Recent arbitration developments in Greece

YIAG E-news January 2012 (http://www.lcia.org/Membership/YIAG/E_News.aspx)

Arbitration in Greece: Overview of recent decisions of the Greek Supreme Court (the Areios Pagos)

The purpose of this report is to highlight recent developments in Greece concerning arbitration. In this context, reference is made to two recent arbitration-related decisions of the Supreme Court of Greece (the Areios Pagos) reviewing the possible annulment of two arbitral awards.

Possible annulment of an arbitral award on formalities grounds and arbitrators’ acting ultra vires
The decision no. 662/2011 of the Greek Supreme Court (available by reference to the decision number and year in the original Greek version and in Google translation, as well, at http://www.areiospagos.gr/en/INDEX.htm under “court rulings”) is considering the possible annulment of an arbitral award on formal grounds and arbitrators’ acting ultra vires. According to the facts, the parties had entered into an agreement including an arbitration clause covering any dispute arising from a construction contract between the land owner and the contractor. A request for annulment was lodged on the basis that the date on which the award had been rendered was not clear, a copy of the arbitral award had not been filed with the competent Court of First Instance as required by the local law and the arbitration award had been not notified to the claimant. The Supreme Court, in accordance with the Articles 892, 893 and 897 of the Greek Code of Civil Procedure, held that the Court of Appeals correctly rejected the above grounds for invalidity of the arbitral award, because improper filing or even absence of filing of the arbitral award as well as non-notification of the award to the parties do not constitute grounds for annulment, since an arbitral award is deemed complete and produces its legal effects from the date it has been signed by the arbitrators. Moreover, the exact date at which an award has been rendered may be found anywhere in the body of the award; the aim is to allow the parties to determine whether the decision has been issued within the validity period of the arbitration agreement; in a different case, it may consist ground for annulment in accordance with the Article 897 of the Greek Code of Civil Procedure. In addition, regarding the allegations of the respondent in respect of the arbitrators’ acting ultra vires, i.e. beyond the scope of the arbitration agreement, the Supreme Court concluded that the erroneous interpretation of a provision of substantive law, the insufficient reasoning of an arbitral award or an error on the merits of a case are not valid grounds for annulment of an award and in these cases the arbitrators may not be found to have acted ultra vires.

Limitation provisions as a public policy ground for annulment
In the context of the Decision No. 1377/2011 (available by reference to the decision number and year in the original Greek version and in Google translation, as well, at http://www.areiospagos.gr/en/INDEX.htm under “court rulings”) the Greek Supreme Court reviewed an arbitral award from a public policy perspective. The underlying facts are as follows: The parties had entered into a contract including an arbitration clause covering any dispute that may arise out of the transport of the claimants’ goods by the appellant. The permanent arbitration body of the Hellenic Chamber of Shipping held that the agreement between the parties constituted an ad hoc agreement and not a charter contract; hence, the claim was subject to a twenty-year limitation as provided for under Article 249 of the Greek Civil Code. Therefore, neither the provisions of the Greek Code of Private Maritime Law, nor Article 250 of the Greek Civil Code did apply, which both provide for shorter limitation periods. The appellant company claimed that the arbitral award was invalid since, under what was indeed a charter contract, the claimant had waived any limitation defense; the tribunal, by finding that the agreement was an ad hoc agreement, breached public policy rules in respect of limitation. The Supreme Court concluded that the parties’ agreement did indeed constitute a charter contract and therefore the arbitral award was to be annulled on the basis that public policy provisions are those mandatory rules whose application can not be excluded by the arbitration agreement (article 890 Greek Civil Procedure Code) and shall be fully implemented by an arbitral award, including with respect to limitation provisions (jus cogens). Nonetheless, the Supreme Court reaffirmed its thesis that inadequate justification, incorrect assessment of the merits, erroneous interpretation and application of legal rules are not sufficient grounds for annulling an award, as long as these flaws do not also amount to a breach of public policy.


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