Introduction
The relevant provisions pertaining to the recognition and declaration of enforceability, as well as the enforcement of an arbitral award, are contained in the Austrian Code of Civil Procedure (CCP), which is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration (1985) and the Austrian Enforcement Act (EA), as well as the relevant international treaties, including inter alia the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (New York Convention). Therefore, international arbitration practitioners will find a familiar legal environment in Austria.
Part I: what can be enforced?
1. What counts as an arbitral “award” that can be enforced?
All arbitral awards that are final and binding are generally enforceable under Austrian law. This includes partial awards (disposing of part of the main claim), final awards, additional awards, and awards granting specific performance.
The core principles that define an arbitral award are that the award shall be in writing in the language of the proceedings and be signed by the arbitrators. Further, the award must be dated with the date of its issuance and specify the place of arbitration. Finally, the award must be reasoned, unless the parties have agreed otherwise.
2. Formal requirements that an award needs to conform with to be enforceable
Austrian law distinguishes between domestic (with the seat of arbitration in Austria) and foreign (with the seat of arbitration outside Austria) arbitral awards.
Domestic arbitral awards are, by law, deemed to have the same effect as a final court judgment. Based thereon and pursuant to EA s1(16), domestic arbitral awards constitute an enforceable title under Austrian law.
Foreign arbitral awards must first be formally recognised and declared enforceable (generally referred to as exequatur) by an Austrian court to constitute an enforceable title under Austrian law. Once this step is completed, the foreign arbitral award will enjoy the same treatment as a domestic award.
3. Orders on interim measures: enforceability
Only the courts have the power to enforce preliminary or interim measures, irrespective of whether they have been granted in court or arbitration proceedings.
Interim measures issued by an arbitral tribunal are dealt with under CCP s593. This provision applies irrespective of the seat of arbitration and provides that interim measures issued by an arbitral tribunal are enforceable under Austrian law, subject to the conditions that the other party has been heard (ie, the interim measure was not rendered ex parte), the interim measure is issued in writing and is undersigned by the sole arbitrator or the president of the arbitral tribunal, and there are no reasons to deny such enforcement.
The list of grounds to deny enforcement of an interim measure is limited and the competent district court may only refuse enforcement if:
- Regarding domestic awards: the seat of arbitration is in Austria and the interim measure suffers from a defect that constitutes a ground for setting aside an arbitral award under Austrian law.
- Regarding foreign awards: the seat of arbitration is not in Austria and the measure suffers from a defect that would constitute grounds for refusal to recognise and declare enforceable a foreign arbitral award in Austria.
- Regarding both domestic and foreign awards: the enforcement of the interim measure would be incompatible with a previous domestic or previously recognised foreign court measure; or the means of protection is unknown under Austrian law and no appropriate means as provided by Austrian law were requested.
Note that whilst the parties may by agreement exclude the arbitral tribunal’s power to grant preliminary or interim relief, the courts–provided they have jurisdiction–can always be called on to grant preliminary or interim relief on the application of a party both before and after constitution of the arbitral tribunal.
4. Emergency awards: enforceability
Awards rendered by an emergency arbitrator are considered equivalent to interim measures ordered by an arbitral tribunal and are dealt with as outlined under question I(3) above.
Part II: resisting enforcement
5 a. How are awards set aside?
Under Austrian law, the setting aside of an award requires a written application to the Austrian Supreme Court stating the grounds relied on and accompanied by a copy of the arbitration agreement and the award. In technical terms, the filing must be done via the official court electronic filing system and representation by a lawyer admitted to practise in Austria is obligatory. The official language before Austrian courts is German. Therefore, arbitral awards in another language have to be submitted together with a German translation. Upon filing, the court fees, which are calculated based on the amount in dispute, become due.
If the formal and material requirements, including whether the application was filed within the statutory time limit, are prima facie met, the application will be served on the other party which can submit a written reply within four weeks. The written exchange is followed by an oral hearing after which the decision will be rendered. The Austrian Supreme Court is the first and last instance for applications to set aside an award. There is no possibility to appeal the decision.
b. Can enforcement be resisted if the respondent has not formally applied to set aside the award?
Yes, the EA allows for objections to be raised regarding the decision on recognition and enforceability (in the case of a foreign award) as well as the actual decision to grant enforcement.
c. Can non-parties seek annulment?
Under Austrian law, the right to seek annulment of an award is limited to the parties of the arbitration.
d. Grounds to seek setting aside
The grounds for setting aside an award are exhaustively listed in CCP s611(2) as follows:
- A valid arbitration agreement does not exist, or the arbitral tribunal has denied its jurisdiction despite the existence of a valid arbitration agreement, or a party was under an incapacity to conclude a valid arbitration agreement under the law governing its personal status.
- A party was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was unable to present its case for other reasons.
- The award deals with a dispute not covered by the arbitration agreement or contains decisions on matters beyond the scope of the arbitration agreement or the plea of the parties for legal protection.
- The composition or constitution of the arbitral tribunal was not in accordance with the Austrian law or the agreement of the parties.
- The arbitral proceedings were conducted in a manner that conflicts with the fundamental values of the Austrian legal system (procedural ordre public).
- The requirements according to which a court judgment is subject to an action for revision (ie, if the award was based on a fraudulent action or forged document) are met.
- The subject matter of the dispute is not arbitrable under Austrian law.
- The arbitral award conflicts with the fundamental values of the Austrian legal system (substantive ordre public).
It is firmly established in the case law of the Austrian Supreme Court that an application to set aside an award shall not entail any révision au fond of the merits of the case. This principle is strictly applied, and the Austrian Supreme Court has consistently refused to entertain a review of the merits of the award.
e. Timelines to seek setting aside
An application for a domestic award to be set aside must be filed within three months of the arbitral award being served on the party filing the application.
f. Grounds to resist enforcement
It is necessary to distinguish between (a) resisting recognition and declaration of enforceability of a foreign award and (b) resisting actual enforcement. In both cases, the grounds are limited.
Regarding recognition and declaration of enforceability of foreign awards, the grounds will in most cases correspond to the reasons listed in Article V of the New York Convention.
Regarding actual enforcement proceedings, the decision is generally granted in ex parte proceedings with the possibility for the debtor to appeal. Such an appeal does not automatically entail a stay, but it is possible to request a stay of enforcement measures with the appeal which will be duly considered. In addition, there are three actions that lead to the stay of enforcement proceedings:
- Opposition on substantive grounds (EA s35): if the debtor asserts circumstances that occurred after the rendering of the award that annul the substantive claim or at least lead to postponement of enforcement (eg, performance).
- Opposition on formal grounds (EA s36): if the debtor asserts circumstances according to which the prerequisites for enforcement are not yet given (eg, the performance period has not lapsed).
- Third-party opposition (EA s37): if, in fact, the object against which enforcement measures are directed does not belong to the debtor, the entitled third party can–by showing its entitlement–obtain a declaration of inadmissibility of the enforcement measure (which is then repealed).
In all these cases, an award debtor opposing enforcement bears the burden of proof for the grounds it relies on.
g. Which court to go to for setting aside?
The Austrian Supreme Court decides as first and last instance on applications for the setting aside of an award.
h. Formal requirements before court can grant setting aside
Other than the prerequisites outlined in question II(5)(a) above, there are no formal requirements before an award can be set aside.
i. Do courts grant stay on enforcement as an interim measure?
Courts will generally not stay enforcement other than for the reasons outlined in question II(5)(f). The decision on whether to grant a stay will be considered by the court that ordered enforcement. Should the debtor be able to show that enforcement would lead to irreversible harm while, eg, setting-aside proceedings are pending, this will be duly considered by the court and a stay of enforcement may be granted.
j. What is the appellate mechanism against the decision of the court of first instance?
Regarding both an application for recognition and declaration of enforceability, as well as the application for actual enforcement, the competent courts are the district courts (Bezirksgericht) at which the award debtor has its seat, domicile, or habitual residence, or at the place in which the enforcement measure shall be implemented. An appeal can be raised to the higher regional courts (Landesgericht). Only in exceptional cases may a further appeal be raised before the Austrian Supreme Court (Oberster Gerichtshof).
Part III: enforcing foreign awards
6. New York Convention applicability
Relevant for foreign awards, Austria has ratified the New York Convention without reservation (after withdrawing the reciprocity reservation in 1988). The convention entered into force in Austria on 31 July 1961.
7. Timelines for enforcement
Provided that all relevant documents have been submitted, the rendering of the ex parte decision may take no more than two to four weeks. However, in complex cases, it may take longer. Very often, a relevant factor affecting the duration of proceedings is the service of the decision on the award debtor (which may take time regarding a foreign debtor outside the European Union).
As in all court proceedings, the duration also depends on the conduct of the debtor, who may file appeals and request a stay of proceedings, etc. Should the decision be appealed, the proceedings will, on average, take between four and ten months, and possibly longer in complex cases. In the event of a recourse to the Austrian Supreme Court, a further six months may be expected until a decision is rendered.
8. Which court to go to? Relation with location of assets?
The competent courts are the district courts at which the award debtor has its seat, domicile, or habitual residence, or at the place at which the enforcement measure shall be implemented, ie, the location of assets or the seat of a third-party debtor.
9. Can non-parties resist enforcement?
Non-parties can resist enforcement if they are either third-party debtors or the true owners of assets that have mistakenly been attributed to the award debtor and therefore mistakenly drawn into the enforcement proceedings.
10. Compelling disclosure of local assets? How to identify assets available for enforcement?
Austrian law does not require the debtor to specify assets that shall be the target of the enforcement. However, identifying specific assets may be necessary to establish jurisdiction in the first place.
Prior to enforcement, there are several public registers that may prove useful in identifying the assets of another party. The most relevant are the Land Register (Grundbuch), the Company Register (Firmenbuch), the Tradespersons Register (Gewerberegister), the Insolvency Register (Ediktsdatei), and the Trademark and Patent Register (Marken- und Patentregister). In addition, award creditors who can show that they have (i) a claim against the award debtor and (ii) legitimate doubts as to the award debtor’s creditworthiness may instruct a lawyer or notary to access the Enforcement Register (Exekutionsregister), which contains court data regarding enforcement proceedings conducted against the debtor. The information includes the number of pending enforcement proceedings (including the owed amounts) for the past two years, whether enforcement measures regarding movable assets have been successful, and whether the debtor was ordered to provide a list of all assets (Vermögensverzeichnis) in the past year.
Once enforcement proceedings are pending, orders compelling the award debtor to disclose assets are available if initial enforcement fails.
11. Are third-party funded awards enforceable?
This issue is not explicitly addressed under Austrian law. In principle, third-party funding is generally considered permissible under Austrian law and is widely practised. Consequently, there should be no reason not to enforce a third-party funded award. However, it should be noted that the courts might be hesitant to enforce amounts awarded that go beyond the regular reimbursement of costs to a party, eg, additional amounts awarded to cover the cost of third-party funding itself.
12. What interim reliefs are available pending enforcement of awards? Which of those reliefs are granted ex parte?
The system of enforcement under Austrian law distinguishes two separate steps: (1) granting enforcement and (2) actual enforcement. The first step is generally granted ex parte. Once enforcement is granted and this order is served on the respective debtor, the asset is already seized to the benefit of the award creditor. Effectively, this is equivalent to interim relief. The realisation of assets is then undertaken in the second step of actual enforcement.
13. Formal requirements for enforcement application: what documents need to be filed in court?
An application for enforcement requires a written application to the competent district court (see question III(8)) accompanied by the declaration of recognition and enforceability of the foreign award. In the alternative, the award creditor may apply for recognition and declaration of enforceability together with the application for enforcement.
In technical terms, the filing must be done via the official court electronic filing system and by means of a standardised form. The official language before Austrian courts is German. Accordingly, any documents in another language that support the application must be submitted together with a German translation. Upon filing, the court fees, which are calculated based on the amount to be enforced, become due.
14. Enforcing awards that have been annulled/set aside at other courts. Enforcing when an annulment application is pending at a foreign court
Austrian courts generally do not enforce awards that have been set aside.
Regarding foreign awards, this holds true under the regime of the New York Convention. However, in accordance with Article IX of the European Convention on International Commercial Arbitration (1961) (European Convention), Austrian courts have recognised and enforced set-aside awards.
If setting-aside proceedings regarding a foreign or domestic award are still pending, this may be a reason to stay enforcement. If the court continues enforcement, it may make this conditional on the award creditor posting security.
15. Once application for enforcement is allowed, how does the actual enforcement against assets work? What are the remedies available for tracing assets during enforcement proceedings including for assets disposed of by fraud?
The actual enforcement is conducted by officers of the court. There is no private enforcement. The award creditor may either identify specific assets or–provided that the amount to be enforced exceeds €10,000 (cUS$11,000)–may request the appointment of an enforcement administrator by the court. The enforcement administrator is, inter alia, tasked with identifying assets. The law obliges the award debtor to provide the enforcement administrator with all documents and information required for the enforcement proceedings as well as imposing on the award debtor a duty to cooperate in the removal of any restrictions that limit or prevent the use of any property seized, in accordance with its intended purpose. Should the award debtor persistently and without sufficient cause fail to comply, the enforcement court may order that the award debtor be taken into custody.
Actions that undermine enforcement, such as, eg, fraud, the dissipation of assets, or the violation of a court seal, are punishable under criminal law.
16. What is the procedure for repatriation of sums awarded after obtaining an order for enforcement?
The distribution of the amounts realised in enforcement is handled by the courts. In most cases, the payment is made to the lawyer representing the award creditor. The lawyer then undertakes the steps to transfer the sums to the client.
17. Do courts grant orders for security for costs?
It is on the award creditor to advance the costs for enforcement proceedings. Upon review, the enforcement court will determine the costs and allow them to be recovered as part of the enforcement proceedings.
18. Exchange control regulations: do they affect payments to foreign award holders?
Payments to foreign award holders may be subject to general money laundering controls and may also be restricted in case of state-imposed sanctions.
19. Enforcing awards from non-New York Convention places
In addition to the New York Convention, Austria has ratified the Convention on the Execution of Foreign Arbitral Awards (1927) (Geneva Convention), the European Convention, the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States (1966) (ICSID Convention), and a number of bilateral investment treaties.
In general, reciprocity is a prerequisite to enforce foreign titles in Austria.
20. Enforcing against sovereigns
In principle, Austrian law allows for enforcement against sovereign states under the usual restrictions applicable under public international law, in particular the exclusion of assets which are protected by sovereign immunity, ie, assets that serve acta iure imperii.
21. Appellate mechanism available?
Regarding both an application for recognition and declaration of enforceability as well as the application for actual enforcement, the competent courts are the district courts (Bezirksgericht) at which the award debtor has its seat, domicile, or habitual residence, or at the place at which the enforcement measure shall be implemented. An appeal can be raised to the higher regional courts (Landesgericht). Only in exceptional cases may a further appeal be raised before the Austrian Supreme Court (Oberster Gerichtshof).
Part IV: enforcing domestic awards
Once a foreign award has been recognised and declared enforceable, it enjoys the same treatment and is subject to the same rules as a domestic award. Therefore, the answers to the questions raised under Part IV are identical to the answers provided to the questions raised under Part III 7–8, 10–15, 17 and 21 above.
