VII. Setting Aside an Award

Judicial control is confined to a minimum when it comes to challenging an arbitral award before the Austrian courts. These narrow grounds are set out in Section 611 Austrian Code of Civil Procedure (ACCP) and only apply to awards rendered in proceedings having their seat of arbitration in Austria. The Austrian Supreme Court is the court of first and final instance – except in consumer and labour law arbitrations – in which to challenge an arbitral award (see infra VII.3).

1. Structure of Section 611 ACCP

Section 611 ACCP comprises an exhaustive list of grounds for setting aside an arbitral award. An important distinction is made between those grounds which are only considered upon application by a party – Section 611 para 2, nos 1 to 6 ACCP – and those to be considered ex officio by the state court – Section 611 para 2 nos 7 and 8 ACCP. The parties cannot waive in advance their right to challenge the arbitral award or waive any grounds enumerated in Section 611 ACCP.

2. Specific Grounds

Due to the following grounds, each party may challenge an arbitral award rendered in Austria:

  • A valid arbitration agreementdoes not exist, or the arbitral tribunal denies its jurisdiction despite the existence of a valid arbitration agreement, or a party was not capable of concluding a valid arbitration agreement under the law, which was personally relevant to that party;

  • A party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or for another reason was unable to adequately defend itself or challenge the claims of the opposing party;

  • The award deals with a dispute not falling within the terms of the arbitration agreement, or contains decisions on mattersbeyond the scope of the arbitrationagreement or beyond the claims of the parties; however, if the defect concerns only a separable part of the award, then only that part of the award shall be set aside;

  • The constitution or composition of the arbitral tribunal is not in accordance with a provision of Section 611 ACCP or with an admissible agreement of the parties;

  • The arbitral procedure was not carried out in accordance with the basic elements of the Austrian legal system (procedural ordre public);

  • The requirements have been met, according to which a judgment of a court can beappealedunder Section 530 para 1 nos 1 to 5ACCP via an application for revision;

  • The subject matter of the dispute is not arbitrable under Austrian law; and

  • The award is in conflict with basic elements of the Austrian legal system (material ordre public).

An arbitral award may not be challenged before the Austrian courts on any other grounds (see infra VII.3). The setting aside of an award has no impact on the effectiveness of the underlying arbitration agreement. If, however, an award on the same subject matter has already been set aside twice in a final and binding manner, and if a further, third award on the same subject matter is to be set aside for a third time, then the court, upon the application of a party, shall declare the arbitration agreement invalid with respect to that subject matter.

Where an award has been set aside, its legal existence no longer subsists – it no longer has the effect of a final and binding court judgment between the parties and is no longer enforceable.

3. The Austrian Supreme Court as Competent Authority

On 1 January 2014, a government bill introducing changes to the Austrian Arbitration law came into force. In particular, the Austrian Supreme Court is now both the first and last instance to decide on the annulment of an arbitral award brought before the state courts on or after 1 January 2014. Instead of the previous regime of three procedural levels (court of first instance, court of appeal, Supreme Court), the decision on annulment of an arbitral award is now made by just one judicial instance: the Austrian Supreme Court. The former provisions had been considered as a major disadvantage for promoting Austria as place of arbitration. However, the system of three procedural levels remains in force for awards in consumer and labour law disputes.

Within the Austrian Supreme Court, a separate arbitration senate (known as the “Senate 18”) has been constituted. It deals solely with setting aside proceedings.