Following other leading institutions such as the ICC International Court of Arbitration, the Arbitration Institute of Stockholm Chamber of Commerce, the German Arbitration Institute, and the London Court of International Arbitration, the Vienna International Arbitration Centre (VIAC) updated their arbitration rules earlier this year. The Vienna Rules 2018 became effective on January 1, 2018 and apply to all proceedings that were initiated after December 31, 2017 (Article 47 Vienna Rules 2018).
VIAC's competence to administer international cases has not changed. However, from July 1, 2018 onwards, VIAC is also competent to administer cases where both parties have their seat or domicile in Austria (purely domestic cases) (Article 1 Vienna Rules 2018; cf. also Article 1 Vienna Mediation Rules 2018). Before the adoption of the Vienna Rules 2018, this competence was vested in the Austrian Regional Chambers of Commerce.
Electronic Case Management System
To facilitate the proceedings, VIAC introduced a new electronic case management system. This system affects the filing of the Statement of Claim and its service (Articles 7 and 12 Vienna Rules 2018). The Statement of Claim can either be filed in hardcopy or in electronic form (Article 7 Vienna Rules 2018). In addition, upon request of a party, the arbitral award may be sent to the parties in electronic form (Article 36 Vienna Rules 2018).
Security for Costs
The inclusion of a new provision on security for costs is a significant step forward in comparison to other international arbitration institutions. The Vienna Rules 2018 now explicitly grant the arbitral tribunal the power, upon request of the respondent, to order the claimant to provide security for costs. To obtain such an order, the respondent must demonstrate with a sufficient degree of probability that there is a risk it will not be able to recover costs if it prevails in the arbitration (Article 33 (6) Vienna Rules 2018).
Thus, the respondent has to demonstrate the existence of a potential cost claim and the recoverability risk. The first criterion will generally not create an obstacle, provided that the respondent has a solid defense on the merits and that the tribunal applies, for instance, the costs-follow-the-event rule. As for the recoverability, the new provision might become relevant when third party funders are involved.
In case of non-compliance with the tribunal's order to provide security for costs, the tribunal may suspend in whole or in part, or even terminate, the arbitration proceedings (Article 33 (7) Vienna Rules 2018).
Costs of the Proceedings
The most interesting rule changes relate to the costs of the proceedings. The Vienna Rules 2018 now state that arbitrators, parties, and party representatives shall conduct proceedings in an efficient and cost-effective manner; which can affect the amount and/or allocation of the costs (Articles 28 (1) and 38 (2) Vienna Rules 2018). VIAC may increase or decrease the arbitrators' fees up to 40 percent in relation to the ordinary fee schedule, taking into account the efficiency of the conduct of proceedings and the complexity of the case (Article 44 (2)(7) Vienna Rules 2018). The registration and administrative fees of the institution have been decreased for cases with a small amount in dispute and moderately increased for cases with higher amounts in dispute (Annex 3).
Vienna Mediation Rules 2018
VIAC has also amended its mediation rules (Vienna Mediation Rules 2018). Parties have the option to conduct stand-alone mediation proceedings or a combination of arbitration and mediation, so-called (Arb-)Med-Arb proceedings. In the latter case, the registration fee will be charged only once (Articles 10 (5) Vienna Rules 2018 and 4 (4) Vienna Mediation Rules 2018) and any administrative fees that have already been charged for arbitration will be deducted from those for mediation and vice versa (Articles 44 (11) Vienna Rules 2018 and 8 (8) Vienna Mediation Rules 2018). Additionally, VIAC can reduce the arbitrators' fees at its own discretion in case of so-called (Arb-)Med-Arb proceedings (Article 44 (10) Vienna Rules 2018). Parties are advised that only an arbitrator may render an enforceable arbitral award. Thus, if parties to mediation have agreed on a settlement, they should consider initiating arbitration proceedings in order to have the settlement agreement recorded in the form of an arbitral award on agreed terms according to Article 37 Vienna Rules 2018.
Apart from the changes discussed above and minor edits, the Vienna Rules 2018 remain, as to their substance, unchanged. Thus, the Vienna Rules have retained their essential character for which they are known and appreciated in the CEE/SEE region: a clear and slim set of arbitration rules and a reasonable cost regime that meets the needs of arbitration users.
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