A person`s subjective ability to effectively enter into a binding arbitration agreement (and participate in arbitration) is regularly referred to as subjective simplicity. Whether a person has subjective abilities arises from the law applicable to that person. Under Austrian law, the Law on Private International Law (IPRG) generally determines the law applicable to a natural person on the basis of his or her nationality. The seat is decisive for legal persons. However, for EU companies, the creation theory developed by the European Court of Justice (ECJ) is crucial for the place of establishment. It is therefore recommended to clearly identify the contracting parties, for example by referring to the registration numbers of the companies. In the absence of the subjective capacity of the person entering into the arbitration agreement, the award may be challenged in the Austrian Supreme Court (see below VII). This decision of the Court of Cassation deserves special attention, as it strongly reminds us that arbitration clauses and jurisdictional clauses – even if they have common characteristics, since they depart from ordinary rules of jurisdiction – are not governed by the same legislation. If the parties agree on arbitration clauses, the potential dispute will be removed from the jurisdiction of the State Court. This may be seen as a contradiction with constitutional rights for his case to be heard by a state court – as a result, most legal systems have particular formal requirements when entering into an arbitration agreement, particularly the requirements that the arbitration agreement be concluded “in writing”. Arbitration clauses and jurisdiction clauses are the two rules for dispute resolution. The arbitration agreement must be contained either in a written document signed by the parties (including any appropriate form of electronic signature), or in an exchange of letters, faxes, emails or other forms of communication between the parties that provide evidence of the existence of the agreement.
In addition, a contract that meets the above-mentioned formal requirements, a document containing an arbitration agreement, is also an arbitration agreement, provided the reference is such that it makes the arbitration agreement an integral part of the contract. It should be noted that when a party (who may attempt to object because of a defect) addresses the substantive issues at issue without increasing the lack of form, this defect of the arbitration agreement is healed (or rather revoked) in the arbitration proceedings. This waiver occurs, unless an objection is raised at the latest in the event that the party argues on the merits of the dispute. The JAMS ADR blog serves to involve our clients, the legal world and the public in a debate on the alternative settlement of disputes. As leaders in mediation, arbitration and more, we strive to remain at the forefront of legal developments, trends and news in the legal areas that relate to ADR. However, the Court of Cassation is quite demanding when considering whether judges have properly assessed and characterized the manifestly unoperable or inoperable nature of an arbitration agreement. It should be remembered that, in accordance with Article 48 of the French Code of Civil Procedure and firm jurisprudence, the jurisdiction clause, which must have been very clearly specified in the contractual document signed by the defendant, must necessarily be taken into account and accepted by the defendant at the time of the drafting of the contract4.