ENFORCEMENT OF DISPUTE BOARD DECISIONS ENFORCEMENT OF DISPUTE BOARD DECISIONS IN CENTRAL AND EASTERN EUROPEIN CENTRAL AND EASTERN EUROPE

Dr Erhard BöhmDr Erhard BöhmBaier BöhmBaier Böhm

Attorneys at LawAttorneys at Law, , Vienna Vienna

DRBF 6th Annual International DRBF 6th Annual International Conference, BudapestConference, Budapest

INTRODUCTIONINTRODUCTION

Dispute Board Rules of the ICCDispute Board Rules of the ICC

Dispute Board issues Determinations Dispute Board issues Determinations

Recommendations (DRB)Recommendations (DRB) Decisions (DAB, CDB maybe)Decisions (DAB, CDB maybe)

Determinations are not arbitral awardsDeterminations are not arbitral awards

Parties agree to be contractually bound under Parties agree to be contractually bound under

certain conditions certain conditions

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DETERMINATION – BINDING EFFECTDETERMINATION – BINDING EFFECT

Recommendation:Recommendation:

binding if no notice of dissatisfaction within 30 binding if no notice of dissatisfaction within 30 days from receipt days from receipt

Decision:Decision:

Immediately binding; remains binding despite Immediately binding; remains binding despite notice of dissatisfaction within 30 days from receiptnotice of dissatisfaction within 30 days from receipt

Parties agree not to contest Determination as farParties agree not to contest Determination as far as they can validly do so – what does this mean?as they can validly do so – what does this mean?

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DETERMINATION – EXPERT OPINION?DETERMINATION – EXPERT OPINION?

Challenge of Expert Opinions?Challenge of Expert Opinions?

Violation of „Violation of „bonos moresbonos mores““

Gross inequityGross inequity

Dispute Board exceeds limits imposed by theDispute Board exceeds limits imposed by the contractcontract

„ „Fair trialFair trial“ “

Successful challenge: parties are not contractuallySuccessful challenge: parties are not contractually boundbound

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HOW TO ENFORCE BINDING DETERMINATIONHOW TO ENFORCE BINDING DETERMINATION

No direct enforcement No direct enforcement

Enforcement „through contract“Enforcement „through contract“

Enforcement through arbitration/courts Enforcement through arbitration/courts

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ENFORCEMENT „THROUGH CONTRACT“ENFORCEMENT „THROUGH CONTRACT“

Non-compliance is breach of contractNon-compliance is breach of contract

Non-compliance may trigger contractual Non-compliance may trigger contractual sanctions,sanctions, e.g. e.g.

Retention rightRetention right Right to suspend performanceRight to suspend performance PenaltyPenalty Right to termination Right to termination DamagesDamages

Interim/conservatory measures before courts Interim/conservatory measures before courts

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ENFORCEMENT THROUGH ARBITRATIONENFORCEMENT THROUGH ARBITRATION

Failure to comply may be referred to arbitration, if Failure to comply may be referred to arbitration, if agreed agreed

Arbitration -v- CourtsArbitration -v- Courts

Who wants to/has to go to arbitration?Who wants to/has to go to arbitration? Recommendation:Recommendation: Notice of dissatisfaction of losing party Notice of dissatisfaction of losing party Recommendation not bindingRecommendation not binding Winner must sueWinner must sue Decision:Decision: immediately binding immediately binding Loser must sue to „get rid“ of Determination Loser must sue to „get rid“ of Determination

Time Limit for commencement of arbitration Time Limit for commencement of arbitration

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DRB PROCEDURE – „CONDITION PRECEDENT“ TO DRB PROCEDURE – „CONDITION PRECEDENT“ TO

ARBITRATIONARBITRATION

Statement of Case Statement of Case

Determination within 90 days from Determination within 90 days from commencement (unless extended)commencement (unless extended)

It must be a „Determination“ It must be a „Determination“ FindingsFindingsReasonsReasonsDateDateSignatureSignature

Condition Precedent not met:Condition Precedent not met: if arbitral tribunal has competence to rule on its ownif arbitral tribunal has competence to rule on its own jurisdiction, request for arbitration may be declared jurisdiction, request for arbitration may be declared inadmissible (premature) inadmissible (premature)

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ARBITRATION –v- DISPUTE BOARDARBITRATION –v- DISPUTE BOARD

Determinations admissible in arbitral or judicial Determinations admissible in arbitral or judicial proceedings between the same partiesproceedings between the same parties

Will arbitrators confirm Determination?Will arbitrators confirm Determination? Arbitration is not an appeals procedureArbitration is not an appeals procedure Arbitral proceedings are independentArbitral proceedings are independent Dispute Board‘s „job well done“ Dispute Board‘s „job well done“ DB has first hand knowledge of site conditions; DB has first hand knowledge of site conditions; immediate contact to people when it mattersimmediate contact to people when it matters Arbitrators are much more „removed“ from the actionArbitrators are much more „removed“ from the action Evidence „underneath concrete“ Evidence „underneath concrete“

BUT:BUT:

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ARBITRATION – DIFFERENT FRAMEWORKARBITRATION – DIFFERENT FRAMEWORK

Arbitrators must render an award that isArbitrators must render an award that is

•Not subject to challenge in courtNot subject to challenge in court•EnforceableEnforceable

Impact of national law Impact of national law

• Law -v- EquityLaw -v- Equity• Mandatory rules applicable despite choice of Mandatory rules applicable despite choice of foreign lawforeign law• Ordre publicOrdre public

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Dr Erhard BöhmDr Erhard BöhmBAIER BÖHMBAIER BÖHM ATTORNEYS AT LAWATTORNEYS AT LAWKärntner Ring 12Kärntner Ring 12A-1010 ViennaA-1010 ViennaAustriaAustriaTel: + 43 1 515 50 0Tel: + 43 1 515 50 0Fax: + 43 1 515 50 50Fax: + 43 1 515 50 50email: e.boehm@baierboehm.comemail: e.boehm@baierboehm.com