On 4 February 2023, Greece passed a new law governing international commercial arbitrations with their seat in Greece, i.e., Law 5016/2023 (“2023 Arbitration Lawˮ) (in English here (unofficial translation), in Greek here, and its Explanatory Report in Greek).
The 2023 Arbitration Law (1) replaces the previously applicable Law 2735/1999, which was based on the 1985 version of the UNCITRAL Model Law on International Commercial Arbitration (“Model Lawˮ); (2) it adopts almost all the 2006 amendments to the Model Law (“2006 Model Lawˮ); (3) it contains several linguistic tweaks, aiming to reflect the meaning of the respective Model Law provisions accurately; and (4) it introduces new provisions, not found in the Model Law, which are responsive to recent trends in international arbitration practice, such as multiparty arbitrations.
The key changes introduced by the 2023 Arbitration Law are discussed below.
Clear Presumption of Arbitrability
Article 3(4) of the 2023 Arbitration Law provides that any dispute may be submitted to arbitration unless prohibited by law, thus creating a clear presumption in favor of arbitrability.
Arbitration Agreement
Flexible Writing Requirement: Article 10 of the 2023 Arbitration Law provides that the arbitration agreement shall be evidenced in writing, but in an expansive sense, meaning that any electronic record, such as the exchange of emails, would be sufficient. This welcome change reflects the shift towards electronic transactions (which the COVID-19 pandemic further accelerated) and intends to uphold the validity of arbitration agreements (see commentary on Electronic Arbitration Agreements).
Substantive Validity of Arbitration Agreement: Article 11(1) of the 2023 Arbitration Law is a new conflict-of-law provision, which provides that the substantive validity of an arbitration agreement shall be assessed according to (1) the law chosen by the parties; or (2) the law of the seat of the arbitration; or (3) the law governing the substantial agreement of the parties (see commentary on the Laws Applicable to an International Arbitration). As noted in the Explanatory Report (p. 8), Article 11(1) encapsulates the in favorem validitatis principle, according to which an arbitration agreement should be constructed in a way that upholds its validity.
No Effect of Bankruptcy or Insolvency: Article 11(2) of the 2023 Arbitration Law expressly provides that bankruptcy or insolvency proceedings shall have no effect on the arbitration agreement unless otherwise provided by law. This provision also promotes the validity of arbitration agreements.
Constitution of Arbitral Tribunal
Multiparty Arbitrations: The appointment of arbitrators in multiparty arbitrations is now regulated for the first time in Article 16 of the 2023 Arbitration Law. It states that each side (claimants and respondents) shall jointly appoint one arbitrator. In case of failure to reach an agreement, the competent Greek court (specified in Article 9(1) of the 2023 Arbitration Law) may make the appointment. This provision aims to ensure that the arbitration process will not be obstructed when a joint decision on a co-arbitrator cannot be reached in cases involving multiple claimants and/or respondents, which is frequent in practice.
Court Intervention to Appoint Arbitrators as Last Resort: In the same vein, Article 17 of the 2023 Arbitration Law provides that if, for whatever reason, the arbitral tribunal has not been appointed within ninety days from the request for arbitration, then the court can assist with the appointment of the tribunal, unless the parties have agreed otherwise. The Explanatory Report (p. 9) notes that it was extensively deliberated whether to make this provision mandatory (meaning that parties cannot agree otherwise) or non-mandatory (meaning that parties can agree otherwise). Ultimately, it was agreed to make it non-mandatory, considering the overarching principle of the Model Law to minimize state court intervention in international arbitrations.
Challenges of Arbitrators: Article 19 of the 2023 Arbitration Law provides that the arbitral tribunal, excluding the challenged arbitrator, is competent to decide on a challenge of an arbitrator, after seeking the views of the challenged arbitrator. The Explanatory Report (pp. 9-10) aptly notes that the Greek regulators decided to divert from the (often criticized) position of the equivalent Article 13(2) of the 2006 Model Law, which implies that the decision on a challenge is made with the challenged arbitrator. The provision in the 2023 Arbitration Law ensures that the decision on a challenge is made without the involvement of the challenged arbitrator, thus aligning with the globally recognized principle of “nemo judex in causa sua”, which means that no one should be a judge in their own case.
Limited Liability of Arbitrators: Article 22 of the 2023 Arbitration Law specifies that an arbitrator is liable only for intentional misconduct or gross negligence. A similar provision is not found in the Model Law.
Joinder and Consolidation
Article 24 of the 2023 Arbitration Law is another novel provision not contained in the Model Law, which regulates the participation in the arbitration of third parties and the consolidation of arbitrations.
Joinder: Article 24(1) allows a person bound by the arbitration agreement to join an ongoing arbitration as a claimant, respondent, or a third-party intervener with a legal interest in the resolution of the dispute.
Consolidation: Article 24(2) empowers the arbitral tribunal to consolidate another arbitration between the parties pending before the same arbitrators or, with the parties’ express consent, pending before another tribunal.
Interim Measures
Article 25 of the 2023 Arbitration Law concerns the arbitral tribunal’s power to order interim measures (also commonly called provisional measures). According to the Explanatory Report (pp. 4-5, 12), Article 25 is one of the most innovative provisions of the new Greek regime, diverting from the respective provision of the 2006 Model law (Article 17), as explained below.
Wide Power: Article 25(1) entrusts wide discretion to the arbitral tribunal to order any interim measures it deems necessary related to the arbitration unless the parties have agreed otherwise.
Requirements: Article 25(2) specifies that interim measures may be ordered in cases of urgency or to avert imminent risk, provided that the right whose protection is sought is established prima facie. It also provides that among several interim measures, the least onerous measure must be preferred.
Preliminary Order: Article 25(3) provides that in extremely urgent circumstances, the arbitral tribunal may issue a preliminary order to regulate a situation until it issues its decision on the interim measure.
Binding Effect: Article 25(4) states that the decision of the tribunal on interim measures shall be binding, and parties shall comply with it immediately.
Article 25 of the 2023 Arbitration Law replaces the problematic provision of the previously applicable law (i.e., Article 17(2) of 2735/1999), which required the ratification of tribunal-ordered interim measures by the Greek state courts. This was a cumbersome and time-consuming process, which impeded the effectiveness of the interim measures and, ultimately, the efficient resolution of disputes via arbitration. The new provision in Article 25 of the 2023 Arbitration Law aims to address these concerns by streamlining the process and providing a more efficient mechanism for the enforcement of interim measures.
Enforceability: Article 25(5) then states that, upon a party’s application, the competent Greek court shall recognize and declare enforceable any interim measure ordered by the tribunal unless (1) the ordered interim measure is contrary to international public policy or (2) the court has already issued a similar interim measure following a party’s application.
Article 25(5) of the 2023 Arbitration Law adopts solely two grounds based on which a national court shall refuse recognition and enforcement of an interim measure and, thereby, diverts from the respective provision of the 2006 Model Law (Article 17 I), which recognizes more grounds for refusal (for instance, when a party has failed to comply with the tribunal’s decision on security concerning the interim measure).
Conduct of Arbitration
Confidentiality: Article 27(3) of the 2023 Arbitration Law provides that the parties or the tribunal will decide on the confidentiality of the arbitration. Hence, arbitration is not necessarily confidential.
Tribunal Secretary: Article 27(4) of the 2023 Arbitration Law allows for the appointment of a tribunal secretary. It states that the secretary’s duties, remuneration and other relevant matters shall be specified in an order of the tribunal formalizing the secretary’s appointment, following standard practice.
Parties’ Submissions: The 2023 Arbitration Law explicitly distinguishes between the request for arbitration (Article 29) and the statement of claim (Article 31), which again aligns with established practice.
Production of Documents: Article 35 empowers the arbitral tribunal to compel (either at the request of a party or on its own motion) the production of documents and other evidence in the parties’ possession or control that the tribunal considers likely to be material to the outcome of the arbitration, unless the parties have agreed otherwise.
This is a novel provision not found in the Model Law. The Explanatory Report (p. 16) highlights the importance of this power, as it allows the tribunal to have control over the merits of the dispute and to seek the truth in a specific matter.
The tribunal’s power under Article 35 of the 2023 Arbitration Law is distinct from its power to rule on the production of documents during the document production phase. In a document production phase (which is a common procedural step in arbitration taking place usually after the first round of submissions), the parties exchange requests for the production of documents relevant to the outcome of the dispute. If a party refuses to voluntarily produce the documents requested by the other party, the tribunal decides whether those documents should be produced. In contrast, Article 35 grants the tribunal broader power than during document production. It allows the tribunal to order document production at any stage of the arbitration, and even without a specific request from a party, thereby giving the tribunal more control over the process.
Setting Aside an Arbitral Award
The grounds for the annulment of an arbitral award outlined in Article 43 of the 2023 Arbitration Law largely resemble those in Article 34 of the Model Law but with some important additions.
New Annulment Ground: Article 43(2)(a)(ee) of the 2023 Arbitration Law introduces a new ground for annulling an arbitral award that is not found in the Model Law. This ground applies when there is a final and irrevocable decision by a competent criminal court regarding fraud or false testimony or the occurrence of passive bribery of an arbitrator or breach of duty (as envisaged in Article 544 paragraphs (6) and (10) of the Greek Code of Civil Procedure).
As observed in the Explanatory Report (p. 18), cases where this new ground would be upheld are expected to be rare in practice. Nevertheless, the intention behind this addition is to enhance the integrity of arbitral proceedings in Greece by safeguarding them against practices like fraud or bribery.
Public Policy Ground Explanation: Article 43(2)(b)(bb) of the 2023 Arbitration Law specifies that an award may be annulled if it conflicts with international public policy, irrespective of whether Greek or foreign law was applied in the case at hand. This provision takes into account an opposing decision of the Supreme Court (SC 2111/2017) that has been criticized (Explanatory Note, p. 18). It provides clarity on the annulment of awards based on public policy considerations.
Annulment Time Limit: Article 43(3) of the 2023 Arbitration Law specifies that an action to set aside an arbitral award shall be lodged within three months from the date of formal service of the award on the party making the application. This provision takes into account another criticized decision of the Supreme Court (SC 5/2000) (Explanatory Note, p. 18), which provided that the start of the set-aside deadline was the date the party informally obtained a copy of the decision from the relevant court.
Not Relying on Own Act/Omission: Article 44(4) of the 2023 Arbitration Law introduces a novel provision (not found in the Model Law), which crystalizes the long-standing Greek jurisprudence (since 1969) that a party may not rely upon its own actions or omissions to have an award set aside (Explanatory Note, p. 18).
Remittance to Tribunal: Article 44(5) of the 2023 Arbitration Law (adopting Article 34(4) of the 2006 Model Law) empowers the court to remit the dispute to the arbitral tribunal instead of setting aside an award when there is a defect that can be rectified. This pro-arbitration provision enables the efficient resolution of a dispute, while saving time and costs.
Res Judicata of Arbitral Awards
Article 44(2) of the 2023 Arbitration Law provides that an arbitral award shall be res judicata from its issuance, meaning that the matter in dispute cannot be relitigated. Furthermore, Article 44(2) specifies that the res judicata effect extends to the tribunal’s decision on preliminary matters, such as the validity of an arbitration agreement. This innovative provision demonstrates the trust of Greek regulators in the arbitral process.
Greek Arbitral Institutions
Article 46 of the 2023 Arbitration Law establishes the minimum requirements for the establishment of arbitral institutions in Greece. For example, these institutions must have the corporate form of a société anonyme with a fully paid, minimum share capital of EUR 100,000 or be a public legal entity. They must also provide rules for arbitrators and maintain a roster of recognized arbitrators. This new provision, not found in the Model Law, aims to ensure the credibility of arbitral institutions operating in Greece.
Currently, arbitral institutions operating in Greece include the Athens Mediation & Arbitration Organization (EODID) and the Athens Chamber of Commerce and Industry (ACCI) Arbitration and Mediation Center.
Conclusion
Greece’s 2023 Arbitration Law (Law 5016/2023) is a thorough and innovative piece of legislation. It adopts most of the 2006 amendments of the Model Law and introduces additional provisions (not found in the Model Law) that reflect the best practices in international arbitration, including those related to multiparty arbitrations. This new legislation establishes a modern and familiar regulatory framework that has the potential to position Greece as an attractive seat for international arbitrations.
