I. Introduction
The recent law 5016/2023 marks a new era in the Greek reality regarding international commercial arbitration, as it aims not only to incorporate newer trends of international theory and practice concerning arbitration but also to make the Greek forum an attractive center for more international arbitrations.
The new law, due to extensive changes, repealed the previous law 2735/1999, while it incorporated into domestic law the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration of 1986 (taking into account many of its amendments that took place in 2006); in some cases it even goes beyond the UNCITRAL Model Law.
The innovations brought by the new law are significant, and there have already been extensive analyses in theory regarding the positive aspects of the regulation, accompanied by critical reviews at some points. To begin with, the main focus of law 5016/2023 is the private autonomy of the parties, which seems to be the principle underlying all the provisions of the new law. Some of the key provisions are related to the arbitrability of disputes, the validity of the arbitration agreement, the possibility of taking interim measures by the arbitral tribunal, and the action for setting aside arbitral awards.
II. Important advances of law 5016/2023
- Applicability of the law for International Commercial Arbitration by agreement of the parties [Article 3 (2)]
In the previous legal framework of Law 2735/1999 [art. 1 (2)], there was explicit provision regarding the applicability of a dispute to the provisions governing International Commercial Arbitration even in cases where there were no international elements (from a territorial scope), if the country of arbitration had been agreed to differ from the country where the parties were situated. However, such an option was challenged by a part of theory and wasn’t universally accepted. Thus, the new simple provision of law 5016/2023, upon which the parties can subject a dispute to international commercial arbitration solely by their agreement [Article 3 (2)(c)], without any further requirements, is considered positive and contributes to legal certainty.
- Arbitrability [Article 3 (4)]
One of the interesting points of the new law is the concept of the (rebuttable) presumption of arbitrability, i.e., the explicit provision of the law that establishes the rule of arbitrability of the disputes, unless otherwise expressly provided by law. Nevertheless, an implementation issue has already been raised, as there is usually no explicit opposition of the law to the submission of a dispute to arbitration (the only explicit reference being in Article 867 of the Greek Code of Civil Procedure regarding Labor Disputes). In this respect, a problem may arise when, even though there is no such explicit prohibition by law concerning a potential dispute, however the parties do not have the power of disposal, regarding the subjection of their dispute under arbitration. For example, there is no explicit arbitrability prohibition for disputes concerning parents and children relations (par. 2 art. 592 of the Greek Code of Civil Procedure), but the involved parties have no power of disposal in such disputes. In such an event, the validity of the arbitration agreement could be affected. Therefore, it remains to be seen how this provision will be interpreted and applied by case law.
- Conflict-of-law rule in favor of the substantive validity of the arbitration agreement [Article 11 (1)]
An important difference of the new law, compared to the previous legislative regime, is the clear effort of the Greek legislator to preserve the validity of the arbitration agreement (favorem validitatis). Thus, Article 11 (1) provides three different grounds upon which the validity of an arbitration clause can be assessed: the arbitration agreement is valid according to the law (i) chosen by the parties, or (ii) in force in the place of arbitration, or (iii) governing the substantive agreement between the parties. It is worth noting that in theory some skeptical views highlight the fact that under this provision excessive emphasis seems to be placed on preserving the arbitration clause, which may be problematic especially when the clause cannot ultimately be preserved by the law chosen by the parties. Apart from that, the relevant provision may arguably be questionable also under the spectrum of art. 5 (1) (a) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958)[1], taking into consideration that enforcement may be refused if the arbitration agreement is not valid under the law to which the parties have subjected it or under the law of the country where the award was made.
Furthermore, Article 11(2) of law 5016/2023 establishes the rule that bankruptcy and other insolvency proceedings do not affect the arbitration agreement, unless otherwise provided by law, which is a rule of great practical importance.
- Power of the arbitral tribunal to issue interim measures (Article 25)
In contrast to the legislative framework governing domestic arbitration (Article 867 et seq. of the Greek Code of Civil Procedure), according to Article 25 (1) the arbitral tribunal is now granted the authority to issue interim measures and, in exceptional cases, to also issue preliminary orders [Article 25 (3)], unless otherwise agreed by the parties [Article 25 (1)].
The requirement for granting interim measures by the arbitral tribunal (similarly to the interim measures of the Greek Code of Civil Procedure) is the occurrence of urgent circumstances or the need to prevent imminent danger, as well as the presumption that a right to be secured exists [Article 25(2)]. At this stage, the arbitral tribunal is not bound by the parties’ requests but can order the appropriate measure at its sole discretion; however, the imposed measures shall be proportional (i.e the least burdensome among a possible variety of measures – explicit implementation of the principle of proportionality).
Notably, the new law introduces an innovative provision [art. 25 (6)] for reasonable compensation, should an interim measure be issued unjustifiably or in violation of good faith.
The flexibility of the provision is also crucial, since the arbitral tribunal may, upon request by a party, order any interim measures it deems necessary in connection with the subject-matter of the dispute or the arbitral proceedings, whether by way of an award or in a different proper form [art. 25 (1)], i.e., even by e-mail, telephone order or written order. It is worth noting that civil courts are explicitly provided with the power to assist in enforcing, recognizing and executing interim measures within the Geek territory, unless they are contrary to international public policy [art. 25 (5)].
- New grounds for setting aside/annulling the arbitral award (Article 43)
Certain crucial changes are observed in Article 43 of the new law compared to the previous regime: the starting point of the time-limit for filing an action for setting aside the arbitral award is the service date of the arbitral award (paragraph 3) and not its informal receipt by the parties. There are skeptical views regarding this provision as it potentially complicates arbitration proceedings, introducing into a primarily informal and expedited procedural law the provisions of official service, along with the problems that arise from the latter.
Regarding the grounds for setting aside an arbitral award, the right of lodging an action also includes the event when the arbitral tribunal has declined its jurisdiction notwithstanding a valid arbitration agreement. This provision has been criticised, as it is extremely unlikely in practice for a court to reach a contradictory judgment on the jurisdiction of an arbitral tribunal when the latter has previously dismissed the establishment of said jurisdiction, given that arbitral tribunals usually determine their own jurisdiction favorably.
Furthermore, the new law provides as grounds for setting aside the arbitral award [Art. 43 paragraph 1 (ae)] the grounds for revision (of court judgments) stipulated in numbers 6 and 10 of Article 544 of the Greek Code of Civil Procedure, namely false depositions (of experts, witnesses, and litigants) and bribery of arbitrators (provided that these offenses are proven by irrevocable criminal courts’ judgments).
We need to point out that there have also been heated discussions regarding this provision, in two directions. On one hand, some practitioners argue that through these specific grounds it is somehow as if a substantive review (on the merits) of the arbitral award has been implicitly imposed. On the other hand, there are concerns about the significant delay and legal uncertainty that this provision may cause to arbitration proceedings, especially taking into account that several such cases in the domestic jurisdiction tend to be brought before criminal courts by the parties.
Further, provisions of Article 43, paragraphs 5 and 6 embrace the principle of procedural economy. The court may, instead of setting an arbitral award aside in whole or in part on the grounds of a defect that is identified in the court’s decision and can be rectified, remit the dispute to the arbitral tribunal which has issued the award, directing that the relevant defect be rectified and setting out a time-limit of no more that 90 days for a new arbitral award to be made (paragraph 5). The annulment of the arbitral award results to the revival of the arbitration agreement regulating the adjudicated dispute, unless otherwise agreed by the parties (paragraph 6). Both the afore-mentioned provisions operate in favor of arbitration. The revival of the arbitration agreement, although widely accepted at the international level, was deemed necessary to be explicit due to conflicting domestic case law, generated mainly by the Supreme Court of Greece (Areios Pagos).
Finally, paragraph 7 of article 43 provides for the power of the parties to waive at any time, by express and specific written agreement, their right to seek to set aside an arbitral award, while retaining the right to raise these grounds during the stage of enforcement proceedings.
III. Conclusion
Apart from the brief foregoing analysis, we should highlight that the new statutory framework for international commercial arbitration is unequivocally considered successful, and it has, for the most part, been warmly welcomed by the legal world. In general terms, it is expected to work positively towards both the promotion of arbitral dispute resolution within the country, as well as establishing Greece as a reliable forum for arbitral dispute resolution internationally.
[1] Which stipulates that: “1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;”
