The most significant advantages and disadvantages of arbitration can be encapsulated, as follows:
Advantages
Freedom to choose a Neutral and Expert Arbitrator;
Freedom to select the place, language and governing law of the Arbitration;
Faster and less costly than Court Litigation;
Arbitral proceedings are non – public and Awards may be kept confidential;
Awards are enforceable globally easier than court judgments.
Disadvantages
Award is not binding for third parties;
There are limited possibilities for Appeal;
There is a possibility of bias in favor of the party that appointed an Arbitrator
Which are the primary domestic sources of law relating to domestic and foreign arbitral proceedings, recognition and enforcement of awards?
Domestic arbitration law
Primary source of law for domestic arbitration is Articles 867 to 903 of the Greek Code of Civil Procedure (GCCP) in force.
International Commercial Arbitration
International Commercial Arbitration is regulated by Law No. 2735/1999, by which Greece transposed the UNCITRAL Model Law on International Commercial Arbitration of 21 June 1985 as a whole, with some minor amendments and improvements.
Arbitration proceedings are foreign if one or both of the litigant parties is established outside Greek territory, if the place of arbitration or execution of a commercial agreement is located outside Greek territory or if the subject matter of the arbitration agreement is more closely connected with one or more other countries.
Multilateral Conventions
Greece is a contracting party to the New York Convention (NYC) on the Recognition and Enforcement of Foreign Arbitral Awards, ratified pursuant to Law No. 4220/1961, without any declarations or reservations and in force since 14 October 1962. For those states that have not yet signed NYC Greece had been a contracting party to the Geneva Protocol of 24 September 1923, pursuant to Legislative Decree No. 4/1926 and, later, to the Geneva Convention of 1927 for the Enforcement of Foreign Arbitral Awards, pursuant to Law No. 5013/1931.
Greece is a contracting party to the Washington Convention of 1968 on the settlement of investment disputes between states and nationals of other State (the ICSID Convention), ratified by the Compulsory Law (AN) 608/1968, in force since 21 May 1969.
Greece is a signatory State of the UNCITRAL Model Law on International Commercial Arbitration, adopted by the United Nations Commission on International Trade Law on 21 June 1985.
Bilateral Investment Treaties
Greece has signed 44 Bilateral Investment Treaties up to today that regulate investment disputes arising between Greece and investing nationals or legal entities of the other contracting State.
What are the Permanent Arbitral Tribunals in Greece?
Apart from the ad hoc Arbitral Tribunals, Permanent Arbitral Tribunals are organised by respective Institutions, the most prominent of which, are:
The Arbitral Tribunal of the Athens Chamber of Commerce and Industry (www.acci.gr);
The Greek Centre of Mediation and Arbitration (www.sae-epe.gr);
The Hellenic Chamber of Shipping (www.nee.gr);
The Piraeus Association for Maritime Arbitration (www.pama.gr);
The Organisation of Mediation and Arbitration to support collective bargaining between social partners;
Panels organized by respective Bar Associations (as www.dsa.gr);
Panel organized by the Technical Chamber of Greece (www.tcg.gr);
Panel organized by the Stock Exchange of Athens (www.sea.gr).
What formal and other requirements exist for an arbitration agreement?
Arbitration is a creature of contract. The parties can agree only in writing to submit their claims to arbitration, by including an arbitration clause in a commercial contract, constituting an arbitral Tribunal. Parties can agree to submit their claims to arbitration, even after a dispute arises, pursuant to a submission agreement. The nullity of an arbitration agreement can be resolved if the parties unreservedly participate in arbitral proceedings.
Are all types of disputes arbitrable?
The Greek legal system tends to favour the arbitrability of all private disputes.
However, Greek legislation explicitly prohibits the resolution by arbitration of private rights, that cannot be freely disposed by the parties or public policy issues, which are not disposable, such as divorce disputes, labour disputes (apart from collective bargaining), civil status and legal capacity of individuals, free competition (unlike unfair competition), insolvency, etc.|
Exceptionally, even tax disputes can be arbitrable, once it is so provided in an investment agreement between Greek state and the foreign investor.
Which is the Applicable Law of the arbitral proceedings?
The parties have the discretion to choose the Applicable Law, both Substantive and Procedural, to be applied by the Arbitral Tribunal, provided they are in compliance with the public policy of Greece and with the rules of due process. In domestic arbitration Greek law applies, unless the parties agree to apply a different set of substantive rules. The choice of the procedural law depends upon whether Arbitral Tribunal is constituted on an ad hoc basis or in the context of a Permanent Arbitration Court. In the latter case the Arbitration Court should apply the Procedural Rules set by its By – Laws.
If the parties do not select any rules before the beginning of the proceedings, then the arbitrators can choose the substantive and procedural rules they deem most appropriate to the case.
In what circumstances is an arbitration agreement no longer enforceable?
Greek law ensures the strict execution of arbitration agreements, before and after the arbitral proceedings begin.
An arbitration agreement is no longer executable if the parties agree to terminate it, if both parties file with the ordinary judge or if the respondent does not challenge in due time the lack of competence of the ordinary judge by invoking an arbitration clause.
The termination of the underlying contract does not necessarily affect the arbitration clause, unless parties agree that it should.
How are arbitral proceedings initiated?
Ad hoc Arbitration usually begins with the service of a Lawsuit by the claimant to the respondent, including a Request for arbitration, the litigious claim and a summary of the disputable facts, along with the appointment of the arbitrator of the claimant.
Arbitration with a Permanent Arbitration Tribunal commences by the filing of a Request for arbitration by the claimant with the Secretariat of the Tribunal, including the litigious claim and a summary of the disputable facts, along with the appointment of his Arbitrator. In case it is provided by the Arbitration Agreement or by the Rules of the Court the appointment of a sole Arbitrator, the President of the Board selects him.
Respondent can file a counterclaim, and should appoint an arbitrator, if necessary.
How Arbitrators are selected?
The persons and number of the arbitrators can be selected by the parties, according to the arbitration agreement.
There are no specific restrictions concerning the persons that are entitled to act as arbitrators,but most often lawyers, university professors, honorary or even active judges are selected.
An arbitrator must be independent, neutral and impartial towards the litigant parties.
If the parties follow the procedures set by a Permanent Arbitral Court, then the selection of the Arbitrators can be made from the Panel of recommended arbitrators.
How can an arbitrator be challenged and replaced?
The appointment of an arbitrator can be challenged by one or both parties, only if there are objective facts or information, arising after the appointment, that may raise reasonable doubts as to the arbitrator’s impartiality, independence or possession of the qualities that the parties have agreed.
The arbitrator is obliged to declare any detail that might raise reasonable doubts about his impartiality or independence, even during the arbitral proceedings.
What is the nature of the relationship between parties and arbitrators and who pays the expenses and costs of Arbitration?
The power of the arbitrators originally derives from the arbitral agreement, and is of a contractual nature. However, once the arbitrators are appointed, then their role is reduced to a statutory role and they must act entirely impartially and independently towards litigant parties.
The arbitrators’ fees and expenses can be agreed with the parties at the inception of the proceedings, but they can also be allocated between the parties by the arbitral award.
Permanent Tribunals often have relatively high administrative fees, that must be paid in advance by the parties . Failure to pay the fees by one party will result in the stay of procedures, until they are paid.
If the parties have not agreed before on the allocation of the arbitration costs, the arbitra- tors have the discretionary power to allocate the costs between the parties, according to the final outcome of the case and the circumstances, usually at the expense of the defeated party.
The award of the expenses includes the administrative cost, experts’ and attorneys’ fees, though the costs awarded are usually much lower than the actual expenses paid by the winning party.
What is the liability of Arbitrators and their potential immunity from liability?
Arbitrators must perform their duties in good faith, indicate due diligence and render the award in compliance with the formal requirements provided by the law and the purpose of receptum arbitri.
In principle, Arbitrators enjoy immunity for their acts executed in the context of their duties.
However, if an arbitrator violates the obligations deriving from the appointment or commits an intentional breach of duty, a tort, willful misconduct, gross negligence or bribery during the conduct of his duties, then he is liable for damages towards the litigant parties, if there is no other remedy.
What is the procedure for disputes over jurisdiction?
The arbitral tribunal is competent to rule ipso jure on its own jurisdiction and on the validity of the arbitration agreement or after an objection by a party, raised immediately after the arbitral tribunal is constituted.
If the arbitration proceedings have already been initiated, the ordinary court must refrain from ruling on the arbitrators’ jurisdiction, until an arbitral award has been made.
If an ordinary court proceedings have initiated despite an existing arbitration agreement, the defendant has the right to raise at the outset of the trial the defense of lack of jurisdiction.
How is defined the place and language of arbitration?
If parties have failed to determine the place of arbitration, it is designated by the Tribunal, taking into account the circumstances, including the convenience of the parties or the needs of the evidence process.
If parties have failed to agree on the language (the written documents, the oral procedure, the arbitral award), it is up to the arbitral tribunal to determine it, taking into account the convenience of the parties and translation costs.
Is a hearing required and what rules of evidence apply?
The principle of due process and equal treatment of the litigant parties must govern the hearing process.
If the agreement does not provide for a hearing, the arbitral tribunal that decides whether the procedure should be only in writing or should also include testimonies of witnesses, presentation by counsels, cross-examination of the litigant parties before the Tribunal, etc. However, if a party requests an oral hearing, the arbitral court must hold it in the context of a fair trial
What types of evidence are admitted and how is the taking of evidence conducted?
The evidential documents and witnesses’ testimonies are admitted and freely evaluated by the arbitral tribunal, according to the applicable procedural rules.
In case technical issues are at stake the arbitral tribunal has the discretion to appoint an expert, unless parties have agreed to his person.
In what circumstances can the arbitral tribunal request assistance from an ordinary court?
The arbitral tribunal or one of the litigant parties has the right to request the assistance of the ordinary courts, in case of a witness testimony under oath or the mandatory appearance of a witness before the Tribunal.
How is confidentiality ensured?
In principle, all proceedings are subject to confidentiality, unless parties choose publicity. Deliberations of the arbitrators for prejudgment rulings or the issuance of the award are required to be always confidential
What interim measures may be ordered by courts before and after arbitration proceedings have been initiated?
Interim measures may be ordered by the ordinary courts before or by the Arbitral Tribunal after the arbitration proceedings have been initiated, if there is an
imminent risk of irreparable prejudice or damage of a right or of evidences, unless the arbitration agreement explicitly prohibits them.
The ordinary court is competent to enforce the interim measures ordered by the arbitral tribunal.
An award should be rendered by the majority of its members or a unanimous vote is required?
The arbitral award can be rendred legitimately by the majority of its members and there is no need for a unanimous vote. The dissenting opinion must always be issued, as part of the arbitral award.
What form and content requirements exist for an award?
The award must be issued in writing and must have the following content :
the names of the arbitrators;
the place and date of the arbitration;
the names of the litigant parties;
the arbitration agreement and the specific subject matter of it;
the statement of the facts;
the Award with its reasoning;
the signatures of all the arbitrators or at least the majority of them ;
date of the issuance of the award.
Does the award have to be rendered within a certain time limit?
The award must be rendered within a reasonable time, under the circumstances of the case, which is defined by the Arbitral Tribunal and can be extended by it.
By what other means than an award can proceedings be terminated?
The arbitration is terminated with the issuance of the arbitral award by the tribunal. However, proceedings can be terminated when a settlement has been reached, the parties mutually agree to complete the proceedings, if the applicant party withdraws its application for an award or if the continuance of the proceedings is impossible or redundant.
How are the expenses of the arbitral proceedings allocated in awards?
If the parties have not agreed before on the allocation of the arbitration costs, the arbitrators have the discretionary power to allocate the costs between the parties, according to the final outcome of the case and the circumstances, usually at the expense of the defeated party.
The award of the expenses includes the administrative cost, experts “and attorneys” fees
Does the arbitral tribunal have the power to correct or interpret an award on its own or at the parties’ initiative?
Each party has the right, within 30 days of the service of the award, to request from the arbitral tribunal the correction of an award concerning miscalculations, the typing or editing errors, the interpretation of a specific part of the award, without altering its final orders.
How and on what grounds can awards be challenged and set aside?
The arbitral award may be set aside by filing an annulment petition before the competent Appeal Court, within three months after the service of the award to the party filing the complaint.
The arbitral award can be set aside if the claimant party proves any of the following:
one of the parties to the arbitration agreement did not have the capacity to sign such an agreement;
the arbitration agreement is not valid;
one party was not properly notified of the arbitrator’s appointment or proceedings, or failed to put forward its arguments;
the arbitral award refers to a dispute not included in the arbitration agreement, or contains provisions that go beyond the terms of the agreement;
the tribunal’s composition or the arbitral procedure was not consistent with the agreement or the Law No. 2735/99;
the subject matter of the dispute is not subject to arbitration under Greek law or the award is in conflict with international public policy (Art 33 GCC). The court of appeal decision can be appealed with the Supreme Court of Greece only on the grounds of legal questions.
The court of appeal decision can be appealed with the Supreme Court of Greece only on the grounds of legal questions.
What requirements exist for recognition and enforcement of domestic and foreign awards?
Domestic arbitral awards are binding and directly enforceable from the date they are issued, once all kind of remedies have been exhausted or are no longer available.
Recognition and enforcement of a foreign arbitral award is made pursuant to NYC, provided that the recognition requirements set out in article 4.1 of the NYC are met and none of the obstacles referred to in article 5 of NYC of the same Convention exist.