VIAC Releases Vienna Investment Arbitration Rules

July 15, 2021

Key Takeaways

  • The Vienna Investment Arbitration Rules offer a comprehensive, standalone set of arbitral rules tailored specifically to investment arbitration.Modifying VIAC’s standard arbitration rules, the Vienna Investment Arbitration Rules combine a high degree of party autonomy and procedural flexibility with features accommodating the special demands of investment arbitration.
  • The Vienna Investment Arbitration Rules are specifically designed for the resolution of investment disputes involving States, State-controlled entities, and international organizations. However, they impose no requirements regarding the parties and the nature of the dispute.
  • A number of provisions address concerns by users of investment arbitration about duration and cost. For example, awards must be rendered within six months after the last hearing or the last authorized submission, and VIAC’s Board may remove arbitrators who fail to perform their duties. Registration and administrative fees, currently capped at €1,500 and €75,000, respectively, as well as the arbitrators’ fees are fixed on the basis of the amount in dispute.

The Vienna Investment Arbitration Rules, which are complemented by the Vienna Investment Mediation Rules, entered into force on July 1, 2021. Set forth below are some of the key features.

Scope of Application and Waiver of Immunity

Sovereign and private parties are free to apply the Vienna Investment Arbitration Rules to any type of arbitration, including, but not limited to, contractual and treaty arbitration, and for any type of dispute that has arisen or may arise between them.

By agreeing to arbitrate under the Vienna Investment Arbitration Rules, a party waives any right to immunity from jurisdiction that it may otherwise have in respect of the proceedings. However, in accordance with the customary international law rules on State immunity, a waiver of immunity from enforcement of the award would have to be expressed separately.

Summary Dismissal

Within 45 days of the tribunal’s constitution, either party may apply for summary dismissal of claims, counterclaims, and defenses that are manifestly:

  • Outside the tribunal’s jurisdiction;
  • Inadmissible; or
  • Without legal merit.

An application for summary dismissal must be decided within 60 days of the last written submission.

Disclosure of Third-Party Funding

Each party is required to disclose the existence of third-party funding and the identity of the funder. If the tribunal deems it necessary, it may also order disclosure of specific details of the funding arrangement, the funder’s interest in the outcome of the arbitration, and whether it has committed to assume adverse costs liability.

Third-party funding is broadly defined to include any funding or other material support dependent on the outcome of the proceedings or in return for any premium payment, as well as donations or grants. Funding from a party’s counsel is expressly excluded.

Joinder and Consolidation of Proceedings

Upon a party’s or third party’s request, the tribunal may join third parties to contractual arbitrations. In addition, a party may request that VIAC’s Board consolidate two or more VIAC-administered arbitrations if

  • The parties agree to the consolidation or the tribunals consist of the same arbitrator(s); and
  • The place of arbitration is the same.

Non-disputing Party Submissions

In conformity with the trend in investment arbitration of allowing written submissions of non-disputing parties, tribunals may authorize or invite submissions by third parties in arbitrations based on treaties or statutes. By contrast, in treaty arbitrations, non-disputing States and international organizations that are contracting parties to the treaty pursuant to which the dispute was submitted to arbitration have the right to make such submissions.

Streamlined Proceedings

  • Disputes are decided by panels of three arbitrators by default if the amount in dispute exceeds €10 million. Disputes involving lesser amounts are heard by a sole arbitrator unless VIAC’s Board decides otherwise.
  • For three-member panels, claimants are to nominate their arbitrator already in the Statement of Claim and respondents in their Answer, which must be submitted within 60 days of the receipt of the statement of claim. A sole arbitrator is to be nominated jointly by the parties within 30 days after receiving the VIAC Secretary-General’s request for nomination, or the VIAC Board will appoint.
  • Up until the submission of the Answer, parties may choose expedited arbitration. In expedited proceedings, the tribunal is to render its final award within six months after receiving the case file.
  • Objections to the tribunal’s jurisdiction must generally be raised no later than in the first pleading on the merits, after the tribunal’s constitution.
  • Arbitrator challenges, which are decided by the VIAC Board, must be made within 15 days from the date the party became aware of the grounds for challenge. The tribunal may continue the arbitration while the challenge is pending.
  • Tribunals are expressly authorized to conduct hearings in person or by other means, including online hearings, taking into account the parties’ views and the particular circumstances of the case.
  • Tribunals are to render their awards no later than six months after the last hearing or the latest authorized submission, subject to possible extension by VIAC’s Secretary General.
  • The VIAC Board may, on its own initiative or upon a party’s request, remove arbitrators who fail to perform their duties.

This update was authored by Partner Claudia Annacker, Chair of the working group responsible for the drafting of the new Vienna Investment Arbitration and Mediation Rules. For further information, please contact:

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