Slovenia: International Arbitration Comparative Guide

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1 Legal framework

1.1 What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?

The Arbitration Act operates as a comprehensive legal framework for arbitration. In addition, select provisions of the Civil Procedure Act and the Non-contentious Civil Procedure Act apply in respect of specific issues (eg, setting aside an arbitral award).

There are no significant limitations on the scope of the statutory regime (however, oral arbitration agreements are not governed/recognised).

1.2 Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?

The legislation does differentiate between domestic arbitration and international arbitration. ‘Domestic arbitration' is defined as arbitration that has its seat in Slovenia, irrespective of the nationalities of the parties to the dispute. ‘International arbitration' is defined as arbitration that has its seat abroad.

1.3 Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?

Yes.

1.4 Are all provisions of the legislation in your jurisdiction mandatory?

No. The parties are generally free to agree on the rules of procedure, subject to very few mandatory rules (eg, the right to be represented by an attorney may not be excluded; if the parties fail to agree on a sole arbitrator, either party may request the court to make the appointment).

1.5 Are there any current plans to amend the arbitration legislation in your jurisdiction?

There are no current plans or initiatives in this respect.

1.6 Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?

Slovenia has been a party to the New York Convention since 6 July 1992, as a succession matter following the breakup of Yugoslavia (which acceded to the New York Convention on 26 February 1982).

Since 4 June 2008, the following reservation has been in place:

In accordance with paragraph 3 of Article 1, the Republic of Slovenia will apply the Convention, on the basis of reciprocity, to the recognition and enforcement of only those awards made in the territory of another Contracting State. The Republic of Slovenia will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the Republic of Slovenia.

1.7 Is your jurisdiction a signatory to any other treaties relevant to arbitration?

Slovenia is a party to the European Convention on International Commercial Arbitration of 1961 and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of 1965.

2 Arbitrability and restrictions on arbitration

2.1 How is it determined whether a dispute is arbitrable in your jurisdiction?

Arbitrable disputes include all pecuniary claims capable of resolution by way of arbitration proceedings. Non-pecuniary claims, however, may also be subject to an arbitration agreement if the matter is capable of settlement. For consumer-related or employment-related matters, special provisions of the Arbitration Act apply.

2.2 Are there any restrictions on the choice of seat of arbitration for certain disputes?

Generally, the parties may freely decide on the seat of arbitration.

The following restrictions apply:

  • If all parties to the arbitration agreement are Slovenian citizens or legal persons with their seat in Slovenia, they cannot agree on a seat of arbitration which is outside Slovenia if a Slovenian court would have exclusive jurisdiction over the dispute; and
  • In consumer and employment-related matters, the choice of seat of arbitration is a mandatory element of the arbitration agreement. Further, for consumers or employees whose permanent or temporary residence is in Slovenia or who usually perform their work in Slovenia, an arbitration agreement with a choice of seat outside Slovenia (where the consumer or employee, at the time the arbitration agreement is concluded or the statement of claim arises, does not have a permanent or temporary residence or does not usually perform his or her work) will be recognised only if invoked by the consumer or employee.

3 Arbitration agreement

3.1 What are the validity requirements for an arbitration agreement in your jurisdiction?

Generally, the validity requirements are as follows:

  • The arbitration agreement must pertain to arbitrable subject matter;
  • The arbitration agreement must be in writing, either in an arbitration clause or in a separate agreement (including an exchange of letters, fax messages, telegrams, email or other means of communication which provides a record of the arbitration agreement that is accessible and suitable for subsequent reference); and
  • The parties must have the legal capacity to enter into an arbitration agreement.

In consumer-related matters, an arbitration agreement may be entered into only after the dispute has arisen. In both consumer and employment-related matters, the arbitration agreement must be set out in a separate document, which the consumer or employee has signed.

3.2 Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?

The Arbitration Act contains a provision on the separability of arbitration clauses. Article 19 provides that an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. Moreover, as regards the law governing the arbitration clause, the prevailing opinion in legal theory is that the validity of the arbitration clause shall be decided under the law of the seat of the arbitration (provided that the parties have not specified the law of the arbitration agreement).

3.3 Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?

If the parties have not agreed on the seat of arbitration, the latter is determined by the tribunal, having regard to the circumstances of the case, and in particular the convenience of the parties.

If the parties have not agreed on the language of arbitration, the latter is determined by the tribunal. Until then (unless agreed otherwise), the parties may file submissions in the language of the main contract, in the language of the arbitration agreement or in the Slovenian language.

4 Objections to jurisdiction

4.1 When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?

The latest that an objection to jurisdiction may be raised is in the statement of defence. A party is not precluded from making this objection as a result of having appointed an arbitrator or having participated in the appointment of an arbitrator.

An objection that the tribunal has exceeded the scope of its jurisdiction must be raised as soon as such alleged action takes place.

In either of the above cases, the tribunal may admit a later objection if it considers the party's delay justified.

4.2 Can a tribunal rule on its own jurisdiction?

Yes, the tribunal has the power to rule on its own jurisdiction (the principle of competence-competence), which includes any objections with respect to the existence or validity of the arbitration agreement.

4.3 Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?

Provided that the tribunal decides that it has jurisdiction, any party may request, within 30 days of receiving notice of such decision, the competent court (ie, the Ljubljana District Court) to decide the matter. However, the tribunal may continue the arbitration proceedings and render a final award while the court proceedings are pending.

5 The parties

5.1 Are there any restrictions on who can be a party to an arbitration agreement?

There are no such restrictions; a party to an arbitration agreement can be any natural or legal person, including the Slovenian state and other persons of public law.

5.2 Are the parties under any duties in relation to the arbitration?

Several procedural rules stipulate the actions that a party is required to undertake, but the Arbitration Act generally provides for default rules should a party fail to act accordingly. For example:

  • if the parties fail to agree on a sole arbitrator, either party may request the court to make the appointment; and
  • if the plaintiff fails to file its statement of claims by the prescribed deadline, the tribunal will stop the proceedings.

5.3 Are there any provisions of law which deal with multi-party disputes?

There are no such provisions in the Arbitration Act. Such matter, if not regulated in an agreed set of arbitration rules, will thus be subject to the tribunal's determination.

6 Applicable law issues

6.1 How is the law of the arbitration agreement determined in your jurisdiction?

The Arbitration Act includes no specific provisions in this respect. According to legal scholars, and as may be inferred from the case law of the Slovenian Supreme Court, unless the parties have agreed on the choice of law of the arbitration agreement, the law of the main contract will also apply to the arbitration agreement. If no such agreement exists, the law of the seat of the arbitration will apply.

6.2 Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?

Yes, the tribunal shall decide the dispute in accordance with the substantive law agreed by the parties. Failing any designation by the parties, the tribunal shall apply the substantive law which it considers appropriate.

The tribunal may also decide ex aequo et bono if the parties have expressly authorised it to do so. In all cases, the tribunal shall make its decision in accordance with the terms of the contract and the relevant trade customs.

7 Consolidation and third parties

7.1 Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?

There are no specific provisions in the Arbitration Act in this respect. Such matter, if not regulated in an agreed set of arbitration rules, will thus be subject to the tribunal's determination.

7.2 Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?

There are no specific provisions in the Arbitration Act in this respect. Such matter, if not regulated in an agreed set of arbitration rules, will thus be subject to the tribunal's determination.

7.3 Does an arbitration agreement bind assignees or other third parties?

There are no specific provisions in the Arbitration Act in this respect. However, Slovenian case law and legal writing support the position that the arbitration agreement binds the assignee.

8 The tribunal

8.1 How is the tribunal appointed?

The parties are free to agree on the procedure for appointing the tribunal, subject to the following mandatory provisions of the Arbitration Act:

  • Where there are three arbitrators, each party shall appoint one arbitrator and the two party-appointed arbitrators shall appoint the third arbitrator as the president of the tribunal;
  • If the parties fail to agree on a sole arbitrator, either party may request the court to make the appointment; and
  • If the party-appointed arbitrators fail to agree on the chair within 30 days of receipt of a request to do so from the other party or within 30 days of their appointment, a party may request the court to make this appointment.

The above mandatory provisions also apply if the parties agree on the appointment procedure, but:

  • one party fails to act as required under such procedure;
  • the parties or the party-appointed arbitrators are unable to reach agreement as envisaged under such procedure; or
  • a third party, including an arbitral institution, fails to perform a function entrusted to it under such procedure.

Any party may request the court to take necessary measures to appoint an arbitrator, unless the appointment procedure provides other means for securing the appointment(s).

8.2 Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?

The parties are free to agree on the number of arbitrators. In the absence of such agreement, the default number of arbitrators under the Arbitration Act is three.

There are no special requirements as to the qualification of arbitrators (eg, an arbitrator need not be a lawyer or admitted to the Bar). Generally, unless the parties have agreed otherwise, anyone with the capacity to enter into legal transactions may be appointed as arbitrator. Specifically, the Arbitration Act stipulates that, unless the parties have agreed otherwise, nationality is not a reasonable ground for precluding someone from acting as an arbitrator.

8.3 Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?

There are limited grounds for challenging an arbitrator under the Arbitration Act. Arbitrators may be challenged only where:

  • circumstances give rise to justifiable doubts as to their impartiality or independence; or
  • the arbitrator does not possess qualifications agreed on by the parties.

Moreover, a party may challenge an arbitrator whom it has appointed (or in whose appointment it has participated) only for reasons of which it becomes aware subsequent to the appointment.

If an arbitrator becomes unable to perform the duties of an arbitrator, the arbitrator's mandate shall terminate if the parties so agree or if the arbitrator withdraws. If no agreement is reached or the arbitrator does not voluntarily withdraw, any party may request the court to rule on the issue.

8.4 If a challenge is successful, how is the arbitrator replaced?

A replacement arbitrator is appointed according to the rules that applied to the appointment of his or her predecessor.

8.5 What duties are imposed on arbitrators? Are these all imposed by legislation?

The duties of an arbitrator, while not specifically regulated, may be inferred from the Arbitration Act (eg, to act impartially and conduct the arbitration proceedings pursuant to the procedural rules).

8.6 What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?

(a) Procedure, including evidence?

If the parties have not agreed upon a procedure to be followed or referred to institutional rules, then the tribunal shall conduct the arbitration in the manner it considers appropriate.

In the absence of agreement between the parties, the tribunal shall decide whether to hold an oral hearing or whether the proceedings shall be conducted based on written submissions only. However, should a party request an oral hearing, the default rule under the Arbitration Act is that an oral hearing is required.

(b) Interim relief?

Unless the parties have agreed otherwise, the tribunal may (while honouring the parties' right to be heard on the issue) order any interim measures it considers necessary to protect the subject matter of the proceedings. The tribunal may require the party requesting interim measures to provide appropriate security. While the tribunal has the power to order interim measures which are binding on the parties, only the court has the power to enforce them.

(c) Parties which do not comply with its orders?

The tribunal may, for example, continue with the proceedings and render an award even if one of the parties does not participate (eg, if the defendant fails to submit its statement of defence within the specified timeframe). It may also consider such non-compliance when deciding on the costs of the proceedings. Generally, however, the tribunal lacks coercive powers.

(d) Issuing partial final awards?

There are no specific provisions under the Arbitration Act which would allow for the issuance of a partial award. However, such power may be inferred from the general power of the tribunal (unless the parties have agreed otherwise) to determine procedural rules.

(e) The remedies it can grant in a final award?

There are no limitations under the Arbitration Act on the types of remedies that can be granted in an award.

(f) Interest?

Under Slovenian law, this is a matter of substantive law.

8.7 How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?

The tribunal may continue with the proceedings and render an award even if one of the parties does not participate. The proceedings may be continued in the absence of a party if:

  • the respondent fails to communicate its statement of defence within the agreed or ordered timeframe; or
  • any party fails to appear at a hearing or to produce documentary evidence.

If the claimant fails to file a statement of claim in accordance with the agreement of the parties or the provisions of the Arbitration Act, the tribunal may terminate the proceedings.

8.8 Are arbitrators immune from liability?

The Arbitration Act contains no provisions in this respect.

9 The role of the court during an arbitration

9.1 Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?

Yes, provided that the defendant objects to the court's jurisdiction at the latest in its reply to the lawsuit, and unless the court finds that the arbitration agreement:

  • does not exist;
  • is null and void;
  • has ceased to be valid; or
  • is incapable of being performed.

9.2 Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?

The court has the power to decide on the following matters:

  • the admissibility of arbitration proceedings;
  • the appointment of an arbitrator;
  • the challenge of an arbitrator;
  • termination of the mandate of an arbitrator;
  • the jurisdiction of the tribunal;
  • setting aside of the arbitral award;
  • declaration of enforceability of domestic awards and recognition of foreign awards; and
  • interim measures relating to the subject matter of the arbitration.

The court's powers listed under the first to seventh points above apply only to arbitration seated in Slovenia. However, if the seat of arbitration has not yet been determined, the court has jurisdiction to decide matters referred to under the second, third and fourth points above, provided that one of the parties has its permanent or temporary residence in Slovenia. This rule applies until the seat of arbitration is determined.

Moreover, the court may assist in taking evidence or in taking another action that the tribunal is not empowered to take upon the tribunal's request or upon the request of a party with the tribunal's approval.

9.3 Can the parties exclude the court's powers by agreement?

No.

10 Costs

10.1 How will the tribunal approach the issue of costs?

Unless the parties have agreed otherwise, the tribunal will decide on the costs of the proceedings at the request of a party in the final award or in a separate order. The tribunal will decide which party, and in what amount, shall reimburse the other party for the costs of the proceedings, including the costs of legal representation and the arbitrators' fees. The tribunal renders this decision at its own discretion, having regard to the circumstances of the case and the outcome of the proceedings.

10.2 Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?

There are no specific restrictions.

11 Funding

11.1 Is third-party funding permitted for arbitrations seated in your jurisdiction?

There are no specific provisions in the Arbitration Act in this respect. As yet, there is no case law on the matter and a difference of opinion in legal commentary as regards the permissibility of (certain types of) third-party funding.

12 Award

12.1 What procedural and substantive requirements must be met by an award?

The award shall be made in writing and shall be signed by the arbitrator(s). If there is more than one arbitrator, the signatures of the majority of the tribunal will suffice, provided that the reasons for any omissions are stated. The award must state the reasons upon which it is based (unless the parties have agreed otherwise), the date of issue and the seat of the arbitration. Each party has a right to receive a copy of the signed award.

12.2 Must the award be produced within a certain timeframe?

The Arbitration Act does not contain such a requirement.

13 Enforcement of awards

13.1 Are awards enforced in your jurisdiction? Under what procedure?

Domestic awards are enforceable once the court issues a declaration to this effect. The court may reject an application for enforcement of an award if it finds that the subject matter is not arbitrable or that the award violates ordre public.

Foreign awards are enforceable when recognised by the court (Slovenia is a party to the New York Convention). The party applying for enforcement of an award shall supply the original award or a copy thereof. Additionally, the court may request that a party provide an original or certified copy of the arbitration agreement.

14 Grounds for challenging an award

14.1 What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?

An award may be set aside by the court if:

  • the party which has brought the action before the court furnishes proof that:
    • one of the parties to the arbitration agreement was incapable of concluding it;
    • the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under Slovenian law;
    • the party bringing the action was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings, or was otherwise unable to present its case;
    • the award concerns a dispute not falling within the scope of the arbitration agreement or contains decisions on matters beyond its scope; or
    • the composition of the tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was contrary to a provision of the Arbitration Act from which the parties cannot derogate or, in absence of such agreement, was not in accordance with the Arbitration Act; or
  • the court finds ex officio that:
    • the subject matter is not arbitrable; or
    • the award is contrary to the Slovenian ordre public.

14.2 Are there are any time limits and/or other requirements to bring a challenge?

A party may bring an action to set aside an award within three months of the date on which it receives the award.

14.3 Are parties permitted to exclude any rights of challenge or appeal?

No, the parties are not permitted to waive the right to have the award set aside in advance.

15 Confidentiality

15.1 Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?

The Arbitration Act makes no provision for a duty of confidentiality in arbitration.

15.2 Are there any exceptions to confidentiality?

Please see question 44.

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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