Arbitration in Austria: An Overview
Introduction
Arbitration in Austria offers commercial parties a flexible, confidential, and efficient alternative to traditional court proceedings. Austria’s central location in Europe, robust legal framework, and reputation for neutrality make it an attractive seat for both domestic and international arbitration. This article provides an overview of the legal landscape, key features, and practical considerations for arbitration in Austria.
Legal Framework
Arbitration in Austria, a civil law jurisdiction, is primarily governed by the Austrian Code of Civil Procedure (Zivilprozessordnung, "ZPO"). These provisions regulate the admissibility and conduct of arbitration proceedings and are largely modelled on the UNCITRAL Model Law on International Commercial Arbitration. Notably, Austrian arbitration law does not distinguish between domestic and international arbitration proceedings, ensuring a consistent approach regardless of the parties’ nationalities.
Most provisions of ZPO are non-mandatory and apply only if the parties have not agreed otherwise (for example, on the selection of arbitrators or procedural rules). However, certain procedural guarantees cannot be contracted out of. These include the principle of equality of the parties, the right to be heard, and the right to legal representation.
The Vienna International Arbitral Centre ("VIAC") is the leading arbitral institution in Austria, administering both national and international commercial disputes. VIAC offers its own Rules of Arbitration (available in German and English), but parties may also choose other institutional rules, such as those of the International Chamber of Commerce ("ICC").
Key Features of Arbitration in Austria
Austrian arbitration law allows parties significant autonomy to tailor proceedings to their needs. This includes the choice of arbitrators, language, applicable law, and procedural rules. Parties can also agree on the scope of document disclosure and the use of expert evidence.
Arbitration proceedings in Austria are private and sensitive information disclosed during the process remains confidential. This is a significant advantage over public court proceedings for many commercial parties.
The general principle is that the claimant must prove the facts on which its claim is based. However, Austrian law provides for certain exceptions, such as shifting the burden of proof to the respondent in cases of proven contractual breach. Austrian law also recognises prima facie evidence in specific circumstances.
Austrian arbitral tribunals typically take a cautious approach to document production. Parties are generally only required to produce documents in their possession that are relevant and material to the dispute. Extensive disclosure is rare and usually only ordered in special circumstances. Attorney-client privilege is respected; ZPO explicitly recognises an exception to the obligation to produce documents for parties who are entitled to refuse to testify, which includes documents that are protected under attorney-client privilege.
There is no obligation for witnesses to testify, but witness evidence can play a central role. Written witness statements are common, and oral testimony at hearings takes precedence over written statements. Documentary evidence is generally given more weight, especially after a long period of time since the underlying events took place has passed. Parties may also present expert evidence, and arbitral tribunals have the power to appoint their own experts if necessary.
Enforcement and Appeals
Austria is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, having ratified it in 1961. This ensures that arbitral awards issued in Austria are enforceable both domestically and internationally. A domestic arbitral award has the same effect as a final and binding judgment of an Austrian court and no separate authorisation for enforcement is required from an Austrian state court.
Arbitral proceedings in Austria are generally single-staged with no possibility of appeal on the merits. However, a party may apply to the Austrian Supreme Court to set aside an award on limited grounds, such as if the subject matter is not arbitrable under Austrian law or if enforcement would violate Austrian public policy. The setting-aside procedure is not considered an 'appeal' as the court does not re-evaluate the merits of the case. Arbitration awards issued in investor/state arbitrations under the ICSID rules are not subject to these procedures. However, certain limitations may apply if the award results from an ICSID arbitration in which the investor is from a members state of the EU and the respondent is an EU member state.
Conclusion
Austria offers a sophisticated and arbitration-friendly legal environment, supported by modern legislation, experienced institutions, and a tradition of neutrality. The flexibility, confidentiality, and enforceability of arbitral awards make Austria an attractive seat for both domestic and international disputes.
