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#TodayInDispute provides you with the latest updates in the field of dispute resolution and can also be received via LinkedIn and Twitter.

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26.02.2020 #TodayInDispute: "Challenging Arbitrators” Under Austrian arbitration law, in case of doubt regarding an arbitrator’s independence and impartiality, a party must challenge the arbitrator already in the course of the pending arbitration proceedings. If the parties only become aware of a potential bias of an arbitrator after an award has been rendered, the Austrian Supreme Court has previously held that parties can only rely on an arbitrator’s bias as ground for annulment of an award in “blatant” cases. In a recent decision, the Supreme Court deviated from this line of jurisprudence and held that the impartiality and independence of an arbitral tribunal is of utmost importance given the restrictive ground for annulment of an arbitral award. Therefore, parties can challenge an award based on an arbitrator’s bias also in “non-blatant” cases. However, the challenging party still has to prove that it was unable to initiate a challenge procedure before the award has been rendered. Read the full decision (in German) here.

16.01.2020 #TodayInDispute: Austrian Supreme Court denies enforcement of foreign arbitral award due to violation of the ordre public: In the arbitral proceedings, which had taken place under the Rules of the Belarusian Chamber of Commerce and Industry, the tribunal was at first unable to find consent on an award and the presiding arbitrator agreed with on further deliberations at a later time with his co-arbitrators. The presiding arbitrator then drafted and signed the award (together with one co-arbitrator) and requested the third arbitrator to sign too. The Supreme Court explained that it was not per se improper for two arbitrators to deliberate on a dispute amongst themselves, as long as these deliberations to not reach an intensity which would de facto exclude the third arbitrator. The third arbitrator must be permitted to express his opinion on the dispute and be able to try to influence its outcome. His exclusion from deliberations also cannot be remedied by the majority decision of the two other arbitrators. Read the full decision here.

13.01.2020 #TodayInDispute: “Toll Trolls” The Respondent, a company seated in Germany, sold digital tolls for the use of Austrian highways on a website. Once a customer had placed an order on Respondent’s website, Respondent then bought the digital toll on for a lower price on the website of Claimant, an Austrian state-owned company, who is legally entitled to claim tolls for Austrian roads. However, Respondent’s customers regularly confused Respondent with Claimant and started complaining to Claimant that they had paid too much for the toll and were denied a refund. The Austrian Supreme Court inter alia decided that Respondent by denying its customers a refund, Respondent violated the Act on remotely concluded transactions between entrepreneurs and consumers (FAGG). Thereby, Respondent also violated the Austrian Unfair Competition Act (UWG) vis-á-vis Claimant. Respondent further infringed Claimant’s distinctive trademarks by using them on its website. Read the full decision here.

18.12.2019 #TodayInDispute: In a recent decision, the Austrian Supreme Court considered the extent of waivers contained in terms and conditions of insurance contracts. In the case at hand, the terms included a waiver of the insurance company’s right to rely on gross negligence relating to water damage. Section 61 of the Austrian Insurance Contract Act excludes an insurer’s liability for losses resulting from intent or gross negligence. It also allows for a complete exclusion of liability for losses caused by the insured party’s failure to take precautionary measures as per the insurance contract (Section 6). In the present case, the terms and conditions required the insured to turn off the main water supply when vacating the premises for a certain time. The insured failed to do so and organised irregular visits of a neighbour instead. The Supreme Court had to decide whether the waiver extended to the failure to take the required precautionary measures. As a general rules, ambiguities in standardised terms must be construed against the drafting party. However, the court found that the waiver in the terms was unambiguous and held that it did not include the precautionary obligations of the insured as set out in the terms and conditions. Click here for the judgment (in German).

16.12.2019 #TodayInDispute: The Austrian Supreme Court strengthens general protection against termination for employees, who are over 50 years of age at the time of hiring. Pursuant to Austrian labour law and previous judgements of the Austrian Supreme Court, in case of a challenge of termination for being socially unfair by those employees, the individual employee’s age does not have to be taken into account when assessing the difficulties of reintegrating into the labour market. As the chances of reintegration tend to be lower for older employees, this should encourage employers to hire older employees. However, due to a recent Austrian Supreme Court ruling, the age of the employee must not be disregarded and, thus, the employee’s chances on the labour market have to be assessed based on the actual age of the employee. As the risk of a successful challenge of termination thereby increases substantially, employers are facing a higher risk when hiring employees over 50 years old. The ruling (in German) can be found here.

04.12.2019 #TodayInDispute: As of 1 January 2020, Austrian employees, employed in businesses with more than five employees, are entitled to nursing leave or nursing part-time of up to two weeks, in case the general requirements for such a leave or part-time are fulfilled (e.g. service period of at least three months, close relative to be taken care, minimum care level 3 (care level 1 with regard to minors or relatives with dementia), etc). Such a leave or part-time can be taken unilaterally by the employee without the consent of the employer. Moreover, the nursing leave or nursing part-time can be extended for another two weeks period, if the employer and the employee do not agree on a further nursing leave or nursing part-time. Employees, who want to make use of this entitlement have to notify the employer about the intended commencement date as soon as they know it. The employee has to prove the need for care and has to substantiate the status as close relative of the person in need within one week upon the employer’s request. The new law can be found here (in German).

29.11.2019 #TodayInDispute: The ECJ recently declared (our respective #TodayInDispute can be found here: that the sanctions provided by the Austrian Anti Wage and Social Dumping Act (Lohn- und Sozialdumping-Bekämpfungsgesetz // LSD-BG) for not obtaining administrative approvals and not keeping wage documents available in Austria, infringe the EU freedom of services. In reaction to this ECJ judgment, the Austrian Supreme Administrative Court now ruled that for such infringements only one administrative fine up to the maximum amount provided by law can be imposed without taking into account any minimum amount. This also applies if several employees are involved. Therefrom results that administrative fines must not be imposed cumulatively for each employee anymore in these cases. Furthermore, the imposition of a compensatory imprisonment is also not permitted anymore in case of such infringements. However, the Supreme Administrative Court stated that imposing a procedural contribution of additional 20% of the fine does not violate European Union law and is therefore still permissible. The ruling can be found here (in German).

14.10.2019 #TodayInDispute: In a recent Austrian Supreme Court case, the claimant had concluded an accident insurance policy with the respondent. The insurance contract included an " Immediate Accident Benefit - Clause" which stated that after an accident-related hospital stay of at least 5 days, 3% of the insured amount will be paid as an advance on any disability benefits. If no permanent disability results from the accident, the amount does not have to be repaid. The Claimant had an accident with a string trimmer, suffered from a consequential sepsis and spent 5 days in the hospital. Irrespective of the accident, the claimant also suffered from diabetes, which had a deteriorating effect on the sepsis. Based on the insurance contract, the claimant requested payment of 3% of the insured amount, to which the respondent objected. The Supreme Court held that based on the wording and purpose of the contract, entitlement to benefits only required a hospital stay of at least five days. The policyholder is also entitled to the benefit if he does not suffer permanent invalidity resulting from the accident. Further, the payable amount is not reduced if the treated disease is partly a result of a pre-existing ailment. Read the decision here.

20.09.2019 #TodayInDispute: ECJ declares certain provisions of LSD-BG unlawful. The sanctions provided by Austrian anti wage and social dumping law (Lohn- und Sozialdumping-Bekämpfungsgesetz // LSD-BG) for not obtaining administrative approvals and keeping wage documents available in Austria infringe the EU freedom of services according to a recent ECJ judgement. In the case on hand the fines imposed on the managing directors of the Croatian and Austrian companies involved amounted to several million Euros or compensatory imprisonments of several years. The ECJ stated that administrative fines, which (1) provide for a minimum amount, (2) could be imposed cumulatively for each posted or hired out worker, (3) provide for a compensatory imprisonment and (4) provide for a cost risk in case of an appeal of additional 20% of the fine, violate European Union law. The judgment (in German) can be found here.

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