The Austrian legal system is based on codified principles of civil law. Judicial precedents are not binding,but are strongly taken into consideration by courts and the parties in dispute.
In Austria, all courts are federal courts. Austria's court system is composed of District Courts(Bezirksgerichte), Regional Courts (Landesgerichte), Courts of Appeal (Oberlandesgericht) and theAustrian Supreme Court (Oberster Gerichtshof). In addition to the general court system, there arespecialized courts that rule on specific subject matters, for example commercial law or labour andemployment law disputes.
Currently, there are in total 116 District Courts, 20 Regional Courts, 4 Courts of Appeal and the SupremeCourt in Austria.
Generally, minor cases, i.e., cases valued up to EUR 15,000, are heard before the District Courts in thefirst instance and the Regional Courts act as the appellate courts. Major cases, i.e., cases with amounts indispute higher than EUR 15,000 are heard before the Regional Courts in the first instance and appealsare decided by the Courts of Appeal in second instance. In general, proceedings consist of maximumthree stages; with a Court of Appeal or the Austrian Supreme Court acting as the third instance.
In the first instance, in addition to low value cases, District Courts also handle all cases with the followingtypes of matters: (i) claims for alimony and child support as well as disputes over the establishment orcontestation of paternity; (ii) marital disputes; and (iii) all civil cases concerning the disturbance ofpossession or property, easements, lease or tenancy relationships.
Additionally, in Vienna there is a special District Court for commercial matters (Bezirksgericht fürHandelssachen Wien) as well as the Commercial Court of Vienna (Handelsgericht Wien) on a regionallevel. Both are dealing with all commercial matters i.e. shareholder disputes, business acquisitions ordisputes between businesses. Furthermore, there is the Labour and Social Court of Vienna that hasjurisdiction to rule on matters expressly provided for by law regarding employment relationships and socialsecurity issues.
If commercial, labour or social security disputes arise that are not within the competency of the Viennesecourts, the general courts are competent and the rules of competency of District and Regional Courts, asset out above, apply.
The Austrian Supreme Court is at the top of the judicial hierarchy in Austria. It primarily serves as a courtof cassation. It is the court with appellate jurisdiction in criminal and civil cases, commercial matters, casesof administrative review and labour and social security disputes. In almost all civil cases it is the court ofthird instance. However, grounds of appeal to the Austrian Supreme Court are limited to substantial legalissues concerning substantive and/or procedural law.
The Austrian court system is rather efficient in European and international comparison. Civil proceedingsare commenced by the filing of a claim with the competent court. The claim must contain the facts of thecase and offer supporting evidence. Under Austrian law, the claimant must also include the relief orremedy sought in the matter. Remedies which the claimant may request include the following:
-a decision on performance of an obligation; holding the defendant liable to pay a certain amount ofmoney, deliver or surrender moveable property, pay damages or to cease and desist (i.e., acts of unfaircompetition);
-a declaratory decision; a judgment determining the existence or non-existence of a legal relationship orright, including the authenticity of a document; or
-a decision that leads to the creation, amendment or cancellation of a legal relationship.
After a claim is filed, the court considers whether it has jurisdiction over the claim. If it has jurisdiction overthe dispute, it serves the claim to the defendant, along with an order for the defendant to submit a statementof defence within a specified period of time. The defendant's statement of defence must include anexplanation of the facts and evidence which it relies on, including the judgment sought in response to theclaim, i.e. dismissal of the claim in whole or in part. Moreover, the defendant may also raise set-off claims.
Once the defendant submitted its statement of defence, the court initiates the court proceedings whichtypically consist of several oral hearings. In Austria, jury trials do not exist in civil proceedings. The trialis held before and decided by either a judge or a panel of judges, depending on the type and stage ofthe proceedings.
Trials serve the highly important purpose of allowing the presentation and gathering of evidence. Evidencepresented by the parties during the proceedings may include documents, witnesses, expert witnesses, andtestimony of the parties involved in the dispute. The approved witnesses are questioned by the judge firstand can then be further examined by the parties' attorneys. After the hearing and taking of evidence hasbeen concluded, the judge will close the proceedings and issue his/her judgment, usually in writing.
According to the available statistics, first instance proceedings pending before a District Court take on average6 (six) months; in Regional Courts, the average time is 13 (thirteen) months. Only 2.3% of dispute resolutionproceedings take longer than 3 (three) years. In appellate proceedings, evidence is generally not re-examinedand new evidence or new allegations are not admitted. Appellate proceedings may take between 6 (six)months and 1 (one) year. The Supreme Court usually renders its judgment within 1 (one) year.
A party may also request interim remedies. A court may order a preliminary injunction to secure inter aliamoney claims either before or during litigation proceedings. In order to have a request for a preliminaryinjunction granted, the court must have a sufficient reason to believe that (i) the defendant will prevent orendanger the enforcement of a potential judgment by destroying, concealing or transferring assets; or, (ii)the judgment would otherwise have to be enforced in a state in which enforcement is not guaranteed byinternational treaties or by the laws of the European Union. Potential preliminary injunctions may include anorder for the freezing of bank accounts or attachment of the defendant's assets, including real estate. Thecourt may even extend an injunction to order a third party not to pay accounts receivable to the defendant.
The final judgment issued by the court also includes an order specifying which party has to bear the costsof the proceedings. Litigation costs are mainly composed of court and attorneys' fees, expenses for expertopinions and travel expenses for witnesses. Generally, litigation costs are awarded against the losing partywho must reimburse the winning party. However, if either party prevails with a portion of their claim, thecosts are divided on a pro-rata basis.
The calculation of litigation costs is based on the Austrian Act on Attorneys' Tariffs(Rechtsanwaltstarifgesetz) and the Act on Court Fees (Gerichtsgebührengesetz). It is important to notethat the winning party is only entitled to attorneys' fees on the basis of the Austrian Act on Attorneys' Tariffs(Rechtsanwaltstarifgesetz). Higher Fees paid to the attorney on the basis of a separate fee agreement(e.g. on the basis of hourly rates) are not subject to reimbursement in the course of civil proceedings.
In Austria, both contingency fees that entitle an attorney to a certain percentage of the amount obtained bythe claimant as well as the quota litis (an agreement by which the creditor of a sum difficult to recoverpromises a portion to the person who undertakes to recover it) are prohibited.
Over the past years, criminal authorities have become more interested and better equipped to startinvestigations in business crime matters. In fact, criminal proceedings are often conducted parallel to civilproceedings. Criminal proceedings can be a powerful tool for recovering or securing assets or any otherfunds that are derived from criminal offences.
Furthermore, since the Austrian Code of Civil Procedure (CCP; Zivilprozessordnung), is characterized byrather restrictive disclosure rules, criminal proceedings represent an effective tool to obtain evidence,which would otherwise not be accessible, from the opposing party. In addition, a criminal court may alsodecide on civil claims brought against the accused by issuing a binding and enforceable decision, therebyavoiding time-consuming and costly civil proceedings that bear a substantial cost risk for the parties.Under Austrian law, both individuals as well as legal entities can be subject to criminal prosecution.
The criminal investigation is usually conducted by the criminal investigation department of the police(Kriminalpolizei) under the supervision of the public prosecution (Staatsanwalt). For corruption matters andlarge volume white-collar crime cases, a special prosecution authority is competent; the PublicProsecution Authority for Cases of White-collar Crime and Corruption (Wirtschafts- undKorruptionsstaatsanwaltschaft). The overseeing judge (Haft- und Rechtsschutzrichter) at the localRegional Court (Landesgericht) decides upon objections to investigative measures as well as requests toimpose or terminate investigative custody. Certain investigative measures require the overseeing judge'sapproval; in particular measures with coercive character (e.g. house searches).
A conviction can be avoided (also, a potential penalty can be reduced) by cooperating with the publicprosecution, e.g. as chief witness (Kronzeugenregelung). The benefit derived from such cooperationvaries depending on the stage of the investigation. If the public prosecution finds that there is sufficientbasis for a conviction, main criminal proceedings (Hauptverhandlung) are initiated by filing an indictment.In other words: The case is brought to public trial.
The first instance main criminal proceedings are conducted by District Courts (Bezirksgericht), in minorcases (with penalties of up to 1 (one) year of imprisonment) and Regional Courts (Landesgericht). WhileDistrict Court trials are held by single judges, the composition of the Regional Court varies depending onthe charges: single judge; panel of one judge and two lay judges; panel of three judges and a jury ofeight persons.
Austrian criminal procedural law provides for a rather complicated system of two instances. Either theCourt of Appeal or the Austrian Supreme Court is on the top of the pyramid.
As of 1 January 2015, parties to criminal proceedings may also file a complaint with the ConstitutionalCourt (Verfassungsgerichtshof) if the parties consider the statutes applied to the case unconstitutional.Such complaints may only be filed in connection with an appeal against a first instance decision.
Potential victims of a criminal offence are distinctly recognized as parties to criminal proceedings; thisenables potential victims access to information that can also be used in the pursuit of their civil claims.Potential victims may, inter alia:
-have access to the files (which may be subject to restriction);
-participate in certain phases of the criminal investigation;
-participate in the main proceedings (trial) with the right to ask direct questions to the accused, towitnesses and to expert witnesses; and
-request that the criminal investigation be continued if the public prosecutor decides to terminate theinvestigation.
Any victim (legal entities as well as natural persons) may also join criminal proceedings as a “privateparty” (Privatbeteiligter) via a formal statement of accession (Privatbeteiligtenanschluss). In addition tothe aforementioned rights, a private party is also entitled to, inter alia:
-formally request the collection of evidence;
-act as a subsidiary prosecutor if the public prosecutor drops the charges;
-file a complaint if the criminal court terminates the criminal proceedings;
-present its civil claims against the accused and request that the criminal court decide upon its civilclaims; and
-file an appeal if the criminal court fails to decide on (or finds in favour of) its civil claims.
While criminal proceedings are a powerful tool to gain information otherwise inaccessible through civilproceedings, criminal courts are reluctant to actually award civil claims (in total). Even in cases ofconvictions, victims are often relegated to the civil courts.
The Austrian Insolvency Act (Insolvenzordnung) which came into force on 1 July 2010 distinguishesbetween three types of insolvency proceedings:
-bankruptcy proceedings (Konkursverfahren);
-restructuring proceedings where a bankruptcy receiver is appointed
(Sanierungsverfahren ohne Eigenverwaltung); and
-restructuring proceedings where the debtor retains the right to self-administration
(Sanierungsverfahren mit Eigenverwaltung).
While bankruptcy proceedings usually lead to a realisation or winding-up of the debtor's estate and thedistribution of the proceeds of its assets among its creditors, the aim of restructuring proceedings is toenable the debtor to continue its business and to be discharged from its debts (Restschuldbefreiung).
Further, the Austria Business Reorganisation Act (Unternehmensreorganisationsgesetz) provides for atype of proceedings which are not technically insolvency proceedings, but which enable the debtor toreorganize its business.
Precondition for the opening of insolvency (bankruptcy or restructuring) proceedings is that the debtor isilliquid, or in cases where the debtor is a corporate entity, either illiquid or over-indebted in terms ofinsolvency laws. Illiquidity (Zahlungsunfähigkeit) means that the debtor is unable to pay its debts in duetime and is not in a position to acquire the necessary funds to satisfy its due liabilities within areasonable period of time. If a corporate entity's liabilities exceed its assets and the company has anegative prospect, the company is considered to be over-indebted in terms of the insolvency law(insolvenzrechtliche Überschuldung).
Both debtors and creditors have the right to file a petition for bankruptcy; however, a petition for thecommencement of restructuring proceedings can only be filed by the debtor. In addition, once it is apparentthat the criteria for commencing bankruptcy proceedings are fulfilled, the debtor is obliged to apply for theopening of bankruptcy or restructuring proceedings without culpable delay, and in any case, no later than 60(sixty) days. The debtor may already file for the opening of restructuring proceedings in case of threatenedilliquidity. Late filing for bankruptcy or omission to do so may result in civil and/or criminal liability.
The purpose of bankruptcy proceedings is to determine the value of the debtor's estate (Konkursmasse),to realize the debtor's assets and to distribute the proceeds among its creditors. The rights of securedcreditors remain in principle unaffected. The costs of the insolvency proceedings including the court-appointed bankruptcy receiver's fees rank as priority claims. In effect, the unsecured creditors bear thecosts of the proceedings. After liquidation and distribution of the debtor's estate the bankruptcyproceedings are terminated by court order.
However, termination of the bankruptcy proceedings does not have the effect of discharging theunsatisfied claims of creditors which have not been satisfied in full. Creditors with remaining claims whichhave been verified by the receiver, or by a court order, may enforce their rights against the debtor withrespect to the unsettled portion of their claim for a period of 30 (thirty) years, provided the debtor withinsuch period, comes into possession of any assets. In the case of a corporate debtor, bankruptcy usuallyleads to the ultimate dissolution of the company, thus preventing later recourse to the debtor for paymentof outstanding amounts.
Restructuring proceedings enable the illiquid or over-indebted debtor to continue its business and to bedischarged from its debts (Restschuldbefreiung) by paying a certain part of the debts. The debtor has tooffer a restructuring plan (Sanierungsplan) which must be approved by the majority of its (unsecured)creditors and the insolvency court. Rights of secured creditors remain in principle unaffected. TheInsolvency Act provides for the following two types of restructuring proceedings:
-In restructuring proceedings where a bankruptcy receiver is appointed (Sanierungsverfahren ohneEigenverwaltung) the debtor loses its right to dispose over its assets and the court-appointedbankruptcy receiver manages the insolvency estate. The debtor must offer a minimum payment of 20%of the debts within a period of 2 (two) years to its unsecured creditors.
-In restructuring proceedings where the debtor retains the right to self-administration (Sanierungsverfahrenmit Eigenverwaltung) the insolvency court appoints a restructuring administrator that supervises the debtorand has to approve certain transactions. The debtor can be discharged from its debts by paying aminimum quota of 30% to its unsecured creditors within a period of 2 (two) years. Further since 1995, aspecial insolvency regime has applied to natural persons (entrepreneurs and private individuals). Thisspecial insolvency regime became necessary as natural persons facing financial difficulties were oftenunable to meet the requirements for a restructuring plan and were thus denied the benefit of dischargingany claims that exceeded the settlement quota (Restschuldbefreiung). At the same time, bankruptcyproceedings did not offer a satisfactory solution to solving their debt problems, since creditors would beable to enforce their rights with respect to unsettled claims against the debtor for a period of 30 (thirty)years. The Insolvency Law Amendment Act 2017 enacted amendments to this special insolvency regimeaiming to further facilitate the debt discharge of natural persons.
Insolvency proceedings are conducted by the insolvency court, which is a special unit within each court offirst instance (Gerichtshof 1. Instanz); except for insolvency proceedings of private individuals which areconducted before the district court (Bezirksgericht). A regional exception exists for Vienna where thecompetent insolvency court is the Commercial Court of Vienna (Handelsgericht Wien).
In all types of insolvency proceedings unsecured creditors have to file their insolvency claims within adeadline set by the insolvency court. If a creditor fails to meet this deadline, a further creditor's hearingmay be scheduled at the expense of the creditor who failed to meet the deadline.
Vienna, Austria’s capital city, is a major hub for arbitration in Europe, and the Vienna International ArbitralCentre of the Federal Economic Chamber (VIAC) is not only the most important arbitration institution inAustria, but also one of the leading arbitration institutions in Europe, especially regarding disputes relatingto Central, Eastern and Southeastern Europe. In addition to VIAC, Vienna also boasts a specializedarbitral panel established by the Vienna Stock and Commodity Exchange. This is a permanent specializedarbitral panel that has exclusive jurisdiction over disputes arising from exchange transactions, i.e.,disputes between members of the Vienna Stock and Commodity Exchange and disputes concerningmerchandise contracts related to the Vienna Stock and Commodity Exchange.
Internationally, dispute resolution through arbitration has several advantages. In particular, arbitrationallows for expeditious proceedings to obtain a final decision. Arbitral awards rendered in Austria aregranted the same effect as a court judgment under Austrian law, while the international treaties signed byAustria facilitate transnational recognition and enforceability of such arbitral awards in more than 150countries worldwide.
Arbitration in Austria is governed by Chapter 6, Part 4 of the CCP, which defines the prerequisites forarbitration including the validity of arbitration agreements and the minimum standards that must beobserved for a fair trial.
The original text of the law dates back to 1895 and, by virtue of the flexibility of the provisions, helpedestablish Austria as an attractive seat for arbitration proceedings. In order to keep the law in line withinternational developments in the field of arbitration, these provisions were fully revised on the basis of theUnited Nations Commission on International Trade Law (UNCITRAL) Model Law in 2006. Thus, arbitrationin Austria takes place in a frame-work that is familiar to all international practitioners. The new ArbitrationAct applies to arbitration proceedings initiated on or after 1 July 2006 as well as to arbitration agreementsconcluded on or after this date. In 2013, the Austrian legislator even went a step further to ensure thecelerity of arbitral proceedings by, inter alia, providing that challenges to an arbitral award rendered inAustria are to be submitted directly to the Austrian Supreme Court as first and final instance. Effective asof 1 January 2014, this amendment helps prevent lengthy challenge proceedings through all instances ofappeal and, in addition, warrants that a highly qualified and specialized judicial senate (consisting of fiveSupreme Court judges) hears such cases. Furthermore, since the revision of 2013, all matters relating tothe constitution of the arbitral tribunal (including challenge and replacement of arbitrators) are alsosubmitted to this specialized senate of the Supreme Court. This will undoubtedly further enhance Austria’sinternational reputation in arbitration.
Generally, an arbitration agreement may be concluded between parties for both existing and future civilclaims that may arise out of or in connection with a defined legal relationship. Exceptions include:
-public law matters, including marital and family matters;
-penal law matters;
-tenancy matters, including disputes on the termination of contracts regarding the lease of apartments and
-claims relating to the Non-Profit Housing Act; and
-collective labour matters and social security law matters.
In addition, arbitration agreements relating to an employment contract (except for managing directors oflimited liability companies and stock corporations) and arbitration agreements between a business and aconsumer have stricter form and content requirements. First, the arbitration agreement may only beconcluded for existing disputes. Moreover, the agreement to arbitrate must be contained in a separatedocument and be personally signed by the consumer/employee (by hand). The seat of arbitration must beexplicitly stipulated. Prior to conclusion of the arbitration agreement, the consumer/employee must havebeen provided with a written notice explaining the significant differences between arbitration and courtproceedings. However, individual negotiation of the arbitration agreement is not required.
The standard prerequisites for the valid conclusion of a legally binding arbitration agreement (if neither anemployee nor a consumer is involved) are by far more lenient: The arbitration agreement must be inwriting and indicate the parties’ intention to submit (certain or any) disputes arising out of a defined legalrelationship to arbitration. Further, the parties may determine the specifics of the arbitral procedure; this isusually done by referring to the rules of a specific arbitral institution, such as VIAC (Vienna Rules), theInternational Chamber of Commerce (ICC) or the London Court of International Arbitration (LCIA).
If the parties do not stipulate a specific procedure (be it individually negotiated or by reference to the rulesof an arbitral institution), Austrian law contains a number of default provisions regulating the mostimportant procedural aspects. For example, Austrian law foresees that where there is no agreementbetween the parties, the number of arbitrators shall be three; each party shall appoint one arbitrator andthe two party-appointed arbitrators shall appoint the third arbitrator, who shall serve as the chair of thearbitral tribunal. Should (one of) the parties fail to appoint an arbitrator or the two party-appointedarbitrators fail to appoint a chair, either party may file a request to the Supreme Court to make thenecessary appointment. Austrian law requires that arbitrators must be impartial and independent. The onlyother restriction that parties must observe is that Austrian judges may not accept appointments asarbitrators. Otherwise, the arbitrators may be freely chosen by the parties to the dispute.
Regarding interim measures, Austrian law foresees that an arbitral tribunal’s competence includes theissuance of interim protective measures, unless the parties have agreed otherwise. Any interim measuresshall be issued in writing. However, the arbitral tribunal may ask the requesting party to provideappropriate security prior to ordering interim measures. The competence of an arbitral tribunal to issueinterim protective measures does not affect or limit a party’s right to request a state court to order interimmeasures. In any case, arbitral tribunals have no authority to enforce interim measures.
Interim measures must always be enforced by the state courts. Specifically, the competent district courtshall enforce such measures upon the request of a party. Where an order for an interim measure providesfor a means of protection unknown under Austrian law, the district court may upon request enforce suchorder nonetheless by means of the legal instrument under Austrian law which comes closest to themeasure ordered by the arbitral tribunal.
Austrian courts generally enforce interim measures issued by arbitral tribunals, regardless of whether ornot the seat of arbitration is within Austria. The list of grounds for refusal is limited and a district court mayonly refuse enforcement if:
-the seat of arbitration is in Austria and the measure suffers from a defect which constitutes grounds forsetting aside an arbitral award;
-the seat of arbitration is not in Austria and the measure suffers from a defect which would constitutegrounds for refusal to recognise and enforce a foreign arbitral award;
-the enforcement would be incompatible with an earlier Austrian or foreign court measure; or
-the means of protection is unknown under Austrian law and no appropriate means as provided byAustrian law were requested.
Upon request of a party, the district court shall set aside the enforcement if:
-the term of the measure as set by the arbitral tribunal has expired;
-the arbitral tribunal has limited the scope of or set aside the measure;
-a change of circumstances has made the order unnecessary (including that the claim to be secured hasbeen found to be unjustified); or
-security was provided, making the enforcement unnecessary.
Austrian law contains an exhaustive list of the grounds for challenging arbitral awards (Section 611 CCP).Such grounds for challenge include:
-lack of jurisdiction;
-lack of due process;
-improper composition of the arbitral tribunal;
-violation of the Austrian procedural ordre public;
-non-arbitrability of the subject matter;
-grounds for retrial under civil procedural law; and
-violation of the Austrian substantive ordre public.
A challenge must be filed within 3 (three) months from the notification of the award.
Overall, Austrian courts have a very friendly attitude towards arbitration. Consequently, Austrianbusinesses are generally willing to conclude an arbitration agreement, especially in the context ofinternational business transactions.
Taking effect as of 1 January 2018, VIAC has introduced revised arbitration rules (Vienna Rules) andmediation rules (Vienna Mediation Rules). The most significant amendment is VIAC's new competence toadminister domestic disputes. In this context, VIAC has adjusted its administration fees (i.e. reduced its feesfor smaller amounts in dispute and enhanced its fees for larger amounts in dispute) and grants the SecretaryGeneral a wider discretion to determine the fees for the institution and the arbitrators depending on thespecific circumstances of a case. Finally, the simultaneous revision of the mediation rules demonstratesVIAC's commitment to offer both arbitration and mediation services as well as a combination thereof.
The enforcement of foreign judgments (i.e., non-EU judgments) in Austria is contingent on the issuance ofa declaration of enforceability by the competent Austrian court. The enforcement proceedings aregoverned by the Austrian Enforcement Act (Exekutionsordnung).
By virtue of its membership in the EU, the procedure for the enforcement of EU judgments in Austria issubject to a standardized and simplified procedure, which is presently governed by the EuropeanParliament and Council Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement ofjudgments in civil and commercial matters applicable to proceedings instituted, authentic instrumentsformally drawn up or registered, and court settlements approved or concluded on or after 10 January2015. For matters before that date, the former Council Regulation No. 44/2001 still applies.
One of the main aims of European Regulation No. 1215/2012 was to limit the scope of forum shopping.The former legal situation allowed parties to stall anticipated proceedings by pre-emptively initiatingproceedings in other jurisdictions known for overly lengthy proceedings. For the time the pre-emptivelyaddressed court takes to decide upon its (non)competence over the matter, all other EU Courts areprevented from hearing the case. The amendment battles this strategy (known as the "Italian Torpedo") bystrengthening the procedural effect of choice of forum agreements. Consequently, the amendments of thenew Regulation have to be taken into account in the wording of contracts.
As a general rule, a judgment rendered in a Member State of the EU is recognized in any other MemberState without any special procedure. Notwithstanding this, there are a number of limited grounds on whichrecognition of a foreign judgment can be denied. These exceptions include cases in which the recognitionof a given judgment is manifestly contrary to the ordre public of the Member State in which recognition issought, or when the judgment was rendered in violation of due process.
Other grounds for the denial of recognition are, inter alia, if the decision is "irreconcilable with a judgmentgiven between the same parties in the Member State in which recognition is sought", or if the judgment is"irreconcilable with an earlier judgment given in another Member State or in a third State involving thesame cause of action and between the same parties", provided that the earlier judgment can be enforcedin the Member State in which recognition is sought.
According to the Austrian Supreme Court, the requirement that the foreign judgment be enforceable in thestate of origin does not imply a requirement that the title be executed in the country in which it wasrendered, but rather that such judgment is only formally enforceable.
Specifically, in order to determine the authenticity of a judgment to be enforced in a given Member State,the party seeking recognition must provide a copy of the judgment, accompanied by a Certificate ofAuthenticity issued by the court that rendered the decision in the country of origin using the form set out inAnnex I of European Regulation No. 1215/2012. The translation of judgments and accompanyingdocuments is not mandatory. However, the court may still order the party to produce a (certified)translation of the judgment and the accompanying documents in the official language of that MemberState. Thus, in order to avoid such a delay, attaching a certified translation is highly recommended.
With respect to judgments of foreign/non-EU Member States, the requirement to have the judgmentdeclared enforceable prior to the actual enforcement may turn out to be a rather cumbersome proceduredepending on the origin of the judgment. If reciprocity cannot be established, meaning that the foreignstate does not enforce Austrian judgments, success is unlikely.
Any decision by a foreign/non-EU court must be declared enforceable by an Austrian court in order for thedecision to be enforceable in Austria. The general requirements for the issuance of a declaration ofenforceability are:
-the foreign judgment is enforceable in the state in which it was rendered; and,
-reciprocity with the state of origin is established by bilateral treaties or other instruments.
The party must request the declaration of enforceability from the competent District Court, i.e., in general,the District Court of the opposing party's domicile. In addition, the party is required to enclose certifiedcopies of all relevant documents.
However, even if the requirements for enforceability are met, the declaration of enforceability may still berefused if:
-pursuant to Austrian rules on jurisdiction, the foreign court would, under no circumstances, havejurisdiction over the legal matter;
-the opposing party was not properly served with the document that initiated the foreign proceedings;
-the judgment is not formally enforceable;
-the opposing party could not properly participate in the foreign proceedings due to irregularities in theproceedings; or
-the judgment and/or its enforcement violate(s) basic principles of Austrian law (ordre public).
The court issues its decision without hearing the opponent. However, the opponent (as well as the requestingparty, if enforceability was refused) may file an appeal against the decision within 1 (one) month.
Once the declaration of enforceability is effective, the foreign judgment may be considered equal todomestic enforceable titles. Thus, the request for enforcement of the decision can be submitted to thecourt and, if approved, the enforcement of the judgment finally takes place. However, it is also possible toinclude the request for enforcement already in the request for declaration of enforceability. In this case, thecourt has to decide on both requests at the same time.
Regarding the enforcement of foreign arbitral awards, Austria is party to the 1958 New York Convention onthe Recognition and Enforcement of Foreign Arbitral Awards. Austria acceded to the Convention in 1961,with the reservation that the Convention will only be applied to the recognition and enforcement of awardsmade in the territory of another contracting State. However, in 1988, Austria withdrew this reservation.Furthermore, Austria is also party to the 1961 European Convention on International CommercialArbitration. Thus, if both Conventions are applicable to an arbitral award to be recognised and enforced inAustria, Article IX of the European Convention stipulates as follows: if the arbitral award was set aside inthe country where it was made, only certain grounds of setting aside justify the refusal of recognition andenforcement. In particular, the violation of the ordre public is not such a ground and is thus not a legalobstacle for recognition and enforcement. Finally, Austria is a party to the Convention on the Settlement ofInvestment Disputes between States and Nationals of Other States (ICSID Convention).
There is legal aid for natural persons as well aslegal entities who cannot afford the costs of legalproceedings.
There are no civil jury trials in Austria.
-Litigation costs include court fees, attorneys'fees and expenses for expert opinions andwitnesses.
-Court fees have to be paid upon filing the claim.
-Court fees in the first and second instanceare to be paid by the party filing theclaim/appeal.
-If a claim is filed by a foreign party andenforcement of a decision on reimbursementof litigation costs is not safeguarded, theforeign party can be ordered to pay asecurity deposit.
-Litigation costs are awarded against the losingparty who must reimburse the winning party.
-If a claimant has been partially successful,the costs of both sides are divided on a pro-rata basis. However, reimbursement ofattorney fees will only be made on the basisof the fees provided for in the Act onAttorneys' Tariffs.
-The actual attorney fees of a party(depending on the fee agreement betweenattorney and client) may be substantiallyhigher, but are not part of thereimbursement.
-Agreements on Quota litis and contingencyfees are generally prohibited for Austrianlawyers in all types of proceedings.
STANDARD CIVIL PROCEEDINGS
Court fees are based on the Court Fees Act anddepend on the amount in dispute. Examples:
Amount in dispute EUR 500,000: Court fees:EUR 9,488 in first instance;
Amount in dispute EUR 1,000,000: Court fees:EUR 15,488 in first instance;
Amount in dispute EUR 5,000,000: Court fees:EUR 63,488 in first instance.
Assumptions based on an amount in disputeof EUR 1,000,000 (based on the Austrian Act onAttorneys' Tariffs plus hourly rates):
First instance: in total EUR 35,000 to 50,000, incl.preparation of two briefs, four hearings with aduration of 1h, 2h, 4h, and 6h, preparation ofhearings/meetings with client, witnesses,correspondence with client; Second instance: intotal EUR 8,000 to 20,000; incl. one brief, nohearing; Third instance: in total EUR 7,000 to18,000; incl. one brief, no hearing.
Assumptions based on an amount in disputeof EUR 10,000,000 (based on the Austrian Act onAttorneys' Tariffs plus hourly rates):
First instance: in total EUR 75,000 to 250,000,incl. preparation of 4 comprehensive briefs, sixhearings with duration of 2h, 4h, and 4 x 8h,preparation of hearings/meetings with client,witnesses, correspondence with client; Secondinstance: in total EUR 30,000 to 60,000, incl. onebrief, no hearing; Third instance: in total EUR25,000 to 50,000, incl. one brief, no hearing.
Pro Bono System
Simple cases:first instance: 1 year; secondinstance: 6 to 12 months; third instance: within
Complex cases:first instance: 1 to 3 years;second instance: 8 to 18 months; third instance:
10 to 18 months.
-There is no formal discovery system in Austria.
-Documents are subject to disclosure if a partyitself referred to the document in the course ofthe proceedings. The party is obliged to handover the document by substantive law, or thedocument is qualified as a "joint deed"between the parties.
-A court order to produce such documents is notenforceable. Failure to comply with a courtorder can only be considered by the court in itsevaluation of the case.
-In cases before District Courts where theamount in dispute is lower than EUR 5,000, orin matters where District Courts have exclusivejurisdiction (e.g. family matters, tenancy),representation by an attorney at law is notmandatory.
-In matters where District Courts have exclusivejurisdiction representation is not mandatory,however, if representation is wanted it must beby an attorney at law. In other cases, theperson can be represented by a non-lawyer.
It is close to impossible to provide a general and serious estimation of the costs of criminalproceedings. The complexity of the case is a major factor but also
-whether the investigation is closed or the case is actually tried;
-the location of the office of the public prosecution authority conducting the investigation/of the courtconducting the main proceedings;
-the number of suspects and other parties;
-the necessity of private expert opinions/expert testimony (e.g., forensic accountants);
-the necessity of translations and/or international judicial assistance;
-whether the case is in the public eye, etc.
The following approximate costs are based on the assumption that no expert opinions or experttestimonies are required:
For the party initiating and joining such proceedings as an injured party, the costs for the criminalinvestigation as well as the first instance proceedings may easily range from EUR 10,000 to EUR50,000 and from EUR 5,000 to 20,000 for potential appellate proceedings. There are no court fees.
For the party subject to criminal proceedings, the costs for the criminal investigation may easily rangefrom EUR 75,000 to EUR 250,000; for the first instance proceedings from EUR 50,000 to EUR150,000,and for appellate proceedings from EUR 30.000 to EUR 75,000. Suspects who are (fully) acquitted areeligible for a "contribution" to his/her legal fees; the maximum contribution is limited to EUR 5,000(irrespective of the actual costs) plus cash outlays (e.g. costs for copies of the file).
Yes. Certain evidence may not be gathered by(order of) the prosecution without prior courtapproval (e.g. banking information).
There are no statistics available regarding the duration of criminal proceedings concerning charges ofbusiness crime and/or corruption. In general, criminal investigations may take 1 to 3 years; firstinstance proceedings (calculated from the indictment to the first instance court's decision in writing)may take 6 to 12 months; appellate proceedings may take another 6 to 18 months. If the matter isremitted to the first instance, the entire case will have to be reheard by another judge/panel.
It has to be stressed that complex cases regarding charges of business crime and corruption mayeasily take 5 to 10 years.
Pro Bono System
Yes. There is legal aid for natural persons as well as legal entities who cannot afford the costs of legalproceedings.
Limited privilege: Austria provides only limitedlegal privilege regarding attorney work productsand client-attorney correspondence. Suchdocuments will only enjoy privilege if they arephysically located within the realm of the attorney.Consequently, if such document is found e.g. inthe offices of the client, it will not be protected byprofessional legal privilege.
Presentation by counsel is mandatory in (a) the criminal investigation for as long as the suspect is held ininvestigative custody; (b) in the main proceedings if the potential penalty exceeds three years ofimprisonment; and (c) in (most) appellate proceedings.
Not applicable in criminal proceedings.
Most cases of corruption and/or business crime are heard by a single judge or a panel consisting ofone professional judge and two lay judges. In general, only capital offenses and certain politicaloffenses will be heard by a jury.
If the request for a preliminary injunction isapplied for with the original complaint, no extracourt fees have to be paid. If the request for apreliminary injunction is filed outside the mainproceedings, the court fees are reduced to half infirst instance. Only in some exceptional cases,the full court fees of second and third instanceapply for appeals.
Assumptions: only the request for apreliminary injunction is filed, the courtrenders its decision without hearing theopponent: EUR 4,000 to 8,000 in first instance;second instance: one brief, no hearing: EUR6,000 to 10,000; third instance: one brief, nohearing: EUR 6,000 to 10,000.
Assumptions: apart from filing the request fora preliminary injunction, two comprehensivecounter statements are filed in reply to twostatements of opponent; witnesses are heard:total costs (including meetings withclient/witnesses) of first instance: EUR 30,000 to50,000; second instance: one brief, no hearing:EUR 20,000 to 45,000; third instance: one brief,no hearing: EUR 20,000 to 45,000.
Generally, a decision on a request for apreliminary injunction is rendered between 1 dayand 3 weeks.
Appellate proceedings: 1 to 3 months in secondinstance and 2 to 4 months in third instance.
-With the request for a preliminary injunction, theapplicant must provide available evidence, suchas documentary evidence and affidavits thatcan be immediately examined by the court.
-Foreign-language documents should bepresented with German translations.
Preliminary Injunction Proceedings
-Witnesses should be readily available, sothat they can appear on short notice beforethe court.
-The court may order the applicant to pay asecurity deposit. In practice, it is advisable tooffer a security deposit if the demonstrationof the claim faces challenges.
-No litigation costs will be awarded to theapplicant in preliminary injunctionproceedings.
-Costs incurred by a successful applicant inpreliminary injunction matters can only besought in the main proceedings.
Limited. Usually the International Bar Association Rules on the Taking of Evidence are applied whichprovide for a narrow document production.
The usual duration of arbitration proceedings is between 8 months and 2 years.
-The costs of arbitration to a large extentdepend on the arbitration agreement and theamount in dispute, the amount ofdocuments, number of witnesses andwhether expert opinions are required. Thecosts of arbitration also include the fees ofarbitrators and administrative charges.
-The arbitrators usually have large discretionregarding the award of costs. However, inpractice the award on costs often dependson the outcome of the case. The award oflegal fees is usually not determined byreference to a statutory tariff.
The procedural costs depend on whether a solearbitrator or an arbitral tribunal of three membersis appointed, the complexity of the case and theadministrative charges. The following twoestimates are based on the procedural costs ofthe Rules of Arbitration and Conciliation of theVienna International Arbitral Centre (VIAC).
Assumption: sole arbitrator appointed and anamount in dispute of EUR 1,000,000
Total costs: registration fee of EUR 1,500,administrative fees of EUR 13,000 and fees for asole arbitrator between EUR 26,500 and EUR37,100.
Assumption: sole arbitrator and an amount indispute of EUR 10,000,000
Procedural costs: registration fee of EUR 1,500;administrative fees of EUR 24,900 and fees for asole arbitrator between EUR 74,500 and EUR104,300.
In the case there is an arbitral tribunal with threearbitrators, it may be that the fees for thearbitrators triple.
Assumptions based on an amount in disputeof EUR 1,000,000: review of 100 pages ofdocuments; no challenge to the jurisdiction of thearbitral tribunal; two exchanges of submissions;review of correspondence with arbitral tribunal;assistance with the preparation of 3 witnesses;review of 3 written witness statements; noexperts; preparation of oral hearing andparticipation in an oral hearing; preparation andreview of one post hearing brief. Totalapproximate cost: EUR 120,000.
Assumptions based on an amount in disputeof EUR 10,000,000: review of 1000 pages ofdocuments; no challenge to the jurisdiction of thearbitral tribunal; two exchanges of submissions;review of correspondence with arbitral tribunal;assistance with the preparation of 5 witnesses;review of 5 written witness statements; documentproduction up to 500 pages; preparation andreview of expert opinions; preparation of oralhearing and participation in an oral hearing;preparation and review of one post hearing brief.Total approximate cost: EUR 250,000.
Enforcement of Foreign Judgments and Arbitral Awards
The court fees for declaration of enforceability(and execution) are the same as those forexecution of domestic judgments. They dependon the amount in dispute and whether the creditorseeks execution in movable and/or immovableassets. As a rule of thumb, for disputes aboveEUR 70,000, the court fees vary between 0.25%and 0.60% of the amount in dispute.
Application for recognition/enforcement:
Simple case: up to EUR 2,000
Complex case: up to EUR 10,000
It takes around 1 to 2 months until a decision onrecognition and enforcement is rendered in firstinstance. 3 to 6 months if the decision isappealed.
The duration of execution proceedings dependsmainly on whether the debtor has executableassets and whether execution measures areopposed by the debtor.
-Judgments that fall outside the scope of theapplication of the European Regulation mustbe submitted in original form or in copy issuedby the court that rendered the judgment.
-Furthermore, a certified translation of thejudgment must be submitted.
-For enforcement of awards under the New YorkConvention, the creditor must provide
the court with the authenticated original awardor a duly certified copy thereof and the originalof the arbitration agreement or a duly certifiedcopy thereof.
-Under the European Regulation No.1215/2012, the party that seeksrecognition/enforcement must submit a copyof the judgment which should beaccompanied by a Certificate of Authenticityissued by the court that rendered thejudgment.
-It is highly recommended to attach atranslation of the judgment in order to avoidany delays.
Filing ofInsolvency Claimsby Creditors
Court fees of EUR 23 for each filing.
Filing of insolvency claim:
Simple case: EUR 500 to 1,000.
Complex case: EUR 3,000 to 10,000.
1 year to several years; in very complex cases, a duration of more than 10 years is possible.
The commencement of insolvency proceedings is published by edict on the website of the AustrianMinistry of Justice under http://www.edikte.justiz.gv.at. In the edict, the period for filing of insolvencyclaims is set.