dispute resolution - lund elmer sandager · icc arbitration parties, co-arbitrators or directly by...

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Dispute ResolutionContributing editorSophie Lamb

2017© Law Business Research 2017

Dispute Resolution 2017Contributing editor

Sophie LambLatham & Watkins

PublisherGideon [email protected]

SubscriptionsSophie [email protected]

Senior business development managers Alan [email protected]

Adam [email protected]

Dan [email protected]

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CONTENTS

2 Getting the Deal Through – Dispute Resolution 2017

Introduction 7Sophie LambLatham & Watkins

Australia 8Colin Loveday and Alexandra RoseClayton Utz

Austria 14Philipp Strasser and Dieter HeineVavrovsky Heine Marth Rechtsanwälte GmbH

Belgium 19Hakim Boularbah, Olivier van der Haegen and Charlotte Van ThemscheLiedekerke Wolters Waelbroeck Kirkpatrick

Brazil 30Gilberto Giusti and Fernanda Marques Dal MasPinheiro Neto Advogados

Canada – Ontario 37Shaun Laubman and Ian MatthewsLax O’Sullivan Lisus Gottlieb LLP

Canada – Quebec 43James A Woods, Christopher L Richter, Marie-Louise Delisle and Léanie CardinalWoods LLP

Cayman Islands 48Guy Manning, Mark Goodman and Kirsten HoughtonCampbells

Cyprus 54Andreas Erotocritou and Antreas KoualisA G Erotocritou LLC

Denmark 60Morten Schwartz Nielsen and Mikkel Orthmann GrønbechLund Elmer Sandager

Dominican Republic 66Enmanuel Montás and Yanna MontásMS Consultores

Egypt 71Zaki Hashem & Partners

England & Wales 76Sophie Lamb, Kavan Bakhda and Aleksandra ChadzynskiLatham & Watkins

Germany 87Karl von HaseLuther Rechtsanwaltsgesellschaft mbH

Hong Kong 94Simon Powell and Chi Ho KwanLatham & Watkins

Hungary 101Csaba Pigler and Viktor JégerNagy és Trócsányi Ügyvédi Iroda

India 108Vivek Vashi, Kanika Sharma and Hrushi NarvekarBharucha & Partners

Israel 120Jeremy Benjamin and Ido PirkesGoldfarb Seligman & Co

Italy 126Stefania De MicheleCarnelutti Law Firm

Japan 132Tetsuro Motoyoshi and Akira TanakaAnderson Mōri & Tomotsune

Liechtenstein 138Stefan Wenaweser and Christian RitzbergerMarxer & Partner Attorneys-at-Law

Luxembourg 145Joram Moyal and Claver MessanMMS Avocats

Macedonia 150Tatjana Popovski Buloski and Aleksandar DimicPolenak Law Firm

Mexico 157Fernando Del Castillo, Carlos Olvera and Roberto Fernández del ValleSantamarina y Steta

Netherlands 162Jeroen Stal, Niek Peters and Maarten DropCleber NV

Nigeria 168Babajide O Ogundipe and Lateef O AkangbeSofunde, Osakwe, Ogundipe & Belgore

Norway 173Terje GranvangArntzen de Besche Advokatfirma AS

Panama 178Evans Gonzalez and Fernando AuedPatton, Moreno & Asvat

Romania 183Cosmin VasileZamfirescu Racoţi & Partners Attorneys at Law

Russia 188Sergey ChupryginIvanyan & Partners


www.gettingthedealthrough.com 3

CONTENTS

Singapore 201Edmund J Kronenburg and Tan Kok PengBraddell Brothers LLP

Spain 209Javier Izquierdo and Marta MaciáGómez-Acebo & Pombo Abogados, SLP

Sweden 216Erik Wernberg and Fredrik ForssmanAdvokatfirman Cederquist

Switzerland 223Roman Richers and Roman BaechlerHomburger AG

Turkey 229Sidika Baysal, Mustafa Basturk and Gizem OnerB+B Law Firm

Ukraine 235Pavlo Byelousov and Oleksandr MamunyaAequo Law Firm

United Arab Emirates 243Faridah SarahGaladari Advocates & Legal Consultants

United States – California 248Peter S SelvinTroyGould PC

United States – Federal Law 255Robert M Abrahams, Robert J Ward and Caitlyn SlovacekSchulte Roth & Zabel LLP

United States – New York 261Robert M Abrahams, Robert J Ward and Caitlyn SlovacekSchulte Roth & Zabel LLP

Venezuela 267Carlos DominguezHoet Peláez Castillo & Duque



PREFACE

Getting the Deal Through is delighted to publish the fifteenth edition of Dispute Resolution, which is available in print, as an e-book and online at www.gettingthedealthrough.com.

Getting the Deal Through provides international expert analysis in key areas of law, practice and regulation for corporate counsel, cross-border legal practitioners, and company directors and officers.

Throughout this edition, and following the unique Getting the Deal Through format, the same key questions are answered by leading practitioners in each of the jurisdictions featured. Our coverage this year includes new chapters on Australia, Austria, Italy, Liechtenstein, the Netherlands, Panama and Spain.

Getting the Deal Through titles are published annually in print. Please ensure you are referring to the latest edition or to the online version at www.gettingthedealthrough.com.

Every effort has been made to cover all matters of concern to readers. However, specific legal advice should always be sought from experienced local advisers.

Getting the Deal Through gratefully acknowledges the efforts of all the contributors to this volume, who were chosen for their recognised expertise. We also extend special thanks to the contributing editor, Sophie Lamb of Latham & Watkins, for her assistance with this volume.

LondonJune 2017

PrefaceDispute Resolution 2017Fifteenth edition


Latham & Watkins INTRODUCTION


IntroductionSophie LambLatham & Watkins

Welcome to the 2017 edition of Getting the Deal Through – Dispute Resolution.

I write these introductory remarks as I pass my first anniversary at Latham & Watkins as the Global Co-Chair of the International Arbitration Practice. Change is a theme that we are witnessing on a global scale – whether it is legal, political or professional – not least over this past year.

Within the legal industry we have been left considering the poten-tial impact of Brexit on the UK’s financial sector and the relationship between the English courts and other EU courts as we move forward. For now, all EU legislation will be transposed into domestic law under the UK’s Great Repeal Bill. Looking to the future, there are plans to introduce a legislative framework for the UK similar to the Brussels Regulation, which addresses issues of jurisdiction and enforcement of judgments between EU member states.

The status of London as a pre-eminent seat for international arbi-tration has never depended on membership of the EU, as it is the New York Convention that provides the legal infrastructure for the recogni-tion and enforcement of arbitral awards in over 150 countries. Other leading centres for international arbitration, including Hong Kong and Singapore and those in Switzerland, have thrived wholly outside of the EU. While the wider impact of Brexit remains to be seen, Brexit may even strengthen the UK’s offering as an arbitration centre to the extent that, for example, the EU prohibition on anti-suit injunctions (including in cases where arbitration agreements are breached) will no longer apply.

The English common law will not be negatively impacted by Brexit. It has long been chosen by commercial actors and is one of the pre-ferred governing laws in contracts the world over for reasons that are unrelated to the UK’s membership of the EU. Its certainty and predict-ability in commercial matters over a sustained period of time together with the stellar reputation of the English judiciary are enduring factors on which Brexit can have no impact.

There have been some noteworthy changes affecting certain other jurisdictions within the dispute resolution market. For instance Russia has implemented several changes to its arbitral landscape, notably that arbitral institutions must now be registered with the Russian Ministry

of Justice. In the UAE, article 257 of the Penal Code has been amended so that arbitrators who fail to maintain ‘integrity’ and ‘impartiality’ may face criminal liability. Finally, transparency continues to be a key focus. At the end of 2015, the International Chamber of Commerce announced that it would publish reasons for its decisions on adminis-trative matters. In January 2016 it was announced that the names and nationalities of all arbitrators and chairs presiding over ICC matters would also be published. The drive to achieve greater transparency has gathered momentum. In April 2017, Switzerland ratified the Mauritius Convention, which extends the application of the UNCITRAL rules on transparency to investor-state disputes under investment treaties.

Any discussion of reform, and indeed change, would be incomplete without mention of important initiatives to improve diversity in the field of dispute resolution. In recognition of the under-representation of women on international arbitral tribunals, many members of the international arbitration community, including institutions, law firms and practitioners, have signed a formal pledge for the equal represen-tation of women in arbitration. Certain institutions have also made their own individual commitments to improving diversity including through the publication of diversity statistics. The data published by the International Court of Arbitration of the ICC indicated that women arbitrators represented 14.8 per cent of all arbitrators appointed by ICC arbitration parties, co-arbitrators or directly by the Court in 2016, up 4.4 per cent from 2015 statistics. According to ICC figures, of 1,411 arbitrators appointed in 2016, 209 were women, compared with 136 of 1,313 total arbitrators in 2015. Figures published by the London Court of International Arbitration show that of the 195 arbitrators appointed by the LCIA, 28 per cent were female, though out of 254 appoint-ments by parties or co-arbitrators only 6 per cent were women. In the Stockholm Chamber of Commerce, out of the 101 appointments made by the institution 27 per cent were female, though only 7 per cent of the 178 appointments made by parties or co-arbitrators were women. The courts of England and Wales too have set up a Judicial Diversity Committee to report on progress in this area.

So change is afoot, but with it comes opportunity. I would like to conclude by thanking each of the authors for their insight and contribu-tions to this year’s edition.


AUSTRALIA Clayton Utz


AustraliaColin Loveday and Alexandra RoseClayton Utz

Litigation

1 Court system

What is the structure of the civil court system?

The High Court of Australia is the highest court and exercises both orig-inal and appellate jurisdiction. The majority of the court’s matters are appeals from the appellate divisions of the state and territory Supreme Courts and the Federal Court of Australia after special leave to appeal is granted. Matters heard by the High Court of Australia in its original jurisdiction include challenges to the constitutional validity of laws. Significant matters including constitutional matters are heard by a full court of seven justices assuming they are able to sit. Most other matters are heard by at least two justices. High Court of Australia decisions are binding on all lower courts.

Each of Australia’s six states and two territories has a Supreme Court which is the highest court in that state’s court system (subject only to the High Court of Australia). Each has unlimited civil jurisdiction. The Supreme Court constituted by a single judge hears, at first instance, monetary claims above a certain threshold based on the amount claimed in the proceedings, or claims for equitable relief. In most state Supreme Courts, there are commercial lists that are expressly designed to manage large commercial disputes. Such lists provide intensive case management and a streamlined procedure designed to promote the just, quick and inexpensive resolution of matters.

The appellate division of state courts is the Court of Appeal or Full Court. Typically three judges will hear appeals from single judges of the Supreme Court and from certain other state courts and tribunals. The Court of Appeal has both appellate and supervisory jurisdiction in respect of all other courts in the state system.

Most states have two further levels of inferior courts, which hear matters below the threshold limits for the Supreme Courts. The District Court (in some states called County Court) is the middle court and has jurisdiction over most civil matters within a monetary threshold. Some district courts have commercial lists. There is then the local court (in some states called the Magistrates’ Court), which handles smaller, sum-mary matters.

In keeping with the hierarchy of courts established under the laws of each state, there is also a hierarchy of courts which deal with disputes relating to federal law. The Federal Court of Australia has jurisdic-tion covering almost all civil matters arising under Australian federal law. Most notably, the court has jurisdiction to hear disputes on issues including competition and consumer protection laws, bankruptcy, cor-porations, industrial relations, intellectual property, native title and taxation. The Family Court of Australia has jurisdiction to resolve most complex family law disputes. The Federal Circuit Court hears less com-plex disputes relating to child support, administrative law, bankruptcy, industrial relations, migration and consumer laws.

There are also various tribunals designed to hear specific categories of disputes.

2 Judges and juries

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

Under Australia’s Constitution, the separation of powers doctrine means that the judiciary is independent from the other arms of

government. Judges must act to apply or determine the law indepen-dently and without interference from the parliament or the executive.

Most civil actions are heard by a judge alone. By way of example, in New South Wales the Supreme Court Act stipulates that all civil pro-ceedings are to be tried without a jury unless the court otherwise orders, but the court may make an order for trial by jury on application of a party if the court is satisfied that ‘the interests of justice require a trial by jury in the proceedings’. Parties in defamation proceedings may elect to have a jury appointed unless the court otherwise orders.

3 Limitation issues

What are the time limits for bringing civil claims?

Limitation periods are governed by state and territory legislation and are treated as substantive rather than procedural. Limitation periods vary in terms of length and how they are calculated depending upon the cause of action.

In tort, the cause of action generally accrues from the time the damage was suffered. In contract, the cause of action accrues from the time of the breach.

Parties may agree to suspend (or toll) time limits.

4 Pre-action behaviour

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

In the federal and several state jurisdictions, legislation imposes pre-litigation requirements on parties involved in civil disputes before com-mencing proceedings. Generally, a failure to comply with pre-litigation requirements will not invalidate the proceedings, but the court can take it into consideration when awarding costs.

In the Federal Court of Australia, the parties to a dispute must file a ‘genuine steps statement’, which outlines the steps taken to constitute a sincere and genuine attempt to resolve the dispute.

5 Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Proceedings are commenced by filing an originating process and pay-ment of the applicable filing fee with the registry of the court in which the claim is sought to be heard. Defendants to an action are typically first made aware of a filed claim when it is served on them in accordance with the court rules. In many jurisdictions it is also possible to conduct a search of the court files to determine whether claims have been filed but not served.

Where a document is personally served by the document being left with a person or put down in his or her presence, service is generally effected at that time.

For service of an originating process outside Australia, the relevant court rules will generally provide a power to serve an originating process outside Australia where there is a connection between the jurisdiction and the person’s acts or the consequences of those acts. Australia is a signatory to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial


Clayton Utz AUSTRALIA


Matters. The Convention is designed to simplify the process for serving court documents on international litigants and receiving court docu-ments relating to foreign litigation. It applies in all civil or commercial matters where there is occasion to transmit a judicial or extrajudicial document for service abroad.

Australia is a highly litigious jurisdiction and many courts have a heavy caseload. A variety of means are implemented to manage this caseload including specialist lists, docket judge management, stream-lined interlocutory processes and case management conferences.

6 Timetable

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

Rules relating to the service of an originating process can be located in the civil procedure rules of the relevant jurisdiction. For example, in New South Wales, an originating process must be personally served on each defendant. For most other documents, service can be effected by ordinary service which includes sending documents by post, facsimile and email (where the other party consents). A claim in the Supreme Court once filed is valid if served within six months. A statement of defence must be filed within 28 days after service of the statement of claim, unless otherwise ordered by the court. This time frame does not take into account the fact that in some circumstances it will be neces-sary to seek further and better particulars of the matters pleaded in the statement of claim in order to better understand it.

Timelines for civil claims vary considerably depending upon the complexity of the claim, the volume of evidence to be addressed and the court hearing the dispute. Commercial disputes in specialist lists can be heard and determined within one year. Representative (class action) proceedings may take more than five years.

7 Case management

Can the parties control the procedure and the timetable?

Australian courts have broad case management powers which are gen-erally defined by the relevant court rules. Each court has its own alloca-tion system. Judges have a wide discretion to manage cases as they see fit to ensure that the real issues in dispute are identified and the mat-ter is progressed to trial as soon as possible. Some courts issue stand-ard directions or practice notes that set timetables that the parties are expected to comply with absent special circumstances.

Australian court systems have, over time, introduced methods of court-instigated ‘management’ of litigation. The reforms have involved shifting control of aspects of the conduct of litigation from lawyers to the courts. Australian courts have a wide discretion to impose sanctions (which may include adverse costs orders) on a party that has not com-plied with court orders or directions.

8 Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

There are both common law and statutory requirements to preserve evi-dence pending trial. Severe sanctions may apply for the destruction of evidence. The disclosure process is referred to as ‘discovery’. Discovery is an interlocutory procedure whereby a party can obtain from an oppo-nent the disclosure and subsequent production of documents that are relevant to a fact in issue in the proceedings. Disclosure must be made of all existing documents that the party has in their possession, custody or power. Failure to comply will trigger court sanctions.

While in many jurisdictions an application can be made for pre-action or preliminary discovery, documentary discovery usually occurs once pleadings have closed but before witness statements or affidavits are served.

In most jurisdictions, discovery will be ordered by the court or obtained by filing a notice to produce for inspection of documents con-tained in pleadings, affidavits and witness statements filed or served by the other party. General discovery involves discovery of all documents relevant to a fact in issue, which includes documents that are unhelpful to a party’s case. While most jurisdictions permit an order for general discovery to be made, courts and the parties will usually avoid general discovery by limiting the documents to be discovered to those falling

within a particular category or class. In the Federal Court of Australia, a party must not apply for an order for discovery unless it will facilitate the resolution of the proceedings as quickly, inexpensively and effi-ciently as possible.

In most jurisdictions, where an order for discovery is made by the court, the parties must compile and exchange lists of discoverable doc-uments in the appropriate form prescribed by the relevant court rules. Documents that are not relevant to a fact in issue do not need to be dis-closed. After lists have been exchanged, documents will be produced for inspection by the other party.

9 Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

At common law, there are three elements necessary to establish legal professional privilege over communications passing between a legal adviser and client:• the communication must pass between the client and the client’s

legal adviser;• the communication must be made for the dominant purpose of

enabling the client to obtain legal advice, or for the purpose of actual or contemplated litigation; and

• the communication must be confidential.

The uniform Evidence Acts create a privilege for confidential com-munications made, or prepared, for the dominant purpose of a law-yer providing:• legal advice; or • professional legal services relating to an Australian or overseas pro-

ceeding (including the proceeding before the court), or an antici-pated or pending Australian or overseas proceeding, in which the client is, or may be, or was, or might have been, a party.

‘Dominant’ in this context means the ruling or prevailing purpose. The purpose or intended use for which a document is brought into existence will be a question of fact. Legal professional privilege may be waived or lost where there is conduct inconsistent with the maintenance of the privilege. Advice from lawyers including in-house lawyers must pass these tests in order to be privileged.

Other types of privilege also exist including for example ‘without prejudice privilege’. This involves communications between parties that are generally aimed at settlement. These communications cannot be put into evidence without the consent of parties in the event that negotiations are unsuccessful or later in relation to an application for costs following the determination of liability and damages.

10 Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

Generally in Australia, witnesses provide written statements of their evidence, in the form of affidavits, statutory declarations or witness statements before the hearing. These documents are usually signed under oath or affirmed.

For expert evidence, if a party intends to call expert evidence, the rules of most courts require notice of that intention and an expert wit-ness report to be served in advance of the hearing. There are two pos-sible expert reports that can be admitted in proceedings, a joint report (arising out of a conference of experts) and an individual expert’s report. Unless otherwise ordered, an expert’s evidence in-chief must be given through one or more expert’s reports.

11 Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

As a general rule, witnesses of fact give oral evidence, although some courts can order service of a witness statement in advance. Written statements exchanged before trial may form the basis for evidence-in-chief of a witness at trial. Such documents are ‘read’ onto the record in court, and serve as evidence-in-chief for that witness. Witnesses are then usually cross-examined and re-examined in court by counsel.




With the leave of the court, a hostile or unfavourable witness may be questioned by the party that called the witness as though it were cross-examining the witness with the leave of the court. In re-examination, the witness may only be questioned about matters arising out of the cross-examination, and leading the witness is not permissible.

12 Interim remedies

What interim remedies are available?

Courts have a wide discretion to determine whether to grant interim relief to a party in order to prevent the court process from being frus-trated. In general terms these involve:• Mareva injunctions to prevent a defendant from disposing of assets

to deprive a claimant of the benefit of a judgment; and • possession orders to allow a claimant to take possession of property

that a defendant has retained in breach of a proven prima facie right to possession.

Superior courts have the power to grant relief such as a Mareva injunc-tion to support foreign proceedings. There are two kinds of transna-tional freezing orders: • orders that apply to foreign assets in aid of Australian judicial

proceedings (worldwide orders). These are freezing and ancillary orders made against a person over whom the court has jurisdiction even if they reside overseas and in relation to overseas assets. To prevent harassment of a respondent in multiple actions around the world, the Australian example form of freezing order contains undertakings that must be given by the claimant to the court. These reflect ‘Dadourian guidelines’, which have been laid down by the English Court of Appeal; and

• orders that apply to Australian assets in aid of foreign judi-cial proceedings.

The primary elements for obtaining such an order from an Australian court are:• a foreign judgment or ‘good arguable case’ in a foreign court;• a sufficient prospect of registration or enforcement of the foreign

judgment or prospective judgment in the Australian court;• a danger that the foreign judgment will go unsatisfied; and• satisfaction of discretionary matters (such as the effects on the

respondent and third parties and the diligence and expedience of the applicant in bringing the application).

13 Remedies

What substantive remedies are available?

A judgment is a formal order by a court which concludes the proceed-ings before it.

The judgment can relate to the substantive question in the pro-ceedings, or to a question in an interlocutory application such as an application for an injunction or a notice of motion seeking orders for discovery. Courts are also empowered to make consent, summary and default judgments.

Generally, damages are awarded by to compensate the plaintiff for loss suffered as a result of the defendant’s wrongdoing. In some circum-stances, the court can make orders for other types of damages includ-ing exemplary damages, restitutionary damages, nominal damages and liquidated damages.

While costs orders are generally discretionary, courts will usually make orders in accordance with the principle that ‘costs follow the event’, whereby the unsuccessful party in the litigation pays some por-tion of the successful party’s costs.

Courts are empowered to order interest on awards of damages and costs.

14 Enforcement

What means of enforcement are available?

Domestic judgments can be enforced by writ of execution, garnishee order or charging order.

The registration and enforcement of foreign judgments in Australia is governed by both statute and common law principles. Within the statutory regime, the Foreign Judgments Act 1991 (Cth) governs the procedure and scope of judgments that are enforceable.

Registering a judgment under the Act is a straightforward and cost-effective procedure.

Where Australia does not have an international agreement or the circumstances are not caught by the statute, the foreign judgment can be enforced at common law.

15 Public access

Are court hearings held in public? Are court documents available to the public?

The default position is that court proceedings are conducted in an open court. In commercial disputes, a court can order a confidential hearing or make confidentiality orders to protect intellectual property, trade secrets or commercially sensitive information. Certain court docu-ments such as court orders in the Federal Court of Australia are now available to the public via online portals. In most cases, however, the public must apply for access to documents on the court file. Subject to special circumstances and confidentiality orders, access will normally be granted in respect of materials that been tendered into evidence or otherwise disclosed in open court.

16 Costs

Does the court have power to order costs?

Courts have broad discretion over the costs of all proceedings. In effect, a court can make whatever order as to costs is justified in the circum-stances, but there are generally court rules that govern the exercise of that power.

Ordinarily, costs follow the event, which means a successful liti-gant receives costs in the absence of special circumstances justifying some other order. A party is usually entitled to costs of any issue on which it succeeds assessed on an ordinary basis.

There are two main classes of costs:• Those that arise by virtue of the retainer with the client and are gov-

erned by contract (solicitor/client costs).• Those that arise by order of the court, which can either be on an

ordinary basis (party/party costs) or an indemnity basis (solicitor/client costs). Indemnity costs are usually awarded against a party in circumstances where that party has engaged in unreasonable behaviour in connection with the conduct of the proceedings. An offer of settlement can entitle the party making the offer to obtain costs on an indemnity basis. The offer will not be the only issue that determines the court’s decision on this issue, but it is certainly a key factor.

17 Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

‘No win, no fee’ agreements are often offered by plaintiff law firms in certain cases. Many class action plaintiff firms offer a ‘no win, no fee’ retainer for group members who otherwise could not afford to fund the litigation. In the case of a win, the retainer agreement often contains a provision for payment of an ‘uplift’ fee, in addition to professional costs. This arrangement is permissible subject to the court supervision inher-ent in Australian class actions.

Third-party funding of claims is permitted in Australia and is becoming increasingly prevalent in class actions. The involvement of third-party funders with no pre-existing interest in the proceedings, but who stand to benefit substantially from any recovery from the proceed-ings, is a material consideration in the courts deciding whether to grant security for costs. The courts proceed on the basis that funders who seek to benefit from litigation should bear the risks and burdens that the process entails. Courts have recently recognised the option to make a ‘common fund’ order in class actions where third-party litigation funders are recompensed from the common fund of proceeds obtained by the class as a whole in any settlement or judgment (and not just from class members who have signed a funding agreement).




18 Insurance

Is insurance available to cover all or part of a party’s legal costs?

Most corporate entities are insured for public liability, professional indemnity and directors’ and officers’ liability.

Litigation insurance is not common in Australia but it is pos-sible for parties to obtain coverage, for example, by way of ‘adverse costs insurance’.

19 Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

The Australian representative proceeding (class action) regime is a key feature in the litigation landscape. Outside of North America, Australia is the place where a corporation is most likely to find itself defending a class action.

The Australian representative proceeding regime comprises essen-tially identical rules in the federal court system and the courts of New South Wales, Victoria and Queensland. It has the following impor-tant features: • There is no certification requirement, meaning that there is no

threshold requirement that the proceedings be judicially certified as appropriate to be brought as a class action. Once a class action is commenced it continues until finally resolved by judgment or set-tlement, unless the defendant can convince the court to terminate the proceedings on certain limited grounds.

• There is no requirement that common issues predominate over individual issues.

• The rules expressly allow for the determination of ‘sub-groups’ or even individual issues as part of a class action.

• A representative plaintiff can define the class members by descrip-tion. This means that a person who meets the criteria set out in the class definition will be a class member unless they opt out of the proceedings. If a class member fails to opt out by the specified date, they are included in the proceedings. Therefore, a person can be a class member and bound by the outcome of the proceedings with-out their knowledge or consent, simply on the basis that they fall within the definition.

To commence representative proceedings, claims must satisfy three threshold requirements:• at least seven persons must have claims against the same person

or persons; • the claims of all these persons must rise out of the same, similar or

related circumstances; and • the claims of all of these persons must give rise to at least one sub-

stantial common issue of law or fact.

While public funding via legal aid services is technically available, vig-orous means and merit tests are applied to determine eligibility for aid.

As a general rule, public funds will not be available in commer-cial disputes.

However, third-party funding of claims is permitted in Australia and is becoming increasingly prevalent in class actions.

20 Appeal

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

Grounds for appeal must identify a significant and relevant error of fact or law in the first instance judgment.

Judgments of a civil court in Australia can be appealed to a supe-rior court.

Leave will be required in order to appeal. The relevant court legislation or procedural provisions set out the

relevant rules of appeal. The appellate division of most states is the Court of Appeal or Full

Court, which hears appeals from single judges of the Supreme Court and from certain other state courts and tribunals.

The High Court of Australia is the ultimate court of appeal.

21 Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

The registration and enforcement of foreign judgments in Australia is governed by both statute and common law principles. Within the statutory regime, the Foreign Judgments Act 1991 (Cth) governs the procedure and scope of judgments that are enforceable. Registering a judgment under the Act is a straightforward and cost-effective proce-dure. Where Australia does not have an international agreement or the circumstances are not caught by the statute, the foreign judgment can be enforced at common law.

22 Foreign proceedings

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

Australia is a party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965, which governs the international service of process on a defend-ant who resides in Australia. The primary method for taking evidence in Australia for a foreign proceeding is through the Hague Convention of 18 March 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters (the Hague Evidence Convention).

Australian authorities will not accept any letters of request that require a person to state which documents relevant to the proceed-ings are or have been in their possession, or produce any documents, other than particular documents specified in the letter of request that the requested court believes to be in their possession. Given the strict statutory regime regarding pretrial discovery in Australia, any veiled request for pretrial discovery that circumvents that process is likely to be rejected.

Arbitration

23 UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

Arbitration law in Australia differs based upon whether it is classified as domestic arbitration (both parties to the arbitration agreement have their places of business in Australia), or international arbitration (being anything else). Domestic arbitration in Australia is regulated under the uniform Commercial Arbitration Acts (the Arbitration Acts), which are largely based on the UNCITRAL Model Law. Section 2a of the Acts requires courts to have regard to the Model Law in the process of inter-pretation. There are, however, some important differences between the two. For example, section 34A, which allows for appeals against awards, has no parallel in the Model Law.

International arbitration in Australia is regulated under the International Arbitration Act 1974 (Cth). Under section 16 of that Act, the Model Law has the force of law in Australia.

24 Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

Under the Arbitration Acts, an arbitration agreement must exist in writ-ing. However, a broad understanding of ‘writing’ is taken to include: electronic communications; any record of the agreement irrespective of whether it was concluded orally; or the exchange of statements of claim and defence in which the existence of an agreement is alleged by one party and not denied by the other.

25 Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, 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?

If the parties fail to make an agreement, the number of arbitrators will be one (noting also the difference with the Model Law, which provides for three). In such a situation, the court makes the appointment at the request of a party, having due regard to the qualifications required of




the arbitrator and to such considerations as are likely to secure the appointment of an independent and impartial arbitrator.

An arbitrator can be challenged only if circumstances exist that give rise to justifiable doubts as to impartiality or independence, or if the arbitrator does not possess the qualifications agreed to by the parties. A justifiable doubt is one where there exists a real danger of bias.

Further, a party is restricted to challenging an arbitrator that they appointed only for reasons which it becomes aware of after the appoint-ment was made, and must do so within 15 days. As is typical, the tri-bunal itself decides the challenge, however, if rejected, a party may request the court to also make a determination.

26 Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

The parties are, as always, free to select whichever arbitrators they feel are best placed to resolve their dispute. The reality, however, is that the arbitrators of choice for major commercial arbitrations are often retired judges of superior courts.

Courts in Australia tend to adopt a pro-arbitration stance, and hence judges are often attuned to the differences between arbitration and litigation.

27 Arbitral procedure

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

The parties are free to agree on the procedure to be followed by the arbi-tral tribunal in conducting the proceedings. Of course, this is subject to the overriding duty imposed to treat the parties equally, and provide them with a reasonable opportunity to present their case.

28 Court intervention

On what grounds can the court intervene during an arbitration?

The court has a limited power of intervention. This may include a role in respect of appeals and deciding challenges to arbitrator appointments as well as the court having power to play an assistive role, such as in taking evidence or in enforcing interim measures granted by a tribunal. These powers cannot be overruled by the parties’ agreement.

29 Interim relief

Do arbitrators have powers to grant interim relief ?

Yes, unless otherwise agreed between the parties. This power to grant interim measures allows the tribunal to make orders requiring a party to take action that would prevent current or imminent harm or preju-dice to the arbitral process itself, or to preserve evidence that may be relevant and material to the resolution of the dispute. With limitation, this may include the ability to order relief such as security of costs, dis-covery of documents, and inspection of property. As a precondition to granting this relief, however, the tribunal must be satisfied that:• harm not adequately reparable by an award of damages is likely to

result if the measure is not ordered;• that harm substantially outweighs the harm that is likely to result

to the party against whom the measure is directed if the measure is granted, and

• there is a reasonable possibility that the requesting party will suc-ceed on the merits of the claim.

An interim measure granted by a tribunal can be enforced, upon the application of a party, by the court.

30 Award

When and in what form must the award be delivered?

Domestic arbitration law imposes no time limits on the delivery of an award.

The parties can, however, agree to this, and many arbitral institu-tions also contain such limits.

31 Appeal

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

An appeal from an award can be made on a question of law only if the parties agree that an appeal can be brought, and the court grants leave. The court, however, must not grant leave unless the following four con-ditions are satisfied:• the determination of the question will substantially affect the rights

of a party;• the question is one which the tribunal was asked to determine; • the decision of the tribunal is either obviously wrong, or is of gen-

eral public importance and the decision is at least open to serious doubt; and

• that despite the arbitration agreement of the parties, it is just and proper for the court to determine the question.

An appeal must be brought within three months.After an appeal is heard by the court, a party can bring a further

appeal as against that court’s judgment. Importantly, however, this is no longer an appeal against the award itself, but rather an appeal against the lower court’s judgment.

32 Enforcement

What procedures exist for enforcement of foreign and domestic awards?

With regards to domestic awards, an arbitral award is to be recognised as binding and, upon application to the court, can be enforce. The only exception to this is if the opposing party can convince the court that it should not recognise or enforce the award on the grounds found in sec-tion 36 (which mirror the grounds found in the Model Law and the New York Convention).

With regards to foreign awards, section 8 of the International Arbitration Act has the same effect as that described above for domestic awards. The courts do not have discretion to determine whether to rec-ognise and enforce the award, but must do so unless one of the limited grounds provided are satisfied. This reflects the pro-arbitration stance of Australian arbitration law.

33 Costs

Can a successful party recover its costs?

The costs of an arbitration are at the discretion of the tribunal, which may make whatever orders it sees fit in this regard. In practice, many arbitral rules provide guidance on the considerations that the tribunal should have in mind when making such orders.

Alternative dispute resolution

34 Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

Alternative dispute resolution mechanisms, including arbitration and mediation, are increasingly popular in commercial matters in Australia. Indeed, some of the Australian courts are now directing parties to use specific alternative dispute resolution mechanisms to attempt to resolve or narrow issues in dispute. In addition, there are a number of tribunals in each jurisdiction that have been established to deal with disputes in a specific area and provide affordable alternative dispute resolution mechanisms.

35 Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

There has been an increasing focus by the judiciary on the costs of liti-gation, which in turn has promoted a greater use of alternative dispute resolution in Australia. In the Federal Court of Australia, the parties to a dispute are required to file a ‘genuine steps statement’, which outlines the steps taken to constitute a sincere and genuine attempt to resolve the dispute.




In the commercial list of the Supreme Court of New South Wales, it is common for the court to order that the parties mediate before the matter is set down for hearing.

Many contractual agreements now contain alternative dispute res-olution clauses that require the parties to attempt to resolve the dispute in a specific way, prior to the commencement of proceedings.

In Australia, the court may order that the proceedings be stayed until such time as the process referred to in the dispute resolution clause is completed.

Miscellaneous

36 Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

No.

Colin Loveday [email protected] Alexandra Rose [email protected]

Level 151 Bligh StreetSydney NSW 2000Australia

Tel: +61 2 9353 4000Fax: +61 2 8220 6700www.claytonutz.com


AUSTRIA Vavrovsky Heine Marth Rechtsanwälte GmbH


AustriaPhilipp Strasser and Dieter HeineVavrovsky Heine Marth Rechtsanwälte GmbH

Litigation

1 Court system


The civil court system in Austria provides for proceedings in three instances. In general, first instance proceedings are conducted before district courts. District courts have jurisdiction for general civil law matters where the amount in dispute is below €15,000. Moreover, district courts handle disputes concerning family law, alimony, tres-pass, rental and lease matters, even if the amount in dispute exceeds €15,000.

Regional courts have jurisdiction in the first instance for all gen-eral civil law matters that do not fall within the responsibility of the district courts, in particular those with an amount in dispute exceed-ing €15,000. Moreover, regional courts, inter alia, have jurisdiction for matters such as labour law and public liability disputes, as well as cer-tain commercial disputes.

Appeals from district courts are heard before regional courts. If a regional court was acting as first instance, appeals against its decision are heard by one of the higher regional courts. In cases that require a decision on legal issues of fundamental importance, a further appeal may be made to the Supreme Court as third and final instance.

The courts have specialised departments for commercial and labour law matters, both at the district and regional level. In Vienna, there are stand-alone specialised commercial courts at the dis-trict and regional level as well as a specialised labour and social law court. Currently, the Austrian judiciary comprises 116 district courts, 20 regional courts, four higher regional courts and the Supreme Court.

Proceedings are either decided by a single judge or a tribunal. All proceedings in district courts and most proceedings before regional courts are held before a single judge. In first instance, proceedings will only be decided by a senate of three judges upon the request of a party and in case the amount in dispute exceeds €100,000. Tribunals in commercial matters comprise two professional judges and one lay judge and tribunals in labour law matters comprise one professional and two lay judges.

2 Judges and juries

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

As in most civil law jurisdictions, Austrian judges take on an inquisi-torial role in civil proceedings, thus summoning and examining wit-nesses, requesting documents and appointing experts. Hence, it is for the judge to ensure that the relevant facts are examined and estab-lished. Only after the judge has taken all testimony considered relevant for rendering a decision are the parties given the opportunity to put fur-ther questions to the witnesses.

There are no juries in civil proceedings. In labour law proceedings, the tribunal is composed of two lay judges and one professional judge; one lay judge being an employee’s representative and one an employ-er’s representative. Similarly, in commercial disputes, the tribunal is composed of one lay judge from a business profession and two profes-sional judges.

Professional judges are Austrian civil servants, whose independ-ence is guaranteed by the Constitution. In order to become a profes-sional judge, law graduates have to gain practical experience as judge

candidates for approximately five years. Moves to promote diversity on the bench have been fairly successful and as of 2017, more than 50 per cent of professional judges are women (in comparison with 43 per cent in 2006). However, the percentage of women in leading positions in the Austrian judiciary is still a mere 35 per cent.

3 Limitation issues

What are the time limits for bringing civil claims?

Austrian law provides for a limitation period of 30 years except where special provisions provide otherwise. A shorter limitation period of three years applies to most civil law claims, such as claims for damages, claims for specific performance and claims for the delivery of goods.

In general, the limitation period will commence when the right could first have been exercised. For instance, claims for damages will become time-barred three years after the injured party becomes aware of the injuring party and the damage. Statutes of limitations cannot be waived in advance. But, statutes of limitations are not observed ex offi-cio and thus need to be argued in court.

4 Pre-action behaviour

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

Austrian law does not stipulate any obligatory pre-action procedures. It is customary to request a debtor to fulfil its obligations before com-mencing legal proceedings, for example by having one’s attorney send a letter to the debtor. However, such request is not a prerequisite for commencing proceedings.

If a party fears the frustration of its rights before proceedings will be concluded, it may request a court to issue a preliminary injunction for securing monetary or other claims as well as to secure a right or legal relationship.

There is no pre-action disclosure under Austrian law. In any event, a party intending to bring a claim should ascertain it has the evidence necessary to prove its claims, since requests for evidence production during the proceedings are rather limited (especially in comparison to document production possibilities in common law jurisdictions).

5 Starting proceedings

How are civil proceedings commenced? How and when are the parties to the proceedings notified of their commencement? Do the courts have the capacity to handle their caseload?

Proceedings are commenced by the submission of a statement of claim to a court. The statement of claim needs to contain the following:• the name and address of the court to which it is submitted;• the names and addresses of the parties and their representatives;• the matter and amount in dispute;• the relief sought and the facts on which the relief sought is

based; and• the number of exhibits submitted with the statement of claim.

A statement of claim must be signed. It does not need to contain any legal reasoning. Similarly, there is no requirement to present evidence


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at this stage. However, both might be helpful if the claim is of a com-plex nature. In any event, it should be argued why the respective court has jurisdiction to hear the case.

When filing a statement of claim a court fee has to be paid. The amount of the fee depends on the amount in dispute. If the formal and procedural requirements are fulfilled and the court fee has been paid, the court will transmit the statement of claim to the respondent. Otherwise, the court will reject the claim or order the party to correct its submission.

Austrian courts have sufficient capacity to deal with the caseload and decisions are usually made within a reasonable time.

6 Timetable

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

In proceedings before district courts, after forwarding the statement of claim to the respondent, the court will fix a date for a preparatory hearing. Although not required to submit a statement of defence, the respondent may submit such statement.

In proceedings before regional courts, the respondent will be ordered to file a statement of defence within four weeks. After receiv-ing the written submission, the court will schedule a preparatory hear-ing. If a party fails to file a statement of defence where required to do so or fails to attend a scheduled hearing, the other party may request the court to issue a default judgment.

The court may render a judgment (and thereby close the pro-ceedings) after the preparatory hearing. However, usually several evidentiary hearings are scheduled to take the evidence necessary for rendering a judgment. The taking of evidence may, inter alia, include witness and expert examination, object inspections and presentation of documents. The parties can introduce new facts and evidence until the oral proceedings in the first instance are formally closed.

After concluding the evidentiary hearing, the court evaluates the submitted evidence and closes the oral hearing, thereby also ending the parties’ right to file new written submissions. Subsequently, the court will render its judgment.

7 Case management

Can the parties control the procedure and the timetable?

It is for the court to set out the procedure and the timetable of the pro-ceedings. However, a party can apply for the extension of time limits or the postponement of fixed dates such as oral hearings. If the par-ties agree, proceedings can also be suspended for a minimum of three months.

8 Evidence – documents

Is there a duty to preserve documents and other evidence pending trial? Must parties share relevant documents (including those unhelpful to their case)?

In general, there is no duty to preserve documents and other evidence, although certain laws and regulations stipulate the preservation of doc-uments. For example, entrepreneurs are obliged to preserve records for a minimum of seven years, including correspondence and accounting records. If a lawsuit is already pending, it is within the court’s compe-tence to preserve evidence. Thus, as a matter of precaution, a court may order that evidence shall be taken in case it would otherwise be lost.

There is also no general duty to share documents that are unhelpful to a party’s own case. However, any documents shared with the court must also be presented to all other parties of the proceedings.

9 Evidence – privilege

Are any documents privileged? Would advice from an in-house lawyer (whether local or foreign) also be privileged?

It has to be borne in mind that there is no discovery under Austrian law. However, a party may request the court to order its opponent to present a specific document to the court. The opposing party may refuse the production of the document on a number of grounds, such as protect-ing business secrets or risking exposure to criminal prosecution.

Austrian attorneys are under an obligation of professional secrecy. Nevertheless, contrary to the common-law concept of privilege, correspondence between a lawyer and a client is not protected by attorney-client privilege. Similarly, internal communication with in house-lawyers is not protected. This might be of particular relevance with regard to raids at the client’s premises. However, in accordance with ECJ case law, privilege protecting the communication between attorney and client exists in the context of European competition law.

10 Evidence – pretrial

Do parties exchange written evidence from witnesses and experts prior to trial?

It is not permitted to submit written witness statements in court. Rather, witnesses shall provide oral testimony before the court. Although expert witnesses should generally also provide oral testi-mony, it is permitted and customary to submit written expert reports.

11 Evidence – trial

How is evidence presented at trial? Do witnesses and experts give oral evidence?

Documentary evidence is usually introduced to the proceedings as a copy, which is submitted both to the court and the opposing party. As mentioned in question 11, both witnesses and experts shall appear before the court and provide oral testimony. First, the judge will exam-ine the witnesses and experts. Subsequently, the parties may put further questions to the witnesses. The court may also conduct inspec-tions and hear oral testimony from the parties.

12 Interim remedies

What interim remedies are available?

Interim remedies may be granted by the courts to protect the enforce-ability of a claim or to protect a party from irreparable harm. The Austrian Enforcement Act distinguishes three types of interim meas-ures: interim measures to secure a monetary claim, interim measures to secure a claim for specific performance and interim measures to secure a right or a legal relationship. To secure a monetary claim, the following means are available:• order for the deposit of money or custody or administration of

moveable assets;• prohibition on selling or pledging moveable property; • prohibition directed towards a third party;• order putting immoveable property under administration; and• prohibition on transfering or charging immoveable property.

With regard to interim measures securing claims for specific perfor-mance or rights, other means such as establishing a right of retention or ordering the debtor to refrain from any action adversely affecting the claim, right or object are available.

To grant interim remedies in support of foreign proceedings, the foreign judgment to be rendered needs to be enforceable under Austrian law. Similarly, interim remedies ordered by a foreign court or arbitral tribunal may be enforced if they comply with Austrian law.

13 Remedies

What substantive remedies are available?

Substantive remedies may take the form of judgments ordering perfor-mance, declaratory judgments and constitutive judgments. Judgments ordering (specific) performance are most common and include cease-and-desist orders. Declaratory judgments are considered sub-sidiary to judgments ordering performance since an application for a declaratory judgment is inadmissible if a claim for performance can also be filed. Constitutive judgments alter a legal relationship. Punitive damages are not available under Austrian law.

Interest in the amount of 4 per cent is payable on money judg-ments. In the event both parties are entrepreneurs, a substantially higher interest rate will apply. The rate depends on the base interest rate published by the Austrian National Bank and is set at 9.08 per cent at the time of writing.




14 Enforcement

What means of enforcement are available?

The means of enforcement will depend on the title to be enforced and the type of assets the enforcement is directed at. Enforcements will be undertaken by a bailiff. Typical means for the enforcement of judgments are the seizure of moveable and immoveable property, the attachment and transfer of receivables, as well as judicial auction. Executory titles directed at specific performance may be enforced by eviction, substitute performance or the issuance of penalties.

15 Public access

Are court hearings held in public? Are court documents available to the public?

In principle, court hearings are held in public. However, in certain cases the public may be excluded from the hearing (eg, to safeguard public morals or official secrecy). Court documents are not available to the public.

16 Costs

Does the court have power to order costs?

The court renders its decision on costs together with the decision on the merits. In general, Austrian law provides that the winning party has to reimburse the losing party for all costs. If neither party fully suc-ceeds, only partial reimbursement will be ordered. Costs to be reim-bursed include legal and court fees as well as certain expenses. Legal fees are calculated in accordance with the official lawyer’s tariff, which might be lower than the fees individually agreed upon between attor-ney and client.

17 Funding arrangements

Are ‘no win, no fee’ agreements, or other types of contingency or conditional fee arrangements between lawyers and their clients, available to parties? May parties bring proceedings using third-party funding? If so, may the third party take a share of any proceeds of the claim? May a party to litigation share its risk with a third party?

Contingency and conditional fee arrangements (pacte de quota litis) are prohibited under Austrian law. However, other arrangements such as lump-sum bonus agreements may be agreed upon between lawyers and their clients.

Third-party funding is common and has been explicitly approved by the Austrian Supreme Court in 2013. There are, however, no specific provisions under Austrian law dealing with third-party funding. Thus, no restrictions exist as to the arrangement between funder and litigant. Similarly, there are no disclosure obligations for litigants or funders.

18 Insurance

Is insurance available to cover all or part of a party’s legal costs?

Legal costs insurance is available and relatively common. Depending on the individual insurance policy, insurance may cover all of a party’s costs and its potential liability for the opponent’s costs. After-the-event litigation insurance is not a common occurrence in Austria.

Parties may also seek legal aid in the event they lack sufficient funds for bringing or defending a claim. However, especially with regard to funding a claim, Austrian courts tend to be restrictive and will only confirm legal aid if the claim has a sufficient chance of success.

19 Class action

May litigants with similar claims bring a form of collective redress? In what circumstances is this permitted?

Strictly speaking, Austrian law does not provide for class actions. There is, however, a form of group litigation referred to as the ‘Austrian model of class action’, which allows multiple claimants to assign their claims to an association. Typically, these will either be the Consumer Information Association or the Chamber of Employees. This type of class action has been successful in the past, in particular with regard to

cases against banks for charging excessive interest rates on loans and unsuitable investment advice.

Against the background of consumer-related scandals such as the VW emission fraud, the Austrian Ministry of Justice has recently set up a working group on class actions considering reforms to the current sys-tem of collective redress.

20 Appeal

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

Reasons for appealing against a judgment of a court of first instance include nullity (serious procedural errors), procedural irregularities, the wrong establishment of facts or an incorrect legal assessment.

A party may file an appeal within four weeks after the original judgment has been served. The opposing party may file a reply to the appeal. Although the court of appeal may order an oral hearing, in prac-tice oral hearings on appeals rarely occur. In deciding on the appeal, the court of appeal may either:• dismiss the appeal;• accept the appeal and amend the original decision; • set aside the judgment and retry the case itself; or• set aside the judgment and refer the case back to the court of first

instance for a retrial.

A decision of the court of appeal may be appealed against before the Austrian Supreme Court. However, such appeal may only be filed in very limited circumstances. First, the Supreme Court only admits appeals as to the legal reasoning of a judgment. Moreover, an appeal to the Supreme Court either needs to concern a substantial question of law the Supreme Court has not yet decided upon or there must be a departure from the Supreme Court’s existing case law by the court of appeal. Decisions of the Supreme Court are final and binding.

21 Foreign judgments

What procedures exist for recognition and enforcement of foreign judgments?

Foreign judgments may be enforced in accordance with bilateral and multilateral treaties. To be considered enforceable, foreign judgments first require a formal declaration of enforceability (exequatur). A decla-ration will be granted if the foreign judicial act is enforceable according to the laws of the foreign state, and reciprocity is guaranteed. If no recip-rocal agreement exists, Austrian courts will not grant enforcement.

A judgment rendered in another member state of the EU will be enforced in Austria under the Brussels regime (EU Regulation No. 1215/2012) and does not require separate recognition. Judgments ren-dered in Switzerland, Norway and Iceland will be recognised without requiring any special procedure in accordance with the revised Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters of 2007.

22 Foreign proceedings

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

In the European Union, procedures for obtaining evidence from for-eign countries have been considerably facilitated by the introduction of the Evidence Regulation (EC Regulation No. 1206/2001). According to the Regulation, judicial assistance requests are transmitted directly between the courts. The regulation applies to both oral as well as documentary evidence. Outside of a European context, the Hague Convention on Civil Procedure of 1954 and other bilateral treaties might apply.

Arbitration

23 UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

The Austrian arbitration law is set out in sections 577 to 618 of the Code of Civil Procedure. In 2006, the law underwent a major reform, which predominantly based the Austrian arbitration regime on the Model Law.


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Although closely following the structure of the Model Law, a few important distinctions can be found. First and foremost, Austrian arbi-tration law does not distinguish between national and international arbitrations or between commercial and non-commercial arbitrations, but provides a uniform arbitration law for any type of arbitral proceed-ing. It also includes additional provisions regarding consumer and labour law-related matters as well as a separate provision on arbitra-bility. Similarly, there is a distinct provision on the allocation of costs which cannot be found in the original text of the Model Law. What is more, according to Austrian arbitration law procedural errors only lead to the setting-aside of the arbitral award if Austrian procedural public policy has been violated.

24 Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The formal requirements for validly concluding an arbitration agree-ment resemble those stipulated in the Model Law. In accordance with section 583 of the Code of Civil Procedure, an arbitration agreement must be in writing (ie, in a written document signed by both parties or in letters, faxes, emails or other forms of communication that prove the existence of the agreement).

Aside from the writing requirement, in order to be enforceable, an arbitration agreement must also fulfil certain substantive require-ments, such as identifying the parties and clearly expressing their intention to specifically submit a dispute to arbitration.

25 Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, 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?

If the parties have not agreed on a specific number of arbitrators, Austrian arbitration law provides for a tribunal of three arbitrators as a default rule. In this case, each party shall appoint one arbitrator and the two party-appointed arbitrators shall jointly appoint the third arbi-trator, who will act as chair of the arbitral tribunal. If a party fails to appoint an arbitrator or the parties fail to reach an agreement on a sole arbitrator, the appointment will be made by the courts.

In general, arbitrators can be challenged if there are justifiable doubts as to their impartiality or independence, or if they do not fulfil the requirements set out by the parties’ agreement. Party-appointed arbitrators can only be challenged by their appointing party for reasons that become known to the appointing party after the appointment has been made.

26 Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

Austrian arbitration law does not impose any default requirements as to the characteristics of an arbitrator. However, the parties are free to agree upon requirements the arbitrators have to fulfil (eg, certain pro-fessional qualifications or background).

27 Arbitral procedure

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

The parties can agree on the arbitral procedure and the arbitral tribunal must follow the rules agreed upon by the parties. Failing such agree-ment, the arbitral tribunal can proceed in any manner it considers appropriate. Being the seat of the Vienna International Arbitral Centre (VIAC), many cross-border arbitrations seated in Austria provide for institutional arbitration under the VIAC Rules.

However, there are a number of mandatory rules that always have to be complied with, such as the parties’ right to be heard, the inde-pendence and impartiality of the arbitral tribunal or the requirement that the arbitral award has to be in writing.

28 Court intervention

On what grounds can the court intervene during an arbitration?

Under Austrian arbitration law, the courts only have very limited pow-ers to intervene during an arbitration and may only do so on a party’s or the tribunal’s request. In particular, a party may request a court:• to appoint an arbitrator if the parties cannot agree or a party fails to

do so;• to grant an interim or protective measure;• to decide the challenge of an arbitrator; or• to intervene if an arbitrator’s mandate has been terminated and

the arbitrator does not resign or the other party does not agree to the termination.

Also, the arbitral tribunal itself can request judicial assistance from a court:• to enforce an interim or protective measure; or• to gather evidence for which the arbitral tribunal has no authority

(eg, to apply coercive measures).

Of the above grounds, the following are mandatory: the competence of courts to issue interim measures upon a party’s request, a party’s right to challenge an arbitrator before a court, and judicial assistance by courts. All other powers can be overridden by agreement.

29 Interim relief

Do arbitrators have powers to grant interim relief ?

As a general rule, arbitrators may order any interim relief they deem appropriate. Interim relief can be requested from both the courts and the arbitral tribunal. As a prerequisite, the relief needs to be granted in respect of the subject matter of the dispute and, without granting the relief, the enforcement of the claim would be frustrated or consider-ably impeded, or a risk of irreparable harm would arise.

30 Award

When and in what form must the award be delivered?

The award must be delivered in writing, signed by the arbitrators and state the date on which it was rendered. The award must state the rea-sons on which it is based, unless the parties have agreed otherwise. Austrian law does not provide for a time limit for delivering an award. However, the parties may agree on a time limit either by explicitly pro-viding for a time limit in the arbitration agreement or by referring to institutional rules.

31 Appeal

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

The grounds for challenging an award are set out in section 611(2) of the Code of Civil Procedure. The grounds closely follow those provided by article V of the New York Convention and article 34 of the Model Law. The list is exhaustive and there is no right to a further appeal. Since

Update and trends

Since 2014, proceedings to set aside arbitral awards fall within the exclusive jurisdiction of the Austrian Supreme Court as the first and final instance, thus providing a one-stop-shop principle for arbitral proceedings. In addition, the Supreme Court also exclu-sively decides on the existence or non-existence of an arbitral award and has jurisdiction over judicial measures accompanying arbitral proceedings, such as the appointment of substitute arbi-trators. As can already be witnessed, these amendments further strengthened Austria’s position as the arbitration hub in central and eastern Europe.

In the wake of the upcoming enactment of the recast of the European Regulation on insolvency proceedings (EU Regulation 2015/848) in July 2017, a number of accompanying laws are cur-rently under consideration. These will, inter alia, include an expansion of the competencies of judicial officers with regard to insolvency proceedings.




2013, the Austrian Supreme Court acts as the only instance in proceed-ings for challenging an award. The grounds are as follows:• the invalidity of an arbitration agreement or a lack thereof;• a party’s incapacity to conclude an arbitration agreement;• a violation of the right to be heard;• the subject matter is beyond the scope of the arbitration agreement;• a failure in the constitution or composition of the tribunal;• the proceedings violate Austrian public policy;• the requirements for an action for revision have been fulfilled (see

Code of Civil Procedure, section 530);• the matter in dispute is not arbitrable; and• the award violates Austrian public policy.

32 Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Domestic awards are enforced in the same way as other domestic titles in accordance with the Austrian Enforcement Act. Enforcement requests fall within the jurisdiction of the district court where the obliged is domiciled or the district court where the enforcement will be undertaken.

Foreign arbitral awards are enforced by Austrian courts pursuant to the New York Convention and other multilateral treaties. Foreign awards must first be declared enforceable (recognised) by the courts. A request for recognising the award can be combined with a request for enforcement and the courts will decide simultaneously on both requests. After being declared enforceable the foreign award is treated as if it were a domestic award.

33 Costs

Can a successful party recover its costs?

Pursuant to section 609 of the Code of Civil Procedure, the arbitral tribunal shall decide upon the obligation to reimburse the costs of the proceedings, provided the parties have not agreed otherwise. The arbi-tral tribunal shall take into account the circumstances of the case, in particular the outcome of the proceedings. The decision has to be made in the form of an arbitral award.

Austrian arbitration law does not define the types of costs a party can recover, but merely notes that the obligation to reimburse may include any and all reasonable costs appropriate for bringing the action or defence.

Alternative dispute resolution

34 Types of ADR

What types of ADR process are commonly used? Is a particular ADR process popular?

Although there is a refined legal framework for ADR procedures under Austrian law, resolving disputes by means of ADR has not yet gained significant approval by the Austrian business community. Hence, mediation, although popular, is mainly used in family and labour law disputes.

The Austrian Mediation Act has established a mediation council with the Austrian Ministry of Justice, which specifies vocational pro-grammes for mediators and sets out the requirements for becoming a certified mediator.

In 2016, VIAC presented the new Vienna Mediation Rules, which provide a procedural framework for ADR by defining procedural standards not only for mediation proceedings but ADR proceedings in general. The rules also cater to parties wishing to combine ADR pro-ceedings (eg, ‘med-arb’) or an early neutral evaluation before the com-mencement of arbitral proceedings.

Furthermore, the Austrian courts have launched pilot projects in which judges are supposed to propose the initiation of mediation pro-ceedings prior to commencing litigation, if deemed appropriate.

35 Requirements for ADR

Is there a requirement for the parties to litigation or arbitration to consider ADR before or during proceedings? Can the court or tribunal compel the parties to participate in an ADR process?

There is no general requirement under Austrian law to consider ADR before commencing arbitration or litigation. Only with regard to cer-tain tenancy disputes shall specific conciliation panels have exclu-sive jurisdiction.

Miscellaneous

36 Are there any particularly interesting features of the dispute resolution system not addressed in any of the previous questions?

In general, Austria is gaining importance as a hub for international arbitration. This is owed to its modern arbitration law, its geographic location and the work of VIAC. Similarly, Austrian state courts provide reliable and comparatively fast proceedings. The quality of decisions is usually high and specialised commercial panels and courts ensure that adjudicators understand complex commercial issues.

Philipp Strasser [email protected] Dieter Heine [email protected]

Fleischmarkt 11010 ViennaAustriaTel: +43 1 512 03 53Fax: +43 1 512 03 53 40

www.vhm-law.at

Mozartplatz 45020 SalzburgAustriaTel: +43 662 84 95 16Fax: +43 662 84 95 16 25


Liedekerke Wolters Waelbroeck Kirkpatrick BELGIUM


BelgiumHakim Boularbah, Olivier van der Haegen and Charlotte Van ThemscheLiedekerke Wolters Waelbroeck Kirkpatrick

Litigation

1 Court system


The Belgian civil court system is modelled after the French (Napoleonic) three-tier system, in which a judgment handed down by the lower court may be appealed to a higher court with respect both to questions of law and to questions of fact, and the higher court’s decision is subject to limited review by the Supreme Court.

This diagram does not include the criminal, labour and administra-tive courts or the constitutional court.

Justices of the peaceThere are 187 justices of the peace in Belgium.

As a rule, the justice of the peace has subject matter jurisdiction on all disputes where the amount of the claim is not in excess of €2,500, with the exception of a few disputes that are expressly reserved by law to other courts.

In addition, the justice of the peace has special subject matter juris-diction, regardless of the amount of the claim, on disputes regarding certain matters, such as disputes with regard to leases, certain family disputes and certain consumer credits.

Courts of first instanceThere are 13 courts of first instance in Belgium.

A court of first instance has general jurisdiction on all disputes where the value of the claim is in excess of €2,500. There are a few exceptions to the general subject matter jurisdiction of a court of first instance; some matters are expressly reserved by law to other courts.

In addition, a court of first instance has exclusive jurisdiction on a number of matters, including but not limited to:• claims for an authorisation to enforce (domestic and foreign) arbi-

tral awards, as well as foreign judgments (except in insolvency matters);

• claims regarding personal status (nationality, paternity and mater-nity suits, etc);

• claims regarding expropriations for public purposes; and• claims regarding the application of tax laws.

Claims regarding attachments, garnishment orders, etc, are han-dled by a specific chamber within a court of first instance: the ‘court of attachments’.

Finally, a court of first instance has appellate jurisdiction with respect to judgments handed down by the justices of the peace estab-lished in the court’s district, provided the value of the claim is in excess of €1,860.

Since 1 January 2016 (entry into force of the main provisions of the law of 19 October 2015 reforming certain features of the Belgian civil procedure), cases before a court of first instance are handled by cham-bers composed of one judge. Chambers may exceptionally be com-posed of three judges if the complexity or interest of the case as well as specific circumstances so require. Some courts of first instance or com-merce (for example, in Brussels or Antwerp) usually set up chambers that specialise in specific matters (construction, contracts, property, bankruptcy, etc).

Three-judge chambers remain the norm before the labour courts and courts of commerce in which two lay judges sit with a profes-sional judge.

Courts of commerceThere are nine courts of commerce in Belgium.

Under the Belgian Judicial Code, as recently amended, a court of commerce has jurisdiction on all disputes between enterprises (irre-spective of the value of the claim), being any person or legal entity pursuing an economic objective on a lasting basis, provided the dis-pute concerns an act that was carried out in the pursuit of this objec-tive, but except when the dispute belongs to the exclusive jurisdiction of other courts.

In addition, a court of commerce has special or exclusive jurisdic-tion on a wide variety of disputes, including but not limited to disputes regarding corporations (including disputes between shareholders), claims involving insolvency proceedings, and claims in relation to inland and sea shipping.

A court of commerce also has exclusive jurisdiction on all disputes between enterprises regarding intellectual property – namely, patents, trademarks and designs, etc. There are a few exceptions to these rules.

Cases before a court of commerce are handled by chambers com-posed of three judges: one professional judge and two lay judges (usu-ally entrepreneurs or bank employees that spend one or two days each month sitting as judges).

Courts of appealThere are five courts of appeal in Belgium, one each in Brussels, Antwerp, Ghent, Liège and Mons.

All judgments handed down by a court of first instance or a court of commerce can be appealed before a court of appeal, provided the value of the c