Recent arbitration & mediation developments in Greece

YIAG E-news December 2010 (http://www.lcia.org/media/download.aspx?mediaId=134)

The purpose of this report is to highlight recent developments in Greece concerning arbitration and ADR. In this context, the first part of this report focuses specifically on two recent arbitration-related decisions of the Supreme Court of Greece (the Areios Pagos). In the second part, reference is made to a very recent law which implements the EC Directive 2008/52/EC of May 21, 2008 on certain aspects of mediation in civil and commercial matters (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:136:0003:0008:EN:PDF).

2010 Supreme Court decision on jurisdiction and waiver of annulment proceedings
First, decision no. 1308/2010 of the Supreme Court (available by reference to the decision number and year in the original Greek version at www.areiospagos.gr/en/ under “court rulings”) is considering the annulment of an arbitral award by a local court on issues of jurisdiction. The underlying facts are as follows: The Hellenic Republic and Olympic Catering SA – a subsidiary of Olympic Air SA which was Greece’s national air carrier at that time – had entered into a contract which provided for arbitration under the prerequisite that Olympic Air SA continued to hold at least 51% of Olympic Catering SA shares. In 2001, upon a compulsory reestablishment of Olympic Catering SA following the start-up of the new Athens’ airport, Olympic Catering SA initiated ad hoc arbitration proceedings claiming damages from the Hellenic Republic. The arbitral tribunal assumed jurisdiction and concluded that the Hellenic Republic had breached the contract by compelling reestablishment of Olympic Catering SA at the new airport and thereby caused damages to the catering company. However, the Supreme Court vacated the award and ruled that the arbitral tribunal did not have jurisdiction. This ruling was based on the grounds that Olympic Air SA, at the time the arbitral proceedings took place, only held 10.21% of Olympic Catering SA shares instead of the 51% required. Since Olympic Catering SA did not comply with the share requirement, the arbitration clause was unenforceable. Thus, as article 897 of the Greek Code of Civil Procedure stipulates, the arbitral tribunal exceeded the powers awarded to them by the arbitration clause. Moreover, the Supreme Court observed that the arbitration clause was also invalid owing to the fact that the parties had excluded award annulment proceedings before the local courts. The waiver of court annulment proceedings was held to violate Greek public order since such waiver must be read in light of article 20 of the Greek Constitution which defines legal protection by state courts as a public right. Accordingly, the parties are not free to waive annulment proceedings and any type of agreement under which the parties waive their rights to bring claims before courts is null and void.

2010 Supreme Court decision on arbitrability
Secondly, in its decision 506/2010 (available by reference to the decision number and year in the original Greek version at www.areiospagos.gr/en/ under “court rulings”), the Supreme Court dealt with arbitrability. The parties had entered into an agreement for exclusive distribution in Greece including an arbitration clause referring to the ICC rules of arbitration. A dispute arose as to the scope of the arbitration clause. In this respect, the Court of Appeals found that the arbitration clause was covering only contractual but not tort claims. However, the Supreme Court set aside the Court of Appeals’ decision on the following basis: As soon as a court finds either a gap or an obscurity in the wording of an arbitration clause, it is bound to search for the intent of the parties in accordance with the principle of good faith and in compliance with contractual ethics (Arts 173 and 200 of the Greek Civil Code) in order to assess whether the claims on hand were validly submitted to arbitration. In line with this reasoning, the Supreme Court concluded that an arbitration agreement may cover claims arising out of the parties’ contract and other claims that are held to be included due to the interpretation of the arbitration clause.

EC Directive on mediation in civil and commercial matters
Finally, the Greek Parliament recently voted in favor the implementation of the EC Directive 2008/52/EC of the European Parliament and of the Council of May 21, 2008 on certain aspects of mediation in civil and commercial matters. The Directive applies to disputes relating to rights that the parties can freely dispose of, namely rights of a private nature. Therefore, the courts are now entitled to invite the parties to have recourse to mediation at any stage of the trial. The law by which the Directive was implemented into the Greek legal system also addresses the enforceability of a mediator’s decision and provides a legal framework for the formation of an authority in charge of mediators, their education and accreditation.


© Stylopoulos & Associates

34 Omirou Str., 10672, Athens, Greece | T: +30 210 3832518 | F: +30 210 3821568 | E: [email protected]