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27 September 2018
In most continental jurisdictions, an arbitral award resolving a commercial dispute is expected to be final and binding, implementing a valid agreement between the parties involved (which have chosen this flexible process). One of the key drivers for contracting parties to enter into an arbitral agreement is the efficiency of arbitration proceedings compared to the time and formalities required before the ordinary courts. However, the advantages of arbitral proceedings, including speed, may be compromised when an arbitral award is challenged.
In Greece, the resolution of commercial disputes by arbitration is generally accepted, irrespective of whether it is widely followed in practice.(1) The Civil Procedure Code devotes a chapter(2) to regulating so-called 'domestic arbitration', while L 2735/1999 (adopting the United Nations Commission on International Trade Law Model Law) regulates international commercial arbitration carried out in Greece. Foreign arbitral awards are respected without discrimination by the Greek legal system and are recognised and executed according to Articles 903 and 905 of the Civil Procedure Code without prejudice to the requirements of bilateral or international treaties to which Greece is a party – the most important of which is the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.
In the case of domestic arbitration governed by the Civil Procedure Code, arbitral awards may be nullified under Article 897 or recognised as invalid under Article 901.(3) However, in the case of international arbitration carried out in Greece, awards may be challenged within the framework stipulated in Article 34 of L 2735/1999. An arbitral award may be nullified only by virtue of a decision by the competent court of appeals issued following an annulment request. An annulment request must be filed within three months of the arbitral award being notified(4) (Article 899§2 al (a) of the Civil Procedure Code). That said, an annulment request can be filed on the same day that the arbitral award is issued and before notification thereof.(5) Annulment requests seek to annul arbitral awards and procedurally fall under the proceedings applicable to property disputes under Article 614 of the Civil Procedure Code. The judicial control of annulment requests is limited to the grounds exclusively set out by Article 897 (1-8) of the Civil Procedure Code.(6)
Foreign arbitral awards are not challenged per se before the Greek courts, but only indirectly in the process of their recognition and enforcement, in the limited instances set out by Article 5 of the New York Convention, which is essentially repeated in Article 903 of the Civil Procedure Code. It is unnecessary for a foreign arbitral award to have already been rendered enforceable in its place of issuance,(7) but the arbitral award must not be subject to annulment proceedings before the courts of the place of origin of the award (the venue of the proceedings),(8) in line with Article 5§1e of the New York Convention.(9) Article 903(5) of the Civil Procedure Code also sets out that a foreign award must not be contrary to a final decision by a Greek court constituting res judicata on the same matter under the Civil Procedure Code,(10) the New York Convention(11) or an applicable Greek law, being the law of the place where the award is to be rendered enforceable.
In all of the aforementioned cases, the limited scope of a challenge to an arbitral award does not allow the re-evaluation of the merits of the case. Rather, it pertains to the compliance control of arbitral awards in relation to the formal and legal requirements concerning:
The last of these requirements is the most difficult issue to assess, despite the fact that Greek jurisprudence largely adheres to a narrow interpretation regarding the contradiction of a foreign award to public policy , as such is understood under the concept of international public policy.
The relatively recent jurisprudence(14) developed under Article 33 of the Civil Procedure Code(15) has concluded that the notion of public policy under Article 33 of the Civil Procedure Code must also be applied in the case of domestic arbitral awards,(16) instead of applying the notion of public policy set out under Article 3 of the Civil Procedure Code, whereby the application of jus cogens rules may not be excluded by agreement of the parties, as was accepted by several earlier court decisions.(17) Following this development in jurisprudence, foreign and domestic arbitral awards will be treated equally, and ordinary judges will be deprived of the possibility of re-evaluating the merits of a dispute.(18)
If an arbitral award is challenged, it may take a further two years following the issuance of the award for the case to be finally settled by the courts. The recent changes to the Civil Procedure Code aimed at accelerating judicial proceedings have not yet shown considerable progress. In any case, the Greek courts are reluctant to set aside arbitral awards or refuse their enforcement, thus indicating that recourse to arbitration for local and international cases is a valuable instrument in alternative dispute resolution, especially in international trade and investment disputes, even if an award which is sought to be executed in Greece, is eventually subject to final review by the Greek ordinary courts.
For further information on this topic please contact Sorina Papadopoulou at Cocalis & Psarras Law Firm by telephone (+30 210 361 3661) or email (firstname.lastname@example.org). The Cocalis & Psarras Law Firm website can be accessed at www.cocalispsarras.gr.
(1) The benefits of arbitration in several private law disputes are also acknowledged from various professional chambers, such as the Commercial and Industrial Chamber of Athens or the Technical Chamber of Athens, which have their own rules of arbitration in parallel with the Civil Procedure Code.
(4) The notification does not necessarily require official service through a bailiff; it includes delivery of the award to the counsels by the arbitrator (see Article 893§2 of Civil Procedure Code; Athens Court of Appeals 5819/2014 ΔΕΕ 2015.57) or by the secretary of institutional arbitrations like the International Chamber of Commerce.
(6) For example, see decisions Supreme Court 543/2017 (annulment recourse for invalidity of the arbitration clause for being fictitious), Supreme Court 98/2016 (annulment recourse for exceeding the arbitration clause).
(12) Emphasis is given to the fundamental principle for the right to have a fair trial before an unbiased and independent judge, as stipulated by Article 6§1 of the European Conventions for the Human Rights and article 20§1 of the Greek Constitution.
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