What legislation applies to arbitration in your country? Are there any mandatory laws?
The Austrian arbitration law is set out in sections 577 to 618 of the Austrian Code of Civil Procedure (‘ACCP’). Austrian arbitration law contains optional as well as mandatory provisions, the latter of which mainly concern the most essential aspects of arbitration, such as certain provisions on the conduct of the proceedings (e.g. right to be heard, arbitrator’s impartiality and liability as well as the relation between domestic courts and arbitral tribunals).
Consequently, around these procedural pillars the parties are free to agree on the rules of procedure. In the absence of an agreement of the parties, arbitrators may conduct the proceedings in a way they deem appropriate.
Since Decree No. 2011-48 of 13 January 2011, the main provisions applicable to arbitration in France are set out in Book IV of the Code of Civil Procedure (CCP) (Articles 1442 to 1527). A few provisions on arbitrability issues can also be found in the French Civil Code (Articles 2059 to 2061). The decisions of the Court of Cassation and of the Paris Court of Appeal are also very important in interpreting the codes and specifying their content because, although there is no doctrine of precedent as such under French law, lower courts generally rely on decisions of higher courts.
French law makes a clear distinction between domestic and international arbitration, although some provisions of the CCP apply to both. Arbitration is deemed “international” when international trade interests are at stake (Article 1504, CCP). This criterion is economic rather than legal and therefore means that the following are irrelevant to determining whether the arbitration is international:
• The nationality of the parties.
• The law applicable to the merits or to the procedure.
• The location of the seat.
What matters is that the underlying economic transaction operates a transfer of goods, services or funds across national borders (Paris Court of Appeal, 5 Apr 1990, 1992 Rev Arb 110).
Some of the provisions applicable to domestic arbitration are also applicable to international arbitration (Article 1506, CCP). However, the French legislature has developed two separate regimes, with a number of more liberal principles applicable only to international arbitration.
Only a few mandatory legislative provisions are applicable to arbitration in France, which is very favourable to party autonomy.
Certain provisions guaranteeing the fairness of the arbitration proceedings cannot be derogated from by the parties or disregarded by the arbitral tribunal. More specifically, the tribunal must always ensure that the principles of equal treatment of the parties and due process are respected (Article 1510, CCP). In addition, arbitrators cannot base their decision on facts or legal rules that were not debated by the parties (Court of Cassation, First Civil Chamber, 29 June 2011, No. 10-23.321).
Moreover, an arbitration award must not violate French international public policy. Such violations can lead to the award being set aside. In this regard, the French courts had ruled that the enforcement of an arbitration award can be denied only if giving effect to the award would result in a "flagrant, effective and concrete" violation of international public policy (Paris Court of Appeal, 18 Nov 2004, No. 2002/19606, Thalès; Court of Cassation, First Civil Chamber, 4 June 2008, No. 06-15.320, Cytec). However, certain commentators have criticised this somewhat minimalist approach, advocating a less deferential review. Recent decisions by the Paris Court of Appeal have referred only to an “effective and concrete” violation, suggesting that the French courts may become more willing to carry out a deeper review of the underlying award (Paris Court of Appeal, 4 March 2014, No. 12/17681, Gulf Leaders; 14 October 2014, No. 13/03410, Commisimpex). However, it remains to be seen whether this standard will be limited to cases where allegations of corruption are made and whether the Court of Cassation will approve it.
Portugal adopted the Arbitration Act (Law No. 63/2011, 14 December, which entered into force in March 2012), applicable to voluntary arbitration procedures, containing mandatory as well as non-mandatory rules.
The former Arbitration Law (Law No. 31/86, 29 August) was silent on a number of issues, such as interim measures, multiparty arbitrations and challenge of arbitrators. Scholarship and jurisprudence had resolved these issues in line with international standards but there were still some difficult topics that were not addressed with consistency.
With the adoption of the Arbitration Act the main problems were resolved and Portuguese law now explicitly follows international standards.
The main body of law governing arbitration is included in the new Code of Civil Procedure which came into force on February 15 2013. Book IV of the Code of Civil Procedure (“On Arbitration”) regulates national arbitration and also represents the general set of provisions applicable to international arbitration whenever the parties have not agreed on certain aspects in the arbitration agreement and have not vested the arbitral tribunal with settling those aspects either, while Title IV of Book VII sets out specific legal provisions regarding international arbitration and the effects of foreign arbitral awards.
The arbitration law includes mostly non-mandatory provisions, as a reflection of the principle provided for in the Code of Civil Procedure that parties are free to organise arbitral proceedings as they deem fit. However, parties’ freedom is subject to observing public policy, a couple of mandatory provisions and ethics. For instance, in ad hoc arbitration organised by the parties themselves, they are free to agree rules regarding the constitution of the arbitral tribunal, removal of arbitrators, the timing and seat of the arbitration, the procedural rules to be applied by the arbitral tribunal (including potential preliminary proceedings), the allocation of costs and any other rules that may govern the arbitration, subject to public policy, mandatory provisions of law and ethics. There are a few mandatory rules, for instance certain validity requirements of the arbitration agreement, regarding the written form of the arbitration agreement or the authenticated form of the arbitration agreement in arbitrations regarding the transfer of the ownership right over an immovable asset. The law also imposes certain fundamental principles related to a fair trial from which no derogation is permitted (e.g., the parties shall be ensured equal treatment, the right to defence and a reasonable opportunity to present their case).
The Swedish Arbitration Act of 1999 governs both domestic and international arbitration, as well as the enforcement of arbitral awards. However, there is a new draft of the Arbitration Act which most likely will enter into force during 2017.
In Switzerland, international arbitration is governed by the 12th chapter of the Swiss Private International Law Act (PILA). An arbitration is deemed international, if at least one party to the arbitration agreement had its domicile or habitual residence outside Switzerland at the time of the conclusion of the arbitration agreement. Domestic arbitration is governed by the 3rd title of the Swiss Civil Procedure Code (CPC). However, parties to an international arbitration dispute may declare the provisions on domestic arbitration of the CPC to apply in lieu of the provisions of the PILA (art. 167 para 2 PILA). Equally, the parties to a domestic arbitration are granted the possibility to agree on the provisions of the PILA to apply instead of the CPC (art. 353 para 2 CPC).
While great emphasis is placed on party autonomy in adapting the arbitral proceedings to their needs, Swiss arbitration law contains several mandatory requirements: the provisions on arbitrability (art. 177 PILA and art. 353 CPC), the provisions stipulating the lack of independence or impartiality as grounds to challenge an arbitrator (art. 180 para 1 (c) PILA and art. 367 para 1 (c) CPC), the provisions requiring the arbitral tribunal to ensure equal treatment of the parties and compliance with their right to be heard (art. 182 para 3 PILA and art. 373 para 4 CPC), as well as the provisions providing for assistance by the state courts at the seat of the arbitral tribunal (art. 185 PILA and art. 356 CPC) are among the mandatory rules.
There are three distinct arbitral regimes: (1) the Dubai International Financial Centre (DIFC), an offshore financial free zone established in 2004; (2) the Abu Dhabi Global Market (ADGM), another offshore financial free zone; and (3) the remainder of the UAE’s seven Emirates, sometimes referred to as ‘onshore’ UAE, which is treated as one jurisdiction for the purposes of arbitration.
The applicable arbitration law in the UAE (outside of the DIFC and ADGM) is found in Articles 203 to 218 of the Federal Civil Procedure Code No 11/1992 (CPC). Other provisions of the CPC may also be relevant to arbitral proceedings (eg, Articles 235 to 238 in relation to the enforcement of foreign judgments and Articles 239 to 243 regarding execution procedures).
Certain provisions of the arbitration chapter of the CPC contain mandatory rules that cannot be derogated from, even with the mutual consent of the parties. These include the requirement to reduce an arbitration agreement to writing, the capacity of the parties to arbitrate, the arbitrability of certain types of disputes, the requirement that the tribunal consist of an uneven number of arbitrators, the independence and impartiality of arbitrators, due process, the inadmissibility of fact or witness testimony unless given under the specific oath set forth in the Federal Law of Evidence, the formalities for rendering awards, and the grounds for the setting aside of arbitral awards.
As an autonomous jurisdiction, the DIFC has its own Arbitration Law No 1 of 2008 (the DIFC Arbitration Law) which is modelled on the UNCITRAL Model Law. Mandatory provisions of the DIFC Arbitration Law relate to due process guarantees such as the equal treatment of the parties, providing sufficient notice of hearings in advance, and communicating all pleadings and documents to all parties to the dispute.
In 2015 the ADGM “Arbitration Regulations” were promulgated by the ADGM Board of Directors (the ADGM Arbitration Regulations). The ADGM Arbitration Regulations apply to any ADGM-seated arbitrations, domestic and international, or where the parties select them to govern the procedure of the arbitration. The ADGM Arbitration Regulations are modelled on the UNCITRAL Model Law but also draw from the English Arbitration Act 1996. They include certain mandatory requirements that aim to ensure procedural fairness in conducting arbitrations, including that the parties must be treated equally, given sufficient advance notice of any hearings, and equally receive all submissions and documents provided in the proceedings.
The Arbitration Act 1996 (the Act) governs all forms of arbitration in New Zealand. Schedule 1 is mandatory, applying to all arbitrations seated in New Zealand, whether international or domestic, while Schedule 2 is optional.
Schedule 1 follows the UNCITRAL Model Law closely, including the 2006 amendments. See, for example, articles 18 (equality of treatment), 24(2) (advanced notice of meetings and hearings) and 24(3) (right to be notified) of Schedule 1 and generally Methanex Motunui Ltd v Spellman  3 NZLR 454 (CA).
Schedule 2 incorporates additional procedural rules, such as the right to appeal to the High Court on a question of law (clause (5)). That Schedule applies to domestic arbitrations unless the parties agree otherwise, but to international arbitrations only if the parties agree.
An arbitration is international if: (a) the parties have their places of business in different states; (b) the place of the arbitration, the place where a substantial part of the obligations are to be performed, or the place with which the subject matter is most closely connected is outside the state where the parties have their places of business; or (c) the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country (article 1(3) of Schedule 1).
The principal legislation governing arbitrations in Malaysia is the Arbitration Act 2005 (“AA”), which regulates both international and domestic arbitrations. Unlike its predecessor, the AA draws a distinction between international and domestic arbitrations as it segmentalises the application of its constituent Parts depending on the nature of the arbitration.
The AA comprises four Parts. Part I addresses preliminary arbitration issues, such as arbitrability, and defines key terms of the instrument. Part II deals with the arbitration itself, encompassing, inter alia, the validity of arbitration agreements, the conduct of arbitral proceedings, and the enforcement of the award. Part IV contains miscellaneous provisions, such as the liability of arbitrators and arbitral institutions and the bankruptcy of arbitral parties.
Part III governs various additional matters:
- Consolidation of proceedings and concurrent hearings.
- Concurrent determination of preliminary points of law by the High Court and the arbitral tribunal.
- References to the High Court on questions of law arising out of an arbitral award.
- Appeals against the decision of the High Court on an above reference made to it.
- Costs and expenses of the arbitration.
- Extension of time for commencing arbitral proceedings.
- Extension of time for the rendering of an arbitral award.
Parts I, II, and IV apply mandatorily to both domestic and international arbitrations. In domestic arbitrations, Part III applies on an opt-out basis, i.e. parties may agree to exclude its application. By contrast, Part III only applies in an international arbitration where parties so agree.
It is worth noting that the AA replaces the Arbitration Act 1952. Any Malaysian court proceeding relating to an arbitration will be governed by the AA despite that court action accruing from an arbitral proceeding predating the AA (section 51, AA).
The United States is a jurisdiction that strongly supports arbitration, and its laws reflect an “emphatic federal policy in favor of arbitral dispute resolution.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 631 (1985).
Because the United States is a federal system, arbitration law is governed both by federal statutes enacted by the U.S. Congress and by state laws enacted by the fifty state legislatures. The primary federal statute governing arbitration is the Federal Arbitration Act (FAA). Provisions on arbitration are also found in the Patent Act and the Foreign Sovereign Immunities Act, among others. The United States is a common-law system, so mandatory arbitration law also derives from court decisions interpreting the governing statutes.
Chapter 1 of the FAA governs domestic arbitrations, while Chapters 2 and 3 implement the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and the Inter-American Convention on International Commercial Arbitration (Panama Convention). The U.S. Supreme Court has held that section 2 of the FAA, which provides for the validity, irrevocability, and enforceability of arbitration agreements, is substantive federal law that applies in state courts and supplants inconsistent state laws with respect to all transactions affecting interstate commerce. See Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995). As a result, virtually any commercial transaction in the United States and certainly any international transaction falls within the purview of federal law, and state law will rarely, if ever, govern. State laws are usually relevant only where the FAA is silent and only to the extent that the state statutes are not inconsistent with it.
The key legislation in Singapore is the International Arbitration Act (IAA) and the Arbitration Act (AA).
The IAA is modelled on the UNCITRAL Model Law. It applies to international arbitrations seated in Singapore. It also applies to ‘an arbitration which is not an international arbitration’ if the parties agree in writing that the IAA will apply.
The IAA does not expressly prescribe provisions from which the parties cannot derogate.
The AA applies to domestic arbitrations held in Singapore. Parties to an international arbitration seated in Singapore may, however, agree that the AA will apply.
The principal difference between the two statutes is that the AA provides for heightened court supervision of domestic arbitrations.
The law that regulates arbitration in Brazil is Law nº 9.307/1996, which was recently amended by Law nº 13.129/2015 to extend the scope of the arbitration and rule on the choice of the arbitrators when the parties resort to arbitration body, interruption of prescription by the arbitration, the granting of provisional and urgency guardianships in cases of arbitration, the arbitration letter and the award, and revoke some articles of Law nº 9,307/96. In addition, the Code of Civil Procedure is applied secondarily to arbitration, when there is no provision on the subject in the Arbitration Law. All these laws are mandatory.
Each jurisdiction in Canada has enacted legislation regarding international and domestic arbitrations. The international arbitration statutes are:
- Alberta – International Commercial Arbitration Act, RSA 2000, c 1-5;
- British Columbia – International Commercial Arbitration Act, RSBC 1996, c 233;
- Federal – Commercial Arbitration Act, RSC 1985, c 17 (2nd Supp);
- Manitoba – International Commercial Arbitration Act, CCSM, c C-151;
- New Brunswick – International Commercial Arbitration Act, SNB 1986, c I-12.2;
- Newfoundland & Labrador – International Commercial Arbitration Act, RSN 1990, c I-15;
- Northwest Territories – International Commercial Arbitration Act, RSNWT 1988, c I-6;
- Nova Scotia – International Commercial Arbitration Act, RSNS 1989, c 234;
- Nunavut – International Commercial Arbitration Act, RSNWT (Nu) 1988 c I-6, duplicated under Nunavut Act, SC 1993 c 28, s 29;
- Ontario – International Commercial Arbitration Act, RSO 1990, c I-9;
- Saskatchewan – International Commercial Arbitration Act, SS 1988-1989, c I-10.2;
- Prince Edward Island – International Commercial Arbitration Act, RSPEI 1988, c I-5;
- Quebec – Code of Civil Procedure, RSQ, c C-25 (as am), arts 940-952; Quebec Civil Code, SQ 1991, c 64 (as am), arts 2638-2643, 3121, 3133, 3148 3168; and
- Yukon Territories – International Commercial Arbitration Act, RSY 2002, c 123.
Regarding mandatory laws, the UNCITRAL Model Law (the “Model Law”), which is incorporated in Canadian arbitration law, requires that rules of natural justice must be satisfied and contains other mandatory provisions. In addition, some legislation expressly displaces the authority of pre-dispute arbitration agreements, such as consumer protection laws. Other mandatory laws may exist, depending on the jurisdiction.
Law No. 131 of December 31, 2013 (the “Panama Arbitration Law”), published in Official Gazette 27449–C of January 8, 2014, is the legislation that governs international and domestic arbitration in Panama and it contains mandatory provisions.
Moreover, the Panamanian Code on International Private Law, which is Law No. 61 of October 7, 2015, published in Official Gazette 27449–C of January 8, 2014, also includes a chapter on the recognition and enforcement of international arbitral awards.
In Spain applies the Law 60/2003, of 20 December, on Arbitration ("Arbitration Law").
Domestic arbitration in Turkey is governed by the Code of Civil Procedure No. 6100, which entered into force in 2011. Code of Civil Procedure is applied to the disputes which have no foreign element; and the place of arbitration is agreed as Turkey. Besides, the International Arbitration Law no. 4686, which entered into force in 2001 is applied to the international arbitrations in Turkey which includes foreign elements and the place of arbitration is Turkey. Furthermore, the Law no. 4686 is applied to the disputes which the parties or arbitrator/arbitral tribunal agree on the application of this law to their dispute.
German law recognizes arbitration as a dispute resolution tool that is equal to litigation before a state court. Therefore, Germany is arbitrationfriendly with a modern and efficient arbitration law. Parties will find it easy to have arbitration proceedings in Germany and/or to enforce a (domestic or international) arbitral award with the assistance of German courts.
The main provisions applicable to arbitration in Germany are listed in the Tenth Book of the German Code of Civil Procedure (Zivilprozessordnung, “ZPO”) in sections 1025 to 1066. They apply to ad hoc arbitration as well as to institutional arbitration proceedings. The Tenth Book came into force on 1 January 1998 and to the largest extent follows the UNCITRAL Model Law.
The Tenth Book is applicable to all arbitration proceedings with their seat in Germany (section 1025 (1) ZPO). Some provisions of the Tenth Book even apply if the seat of arbitration is located outside of Germany or if the seat has not yet been determined (sections 1025 (2), (3) ZPO), e.g. if German state courts are required to assist arbitral tribunals or when it comes to the enforcement of arbitral awards in Germany.
In addition to the provisions of the Tenth Book, the parties are free to agree on their own set of rules that shall apply to the arbitration proceedings by way of an individual agreement or by reference to the rules of an arbitral institution. The parties’ chosen rules take precedence over the Tenth Book and are binding also to the arbitral tribunal. The party autonomy is limited only as far as such agreements must not conflict with provisions of mandatory law (e.g. the parties’ agreement must not violate anti trust laws). It is also mandatory that the Parties must be treated equally and every party must have the full opportunity to present its case (section 1042 (1) ZPO). The parties are not entitled to waive these rights in advance.
The Italian Civil Procedural Code, Articles 806 – 840, governs arbitration proceedings in Italy. The last significant amendment to these arbitration rules was approved on 2 February 2006 by Legislative Decree No. 40, which – among other things – clarified the procedure for the appointment of arbitrators in multi-party proceedings, the consequences of failure to pay arbitrators’ fees and the right of the parties to challenge an arbitration award on the basis of breach of the principles of law only if it is expressly provided for by the arbitration clause.
The main mandatory provisions concerning arbitration proceedings are in relation to due process: the parties and the arbitrators can decide the rules for the proceedings that they consider appropriate but all the parties must be given the same rights to defend themselves.
The Arbitration Act 1996 applies to arbitrations in England, Wales and Northern Ireland. The Arbitration (Scotland) Act 2010 applies to Scottish arbitrations. Schedule 1 of the Arbitration Act 1996 and section 8 of the Arbitration (Scotland) Act 2010 state the mandatory provisions.
The Arbitration Act 2010 (“the Act”), governs arbitrations commenced in Ireland from 8 June 2010. It applies to all arbitrations held in Ireland after the date of entering into force, both international and domestic.
Arbitration proceedings in Poland are regulated by Part V of the Polish Civil Procedure Code (CPC).
In principle, under art. 1184 §1 CPC, the parties are free to determine the procedure before the arbitral tribunal. However, several provisions of the Polish arbitration law are regarded as mandatory.
Mandatory provisions which cannot be contracted around include:
- Equal treatment of the parties
- The right to be heard and present a case
- Notice to the parties of scheduled hearings
- Service of all submissions on the other party
- Failure to file a statement of defence may not result in discontinuance or be treated as an admission of the claimant’s allegations
- Waiver of the right to object (adopting Model Law art. 4).