have to be in writing itself but may have also been entered into by oral or even implicit agreement. The less stringent form requirements will also have to be observed at the enforcement of foreign awards and any requirement of a written arbitration agreement, in particular the one of the New York Convention, will have to be interpreted in accordance with the above.

The draft law, as opposed to the UNCITRAL Model Law, interdicts an even number of arbitrators. Although the parties may still agree on an even number of arbitrators, the party nominated arbitrators shall select an additional individual in this event who will serve as the panel’s chairperson in order to end up with an odd number of arbitrators.

The UNCITRAL Model Law does not offer solutions for the appointment of arbitrators in multiparty arbitration disputes. The Austrian working group was finally convinced by the respective French approach (Art 1494 NCPC). Reflecting its model, the new law provides that in case the parties involved on one side, either as claimants or respondents, are not bound to agree on a single person as party appointed arbitrator and are further unable to jointly choose such arbitrator, all members of the panel will be appointed by the court. Any of the parties involved will thus lose its right for appointment but nobody will be discriminated though.

The power of the arbitral tribunal to issue interim measures presents a novelty to the Austrian arbitration legislation. The respective parts of the new law are expected to correspond with what is currently discussed at UNCITRAL. The details of the pertinent provisions (e.g. permission of ex-parte measures) are however not yet entirely clear.

The Austrian Ministry of Justice is about to finalize the draft and it is expected that at the beginning of 2006, the new Austrian law on arbitration will be in force.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions