international arbitral centre of the austrian federal economic chamber the international arbitral...

International Arbitral Centre of theAustrian Federal Economic Chamber

The International Arbitral Centre of the Austrian Federal Economic Chamber

and the Vienna Rules 2006

The International Arbitral Centre of the Austrian Federal Economic Chamber

(VIAC) is an Arbitral Institution

Arbitration is either• Ad-Hoc Arbitration The parties themselves administer the proceedings until the Arbitral Tribunal is constituted; if a party fails to nominate its Arbitrator, the appointment shall be effected by the courts of

law• Ad-hoc Arbitration with an Appointing Authority, mentioned

in the arbitral agreement• Ad-hoc Arbitration with an Appointing Authority and binding Rules of Arbitration (UNCITRAL etc.)• Institutional Arbitration with a Secretariat, an Appointing

Authority and binding Rules of Arbitration (Vienna Rules, ICC, LCIA, DIS, etc.)

VIAC‘s Bearer Institution and Bodies

Austrian Federal Economic Chamber (AFEC)

• VIAC is an independent department of AFEC• AFEC appoints VIAC’s bodies • AFEC determines the Rules of Arbitration (Vienna Rules)

upon recommendation by the Board

• International Arbitral Centre‘s (VIAC) bodies• Board, headed by the President• Secretary General• Sole Arbitrator or Arbitral Tribunal consisting

of three Arbitrators

• International Advisory Body (International experts, consultants only, invited by the Board)

• Secretary General and other staff are employees of AFEC• Members of the Board and Arbitrators are not employees)

VIAC‘s Bearer Institution and Bodies

VIAC is an Arbitral Institution

VIAC is no Arbitral Tribunal

It supports the parties before the Arbitral Tribunal is constituted:• service of documents (Statement of Claim, Memorandum in

Reply, Counter-claim, etc.)• appointment of Arbitrators• collection of deposits for procedural costs

VIAC is an Arbitral Institution

VIAC accompanies the arbitral proceedings: • decision upon challenge of an arbitrator because

• his/her independence or impartiality are in doubt

• non compliance with his/her duties• assistance to the parties (interpreters, court rooms, etc.)

VIAC terminates the arbitral proceedings:• service of the arbitral award• determination of the arbitrators‘ fees• deletion from the list of pending cases

Vienna Rules 2006

Why new Vienna Rules ?• New Arbitration Act (Schiedsrechtsänderungsgesetz) 2006,

BGBl. I Nr. 7/2006, in force since 1 July 2006• Improvement of language• Implementation of experience• Applicable to all proceedings in which the claim was filed

after 30th June 2006

• VIAC’s organisation

• VIAC’s jurisdiction

• Proceedings prior to the transmission of files to the

arbitrator(s) (pre-arbitral proceedings)• Conduct of the proceedings• Arbitral Award• Determination of Costs

The Structure of the Vienna Rules

VIAC‘s Organisation The Board

Appointed by the Extended Board of AFEC upon recommendation of the President of the Board for a period of five years

• At least five members • Not subject to instructions• No employees of AFEC

VIAC‘s Organisation The Board

• Most important tasks:• Election of one of its members as chairman• Appointment of arbitrators (in lieu of defaulting parties)• Appointment of chairpersons of arbitral tribunals

(in lieu of defaulting arbitrators)• Advice to the Secretary• Correspondence with the Board shall be conducted

in English or German• Decisions may be made by correspondence

VIAC‘s Organisation The President of the Board

• The Board elects one of its members as President.

• The President presides over the Board meetings.• Where the president is prevented, the member

who11 is oldest by age shall take over his task.

VIAC‘s OrganisationThe Secretary General

• Appointed by the Board of AFEC for a period of five years• employee of AFEC• not subject to instructions

VIAC‘s OrganisationThe Secretary General

• Administers the cases• Determines procedural costs• Provides information regarding the law on enforcement and

the enforcement practice of the country in which the award is to be enforced• Performs all duties not being reserved to the Board or to the

Arbitral Tribunal

Correspondence with the Secretary General shall be conducted in English or German.

VIAC‘s OrganisationThe Arbitrator(s)

Sole arbitrator:

Nominated by agreement of the parties or by the Board of the VIAC

Arbitral tribunal

2 arbitrators nominated by parties

Chairperson appointed by the co-arbitrators or by theBoard of the VIAC

VIAC‘s OrganisationQualification of he Arbitrator(s)

Any person with legal capacity shall be eligible, except professional judges ( Richterdienstgesetz)

Parties may agree on additional special qualification (Nationality, qualification in a particular (technical or legal) field).

Arbitrators do not have to be lawyers.

Arbitrators must perform their services in complete independence and impartiality.

Arbitrators have to disclose circumstances likely to give rise to doubts as to their impartiality or independence.

VIAC‘s OrganisationRelation between VIAC and the Arbitrator(s)

• VIAC is mediator between parties and arbitrators.• Secretary General concludes contract with arbitrators on behalf

of the parties and fixes arbitrators fees (prepaid by the parties)• Publication of Vienna Rules is no offer but may lead to an

obligation to conclude a contract.• Offer is the filing of the law suit. Acceptance by VIAC on behalf

of the parties is the submission of the law suit to the defendant under the condition that the tribunal will accept its competence.

• Consequence: In case of lack of jurisdiction the arbitrators may not award compensation of costs.

• liability of VIAC vis a vis parties for failures of arbitrators limited to negligent selection of arbitrators (“Auswahlverschulden”).


Termination of the mandate of an arbitrator:

• Parties agree to the termination (consent of the arbitrator required ?)

• The arbitrators withdraw from office (responsibility for additional costs?)

• A challenging motion is granted (responsibility of the Board?)

• The arbitrator is removed from his office by the Board• The proceeding has ended


Grounds for challenge:• His/her independence or impartiality are in doubt

Procedure:• Challenging motion to VIAC’s Secretariat• Decision by VIAC’s Board after having obtained the

challenged arbitrator’s comments. Comments may also be taken from other persons.

• Arbitral proceedings continue despite challenge• However, an award shall be rendered only after the Board’s decision


Grounds for early termination of the mandate:• Longer incapacitation• Failure to perform his/her duties• Undue delay of proceedings

Procedure:• Motion for termination to VIAC’s Secretary General• Decision by VIAC’s Board after having obtained the

concerned arbitrator’s comments• In case of a longer incapacitation, the mandate may be

terminated even ex-officio


Consequences of successful challenge or termination of mandate:• Parties shall be requested to appoint (again) a sole arbitrator

or to nominate (again) an arbitrator• If the chairperson is removed: Arbitrators shall be requested

to appoint (again) a chairperson• In case of default with nomination or appointment,

arbitrator/chairperson shall be appointed by the Board in lieu

of defaulting parties/arbitrators

VIAC’s JurisdictionRequirements for arbitration

under the Vienna Rules

• At least one party shall have its residence or place of business outside of Austria, or

• Dispute must be “of international character”

Agreement upon VIAC’s jurisdiction includes application of Vienna Rules

Domestic parties and dispute without “international character”:• Jurisdiction of the Permanent Arbitral Tribunal of the Vienna Economic Chamber or of the regional chamber of the agreed venue of arbitration (if any)• Conduct of the proceedings in accordance with the rules of the Permanent Arbitral Tribunals of the regional chambers

VIAC’s JurisdictionChecking of jurisdiction

• Checking of jurisdiction includes checking of – Validity of the arbitration agreement– Requirements for jurisdiction under Vienna Rules– Arbitrability

• First checking by the Secretary General on the basis of prima facie evidence

• Second checking by the arbitral tribunal in detail, if a plea is raised by a party in time, that the tribunal has no jurisdiction.

• Final checking by the state court under § 611 ZPO = Code of Civil Procedure

VIAC’s JurisdictionArbitrability

Art. 582 para 1 ZPO = Code of Civil Procedure

(1) Any pecuniary claim that lies within the jurisdiction of the courts of law can be subject of an arbitration agreement. An arbitration agreement on non-pecuniary claims shall be legally effective insofar, as the parties shall be capable of concluding a settlement upon the matter of the dispute.

VIAC’s JurisdictionArbitrability

(2) Claims in matters of family law as well as all claims based on contracts that are even only partly subject to the Austrian Landlord and Tenant Law (Mietrechtsgesetz) or to the Austrian Residential Public Benefit Law (Wohnungsgemeinnützigkeitsgesetz), including all disputes regarding the concluding, existing, termination and the legal characterization of such contracts and all claims resulting from or in connection with flat property (cooperative apartment ownership) may not be made subject to arbitral proceedings. Statutory provisions which are not included in this chapter and according to which disputes may not, or may only under certain circumstances be made subject to arbitral proceedings, shall not be affected.”

VIAC’s JurisdictionVenue of Arbitration

Venue of Arbitration is Vienna (if not agreed upon otherwise)

Legal importance of venue of the arbitration:– Nationality of the arbitral award– Enforceability– Applicable procedural and substantive law

Practical consequences:– Visa requirements– Costs (travelling etc.)– Services

Proceedings prior to the Transmission of the Files to the Arbitral Tribunal

Statement of Claims

Mandatory content:• Designation of parties and their addresses• Specific statement of claims including the particulars and the supporting documents on which the claims are based• Amount in dispute (unless claims are not related to a sum of

money)• Particulars regarding the number of arbitrators• If a tribunal of three arbitrators is requested, nomination of

an arbitrator


Statement of Claims

A copy of the agreement specifying VIAC’s jurisdiction must be attached to the Statement of Claims

One copy of the Statement of Claims together with enclosures must be submitted for each defendant, each arbitrator and the secretariat


Statement of Claims

Incomplete Statement of Claims:• Secretary shall request Claimant to remedy the defect, setting a time-limit

Agreement on VIAC’s jurisdiction includes provisions which conflict with Vienna Rules:• Board may return the Statement of Claims to Claimant as

not suitable for further action


Memorandum in Reply

Time-limit: 30 days

Mandatory content:• Reply to the pleadings in the Statement of Claims• Particulars regarding the number of Arbitrators• If a Tribunal of three Arbitrators is requested, nomination of

an Arbitrator

One copy of the Memorandum in Reply together with enclosures must be submitted for each Claimant, each Arbitrator and for the Secretariat


Counter-Claims

Requirements:• Identical parties• Arbitration agreement constitutes the jurisdiction of the VIAC• Can be raised until closure of the evidentiary proceedings

Arbitrator(s) request(s) Counter-Defendant to submit a Memorandum in Reply to Counter-Claim setting a time-limit

If Counter-Claim is incomplete or would lead to a substantial delay in main proceedings• Return of Counter-Claim to Secretariat to open separate proceedings


Appointment of Arbitrators

Parties agree on:• Sole arbitrator• Tribunal (3 arbitrators)

In absence of such an agreement, VIAC’s Board shall determine the number of arbitrators, considering:• difficulty of the case• amount in dispute• interest of parties in a rapid and cost-effective decision



Parties shall be requested to• agree on a sole arbitrator indicating his/her name and address• nominate arbitrators

If parties fail to do so:

VIAC’s Board appoints sole arbitrator /the arbitrator to be nominated by the Defendant

Sanction against defaulting claimant:Deletion from the list of pending cases



Arbitrators nominated by parties/appointed by Board are requested to agree on a chairperson

If Arbitrators fail to do so:

VIAC’s Board appoints chairperson

Basic Procedural ProvisionsMultiparty Proceedings - Requirements

Claim of one or more Claimants: They must have agreed on a common arbitrator.

Claims against two or more Defendants

Essential requirement:• VIAC’s jurisdiction for all parties

Additional requirements

• All-Party-Agreement on sole arbitrator’s person

or • All Defendants nominate the same arbitrator

Basic Procedural ProvisionsMultiparty Proceedings - Requirements

Alterrnative Requirements (Defendants do not accept multiparty jurisdiction):• If the claim is to be directed against several persons according to substantive law (uniform joinder of parties), or

• If all parties are bound by the same arbitration agreement, or

• If all parties have agreed upon multiparty proceedings, or

• If all Defendants submit to multiparty proceedings and

nominate the same arbitrator, or

• If Defendants fail to state whether a sole arbitrator or an

arbitral tribunal shall decide the case, or if Defendants fail to

nominate an arbitrator (the respective decision of VIAC’s

Board is valid for all Defendants)

Basic Procedural ProvisionsMultiparty Proceedings - Service

The statement of claim must be served on all Defendants

If service is not possible to all Defendants:

• Upon Claimant´s request arbitral proceeding is continued only against those Respondents on whom the claim was served

• Proceeding against other Respondents are subject to a separate proceeding.

Basic Procedural ProvisionsMultiparty Proceedings


If all parties have agreed on multiparty proceedings, Defendants shall (also) agree on

• the number of arbitrators (sole arbitrator or arbitral tribunal)

• the person of the sole arbitrator or on• the person of the arbitrator to be jointly nominated

If Defendants fail to do so:

• decision or nomination by VIAC’s Board

Basic Procedural ProvisionsMultiparty Proceedings

Consolidation

Consolidation (joinder) of proceedings admissible if

• in all disputes the same arbitrators have been appointed,

• all the parties agree, and

• the arbitrator(s) agree(s)

Basic Procedural Provisions Time-Limits, Services and Communications

Time-limits:

• observed, if documents are dispatched on the last day of the period • time while documents are in transit (mail or courier service) does

not count

• Prolongation either by Secretary General (Pre-Arbitral Proceedings)

or by Arbitrator(s)

Service by:

• registered letter

• courier service

• telefax

• other means that guarantee evidence of transmission

Address for service:

• the address most recently notified to Secretariat or to Arbitrator(s)

• the address of the parties’ representatives

Conduct of the Arbitral Proceedings

Basic procedural principles:

• Equal treatment of parties• Right to be heard• Arbitral Tribunal is free to conduct the proceedings at its

discretion


Further procedural principles:

• Arbitrator(s) may take evidence ex-officio• Participation of Defendant not required, but no default judgement• Immediate objection on violation of procedural rules required

• Before terminating proceedings, Arbitrator(s) shall consult

parties and shall announce the termination.

• Parties may be represented by authorised agents


Language of proceedings determined by• agreement between parties, or• Arbitrator(s)

Proceedings can be

• oral (recorded hearing), or

• in writing

Parties have the right to file submissions


Interim Measures of Protection

• by order of Arbitrators• only parties are bound by such measures

• Arbitrator(s) may require the requesting party to provide

appropriate security

• parties are not prevented from applying to any competent

State organ, but are obliged to inform VIAC’s Secretariat and

Arbitrators


Substantive law designated by:

• Parties (designation does not include conflict of law rules)• Conflict of Law Rules

Decisions on equity:•Arbitrator(s) must be expressly empowered by parties


• No interruption and suspension of proceedings (in

principle)• Parties must pursue the proceedings with due expedition • Proceedings may be interrupted until the resolution of a

preliminary question


The proceedings are terminated by

• Rendering of an award

• Conclusion of a settlement• Withdrawal of the Claim by the Claimant unless Respondent objects and has a legitimate interest of obtaining a final settlement or award• by agreement of the parties• arbitrators find that continuation becomes impossible (no continuation by the parties)

Arbitral Award

Formal requirements:

• Award shall be in writing• Award shall include statement of grounds (waiver of grounds possible)• Signatures of (the majority of) Arbitrator(s) and of the

Secretary General

• Declaration of majority decision (at the request of the

dissenting Arbitrator)

Arbitral Award

• Partial and interim awards may be issued• Award concerning the content of a settlement (Consent

Award) may be issued• Confirmation of the finality and enforceability by the sole

arbitrator or the chairman of the arbitral tribunal

• Clerical, typographical of computation errors as well as other

obvious inaccuracies in the award may be corrected

• Award may be published in anonymous form

• Parties are bound to implement the award

Costs of the Proceedings

Procedural costs are

• Costs of arbitration

• Administrative charges

• Arbitrators’ fees

• Cash outlays (Arbitrators’ travel expenses, photocopies,

faxes, etc.)

• Costs of parties

• Expenses of parties (cash outlays, lawyers’ fees)

• Other procedural expenses (experts, translation, taking of minutes, visual inspections etc.)


Determination of

• the costs of parties by Arbitrator(s)• the costs of arbitration by the Secretary General


Registration Fee:

• Registration fee to be paid by Claimant• Registration fee covers the Secretariat’s costs until files are

transmitted to arbitrator(s)

• Deletion from the list of cases, if registration fee is not paid• Joint party supplement of 10% for each additional party

• No refund of registration fee


Money Deposit:

• Deposit against costs of arbitration fixed by Secretary General• Payable by parties in equal shares • Registration fee to be deducted from Claimant’s share• Deletion from the list of cases, if Claimant fails to pay its

share

• Prescription of Defendant’s share to Claimant, if Defendant

fails to pay its share

• Deletion from the list of cases, if Claimant fails to pay

Defendant’s share• Same procedure when deposit shall be increased

Costs of the Proceedings Calculation of arbitral costs

• Fee schedule (based upon the amount in dispute)• Joint party supplement of 10% for each additional party• Separate calculation of costs for individual claims admissible• Reductions of the amount in dispute shall be cost-effective

only before transmission of files to arbitrator(s)• Cash outlays shall be determined according to the actual

expenditure


Other procedural costs (experts, interpreters, etc.):

• Money Deposits fixed by arbitrator(s)• Undertaking of procedural steps only after payment of

deposits• In default of payment: the arbitrator(s) shall decide on the

consequences (i.e. non-performance of procedural steps)


Bearing of the costs:

• Statement on costs in the award• Costs may be split up between parties

Judicial Control

Article 611 (1) ZPO:

„An appeal to a court against an arbitral award may be made only by means of an action for setting aside. This shall also apply to arbitral awards by which the arbitral tribunal has ruled on its jurisdiction.

(2) An arbitral award shall be set aside if:

1. a valid arbitration agreement does not exist, or if the arbitral tribunal denies its jurisdiction despite the existence of a valid arbitration agreement, or if a party was under some incapacity to conclude a valid arbitration agreement under the law which was personally relevant to that party;

2. a party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was for other reasons unable to present his case;

Judicial Control

3. the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration or beyond the plea of the parties for legal protection, provided that, if the default concerns only a part that can be separated from the award, only that part of the award shall be set aside;

4. the composition of the arbitral tribunal was not in accordance with a provision of this section or with an admissible agreement of the parties;

5. the arbitral procedure was not carried out in accordance with the fundamentals of the Austrian legal system (ordre public).

Judicial Control

6. the requirements have been met according to which a judgement of a court of law can be appealed by an action for revision under Article 530 paragraph 1, numbers 1 to 5;

7. the subject-matter of the dispute is not capable of settlement by arbitration under the law of this state; 8. the award is in conflict with the fundamentals of the Austrian legal system (ordre public).

THE END

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