Austrian Public Policy and the Enforcement of Foreign Arbitral Awards

Abstract

the 1983 Amendment to the Austrian Civil Procedure Law1 had the purpose of facilitating the recognition and enforcement of foreign arbitral awards.2 Shortly before it became fully operative, the Austrian Supreme Court rendered a decision3 which appeared contrary to the purpose of the amendment. Some passages of the decision might be interpreted as not having been affected by the changes brought about by the 1983 Amendment. It is submitted, however, that at least after this reforming amendment, the restrictive provisions of the Supreme Court decision should no longer be applied to international arbitrations. Such an attitude would be in conformity with the prevailing spirit of liberalism in this matter, which has led, not only to the 1983 amendment in Austria, but also to changes in the relevant French4 and British5 legislation. The case before the Supreme Court concerned the request for the enforcement of two awards (Award No. 276 of 10 August 1981 and Award No. 9 of 11 January 1982) rendered in an appellate procedure in Amsterdam by the VAG (‘Vereniging Amsterdamse Graanhandel’ or ‘Amsterdam Graintraders Association’) in a dispute between a Rotterdam import and export firm and an Austrian company. The dispute arose out of contracts governed by Dutch law, which permits the Vernof conditions appearing in these contracts. The party which, pursuant to the awards, was obliged to pay DM 677,050 to the other party objected to enforcement of the awards in Austria. According to the objecting party, the contracts did not provide for the delivery of grain at a future date as they purported to do. The terms of the contracts were said to camouflage only imperfectly the fact that the contracts in reality envisaged a Differenzgeschaft , i.e. the mere payment of the difference between the prices quoted for grain …