Arbitration in the former Czechoslovakia (1918–1992) was first regulated by the Austro-Hungarian monarchy in 1911 (Act No.I / 1911 Civil Dispute Code, which remained valid until 1950). The advantage of the 1911 Civil Dispute Code was its broad scope; it enabled parties to refer property and employment disputes to arbitration. Subsequently, at the end of World War II and with the advent of socialism, a new regulation emerged in the form of Civil Code No. 141/1950 Coll., which contained detailed provisions on arbitration in Sections 648–654.

From 1963 to 1994, parties were not permitted to have recourse to arbitration for domestic disputes. The only disputes that could be resolved by way of arbitration were international disputes involving entities incorporated in a Member State of the Council for Mutual Economic Assistance (“COMECON”). The competent court for such disputes was the Permanent Court of Arbitration attached to the Czechoslovak Chamber of Commerce.

When the Slovak Republic was born on 1 January 1993, Slovakia began intense work on drafting a new arbitration act. At that time, arbitral proceedings were still regulated by Act No. 98/1963 on arbitration proceedings in international economic relations and the enforcement of arbitral awards, which prohibited domestic arbitration. In 1996 the new Act No. 218/1996 Coll. on arbitration reintroduced the possibility for parties to resolve domestic disputes by way of arbitration. Contrary to the legislators’ expectations, the reintroduction of arbitration as a means of resolving domestic disputes did not give rise to a significant increase in the use of arbitration as a dispute resolution tool. Act No. 218/1996 was subsequently replaced by Act No. 244/2002 Coll. on arbitration, which entered into force on 1 July 2002, and was amended as of 1 January 2006 by Act No. 521/2005 Coll. (hereinafter referred to as “the Arbitration Act”). The Arbitration Act is based on the UNCITRAL Model Law on International Commercial Arbitration (1985).

Arbitration proceedings in Slovakia can be conducted under the auspices of an institution, which administers the arbitration (e.g. transmits correspondence between the parties and the tribunal, appoints arbitrators in cases where the parties are unable to agree upon such appointments, fixes arbitrators’ fees, etc.) either on behalf of the parties or on an ad hoc basis (i.e. the parties administer the arbitration proceedings themselves).

Slovakia has various arbitration institutions capable of administering arbitration proceedings. The oldest arbitration institution is the Arbitration Institution attached to the Slovak Chamber of Commerce and Industry, established by Act No. 9/1992. Between 1997 and 1 August 2008, a total of 54 arbitration institutions were established in Slovakia.

Prior to the entry into force of the Arbitration Act in 2002, the principle specialised institutions were:

• the Arbitration Institution attached to the Slovak Chamber of Commerce and Industry;
• the Arbitration Institution attached to the Commodities Exchange; and
• the Arbitration Institution attached to the Bratislava Securities Exchange.

On average, these arbitration institutions handled less than 50 disputes per year.

After the entry into force of the Arbitration Act, several new institutions were founded, the first and foremost of which is the European Arbitration Tribunal of the Arbitration and Mediation Centre/Centre de médiation et d´arbitrage (ACM) in Košice. As a result of the success of these new institutions, arbitration is gaining momentum as a dispute resolution mechanism in Slovakia. The number of cases resolved by arbitration was 20 times higher in 2008 than it was in 2005.

Another well-known arbitration institution is the Arbitration Institution attached to the Slovak Banking Association (established in 2003). This Institution has two chambers: one dedicated to payment transactions, and the other dedicated to resolving other commercial or civil disputes. Whilst the first chamber has handled relatively few cases since its establishment, the second chamber handles more than 1,000 cases yearly. The duration of such proceedings is usually about three months.

Scope of application
The Arbitration Act governs the resolution of ‘proprietary’ disputes arising out of either local, international commercial or civil relationships, when the place of arbitration is in Slovakia. The term ‘proprietary dispute’ means any dispute the subject matter of which is capable of evaluation in monetary terms.

General principles
The provisions of the Arbitration Act, and those of the Slovakian Civil Procedure Code (Act No. 99/1963 Coll.), reflect the fundamental principles typically found in arbitration legislation across the world (e.g. the principle of the equality of the parties, the principle of party autonomy, and the principle of non-intervention by local courts).

Formal requirements
The arbitration agreement – i.e. the agreement between the parties that some or all disputes that have arisen or will arise in the context of a given contractual or other legal relationship will be decided by way of arbitration – may be contained in a stand-alone agreement or in an arbitration clause in a contract. To be valid, it must be in writing. If the agreement was not originally made in writing, the parties can remedy the situation by drawing up before the start of the arbitration proceedings a written statement recording the agreement in the form of minutes signed in the presence of one of the arbitrators who will hear the dispute.

A validly executed arbitration agreement is binding upon its signatories. It may be replaced or supplemented only in accordance with its provisions or by agreement between the parties. Any modification of the arbitration agreement must be made in writing. Unless otherwise provided in the agreement, the arbitration agreement is also binding upon the legal representatives and successors of the parties.

The parties are free to choose the law that will govern the arbitration agreement, and can choose a different law from that which governs the contract in which the arbitration agreement is situated.

In keeping with the principle of separability, an arbitration clause which is part of an otherwise invalid contract is only invalid if its validity is expressly pre-conditioned on the validity of the underlying contract. Unless the parties agree otherwise, withdrawal from an agreement containing an arbitration clause does not affect the validity or binding nature of the arbitration clause.

Arbitrability
According to Section 1 (2) (3) of the Arbitration Act, arbitration can only be used to resolve disputes that are capable of settlement. Parties cannot have resort to arbitration in the case of:

• disputes regarding the creation, transfer or extinction of title, and other rights, in real property;
• disputes regarding personal status (e.g. marital or parental status);
• disputes relating to the enforcement of court decisions; or
• disputes arising out of bankruptcy proceedings.

The constitution of the arbitral tribunal
The arbitration tribunal must be composed of one, three or another uneven number of arbitrators. If the parties fail to agree upon the number of arbitrators, Section 7 (3) of the Arbitration Act prescribes that three arbitrators shall be appointed.

The parties may either agree between themselves upon the identity of the arbitrator(s) or request a court or arbitration institution to appoint the arbitrator(s) (Section 8 (1) of the Arbitration Act). If the parties have agreed to appoint three arbitrators but cannot agree upon the identity of such arbitrators, each party shall appoint one arbitrator and the two party-appointed arbitrators shall appoint the third presiding arbitrator. If either party fails to appoint an arbitrator, such arbitrator shall be appointed by the relevant appointing authority or court upon the request of either party. If the parties have agreed to appoint a sole arbitrator but cannot agree upon the identity of such arbitrator, the arbitrator will be appointed by the relevant appointing authority or court upon the request of one of the parties (Section 8 (2) of the Arbitration Act).

Anyone over 18 years of age who has a clean criminal record and full legal capacity can act as arbitrator. Slovak citizenship is not a requirement. Foreigners can be arbitrators in Slovakia if they have capacity under the law of their own country. For the purposes of the Arbitration Act, individuals are deemed to have a clean criminal record unless convicted of a premeditated criminal offence. No specific legal training or background is required to be an arbitrator: the Arbitration Act simply requires in general terms that the individual be experienced enough to serve as an arbitrator. More exacting requirements are sometimes imposed under the rules of some arbitration institutions.

The Arbitration Act does not contain any express provisions regulating the legal liability of arbitrators, or their entitlement to fees.

Confidentiality
Arbitrators are bound by a duty of confidentiality, which survives the termination of the arbitration proceedings. An arbitrator may be released from his ­confidentiality obligation only if the parties so agree or in accordance with certain legislative exceptions.

Challenge of arbitrators
Section 9 of the Arbitration Act requires all arbitrators to disclose (in the arbitrator´s written letter accepting appointment as an arbitrator) any and all facts and circumstances which could compromise the arbitrator´s independence or impartiality in the eyes of the parties. If, upon consideration of the facts disclosed in the arbitrator’s letter of acceptance, the parties do not challenge the arbitrator´s appointment within 15 days, the grounds for challenging the arbitrator´s appointment in the future will be limited to facts revealed after the arbitrator´s appointment. According to Section 9 of the Arbitration Act, an arbitrator is also required to disclose to the parties any potentially compromising facts or circumstances that may arise during the arbitration.

The procedure for challenging an arbitrator may be agreed upon between the parties. In the absence of an agreement between the parties, the arbitral tribunal is allowed to continue with the arbitration proceedings whilst considering the challenge, but must not issue an award. Unless otherwise agreed, a challenge is decided by the tribunal or a third party nominated by the parties. The ruling on the challenge cannot be appealed.

The appointment of substitute arbitrators
When an arbitrator ceases to hold office (e.g. due to the arbitrator´s resignation, removal or death), a replacement arbitrator is appointed in accordance with the procedure agreed by the parties. In the absence of any agreement between the parties on this issue, the parties must follow the same procedure as that adopted for the appointment of the original arbitrator(s).

Competence to rule on its own jurisdiction
Section 21 of the Arbitration Act provides that the arbitral tribunal is competent to rule upon its own jurisdiction, including challenges to the validity or existence of the arbitration agreement. Where the arbitration tribunal concludes that it does not have jurisdiction to hear the dispute, it must issue an order staying the arbitration proceedings. Any challenge to the tribunal’s jurisdiction must be raised by a party no later than when taking the first step in the proceedings on the merits (i.e. usually when filing the written defence to the claim), unless the application is based on the dispute being non-arbitrable. In that event, the tribunal’s jurisdiction can be challenged at any stage of the arbitral proceedings. In institutional arbitration proceedings, the relevant institutional rules may confer competence on the institution to rule upon the tribunal’s jurisdiction. In the absence of any express provision to this effect in the institutional rules, the Arbitration Act applies.

Power to order interim measures
Once constituted, the arbitral tribunal can issue any interim measures it deems necessary to protect the subject matter of the dispute and preserve the integrity of the proceedings (Section 22 of the Arbitration Act). The arbitral tribunal may require that the party seeking interim measures provides security in exchange for any interim measures that are granted. Prior to the constitution of the tribunal and after the termination of the arbitration proceedings, interim measures must be sought from the Slovak courts. An application to the Slovak courts is also sometimes required in order to enforce any interim measures granted by an arbitral tribunal.

Commencement
In the case of arbitration proceedings conducted under the auspices of an arbitration institution, the proceedings start on the date on which the claim is filed with the competent arbitration institution. In the case of ad hoc arbitration, the proceedings start on the date on which the claim is received by the other party, or filed with one of the arbitrators.

According to Section 18 (6) of the Arbitration Act, unless the parties agree otherwise, the arbitral tribunal is entitled to require that the claimant pay an advance towards the arbitrators’ estimated fees; failing which, the tribunal will stay the proceedings.

After the claimant has filed its claim, the defendant must file a written Statement of Defence (within the period agreed by the parties or determined by the arbitral tribunal) responding to the claimant’s claim. The defendant can also file a counterclaim together with its defence.

Procedural powers of the tribunal
The Arbitration Act allows arbitral institutions to regulate their procedural powers by publishing their own rules of procedure (Section 14 of the Arbitration Act). Furthermore, pursuant to Section 51 (3) of the Arbitration Act, in the event that the Arbitration Act is silent on any issue, the provisions of the Civil Procedure Code shall apply. Most institutional rules – as well as the default provisions contained in the Arbitration Act – confer wide discretion on the arbitral tribunal to fix the procedure for the arbitration in the absence of any express agreement in this regard between the parties.

Place and language of arbitration
The place of arbitration is usually selected by the parties. In the absence of agreement between the parties, the tribunal will determine the place of arbitration taking into account the nature of the dispute and the interests of the parties (Section 23 (1) of the Arbitration Act).

Unless otherwise agreed by the parties, the arbitral tribunal may organise hearings and perform its functions at a venue other than the place of arbitration.

In the absence of agreement between the parties, the language of the arbitration will be determined by the arbitral tribunal (Section 24 of the Arbitration Act). There is no general rule that domestic arbitration proceedings must be conducted in Slovak; what is most important when choosing the arbitration language is the efficiency of the arbitral process. This agreement or decision about the language will apply to all written statements of case, hearings, the award and all other documents issued by the arbitral tribunal. The arbitral tribunal may further rule that any foreign-language document be accompanied by an official translation into the language of the arbitration.

Submissions
The Arbitration Act contains rules governing the format, content and timetable for filing written submissions. The procedure for filing the claim and defence is governed by Section 18 of the Arbitration Act. After service of the defence, the claimant is usually given an opportunity to file a written reply, to which the defendant can then respond in a written rejoinder.

Written submissions are deemed served if delivered to the addressee in person or to his place of business or residence. If written documents cannot be delivered to the addressee despite the best efforts of the serving party, the documents are deemed served if sent to the addressee’s last known address, place of business or residence by registered mail or any other method providing proof of service.

Likewise, all expert reports or other evidence submitted to the arbitral tribunal by one party must be served without undue delay on the other parties.

Oral hearings and ‘document-only’ arbitrations
Article 29 empowers the arbitral tribunal to continue with the proceedings and the parties are free to agree upon whether the proceedings should be conducted purely on paper (e.g. inviting the tribunal to render its award on the basis of written submissions only) or with the benefit of oral hearings before the arbitral tribunal. In the absence of agreement between the parties, the arbitral tribunal will decide whether or not an oral hearing is required. If the arbitral tribunal considers that an oral hearing is necessary, the general rule is that such hearing will be held in private (unlike in national court proceedings), unless the parties agree otherwise. However, unless the parties expressly agree, there is no general rule that there will be such an oral hearing. Section 26 (4) of the Arbitration Act obliges the parties to assist the arbitral tribunal to resolve the dispute. In keeping with this obligation, parties are required to attend oral hearings either personally or through a representative. They are likewise required to file all written submissions and other documents on time, although the arbitral tribunal has the power to grant extensions of time in appropriate cases.

A formal notice of any oral hearing must be served on all parties well in advance of such hearing. A party who is resident outside Slovakia is entitled to 30 days prior notice of any hearing.

Evidence
Pursuant to Section 27 of the Arbitration Act, the arbitral tribunal can agree to hear the oral evidence of the parties as well as that of factual and expert witnesses. As regards documentary evidence, the parties usually attach the documents upon which they wish to rely to their written submissions. The arbitral tribunal, nevertheless, has the power to order the parties – either of its own motion or on the application of one of the parties – to produce additional documentary evidence if it believes that such documents might assist in resolving the issues in dispute. The arbitral tribunal can also seek the assistance of the local courts to obtain additional evidence (e.g. to compel third parties to provide oral or documentary evidence). The arbitral tribunal determines for itself, in the exercise of its discretion, what weight to attach to the evidence submitted by the parties.

Choice of law
In the event of a dispute with an international element, the arbitral tribunal must render its decision on the issues in dispute in accordance with the law agreed by the parties. Unless otherwise agreed, the parties’ agreement on the governing law refers only to the substantive law of the chosen State and not to its conflict of laws rules. In the absence of agreement between the parties on the governing law, the arbitral tribunal shall apply the law determined by the Slovak conflict of laws rules (Section 31 (1) of the Arbitration Act).

In the case of domestic arbitration proceedings, the governing law will always be Slovak law (Section 31 (2) of the Arbitration Act). In all cases, however, the tribunal can take into account relevant customs and trade usages. The tribunal can also decide cases ex aequo et bono if the parties so agree.

Decisionmaking by the tribunal
Section 32 of the Arbitration Act provides that, in the case of arbitral proceedings with more than one arbitrator, an award must be rendered by a majority of the arbitrators. Any dissenting arbitrator may attach a dissenting opinion to the award explaining his reasons for disagreeing with the decision of the majority. In the event of a tie due to the absence of an arbitrator, the vote of the presiding arbitrator is decisive.

To avoid acting in excess of jurisdiction (and thereby imperilling the enforceability of the award), the arbitral tribunal must limit the scope of its award to the issues submitted to arbitration by the parties.

In accordance with Section 33 (1) of the Arbitration Act, the tribunal may also make awards recording a settlement reached between the parties. According to Section 152 of the Civil Procedure Code, the tribunal may also issue partial awards (i.e. awards relating to some, but not all, of the issues in dispute) and interim awards (e.g. confirming the tribunal’s jurisdiction in response to a jurisdictional challenge).

Form, content and effect of the award
According to Section 34 (2) of the Arbitration Act, an award must be reduced to writing and be signed by a majority of the arbitrators. The award must also contain:

• the name of the arbitration institution (if any);
• the names of the arbitrators;
• the names of the parties and their representatives;
• the place of arbitration;
• the date of the arbitral award;
• the decision of the tribunal on the issues in dispute;
• the reasons upon which the award is based (unless the parties have agreed that no grounds need to be included in the award or the award is based on a settlement agreement); and
• instructions to the parties on how to challenge the award.

The award should contain a ruling on costs and determine which party is obliged to pay such costs. Where the award imposes an obligation to perform an act, the arbitral tribunal shall specify a period in which such performance should be effected.

The award must either be pronounced orally to the parties or be served on the parties. If the award is not subject to review, or if the time limit for lodging an application to review the award has expired, the award acquires the force of res judicata and is binding on the parties once served (in the same way as a national court decision).

Termination of proceedings
The arbitral proceeding shall be terminated either by the issuance of an arbitral award or by a decree of discontinuance in the event that no arbitral award will be issued (e.g. if the arbitral tribunal declines jurisdiction over the dispute). The provisions governing the arbitral award apply equally to any decree of discontinuance (Section 38 (2) of the Arbitration Act), i.e. the decree must be in writing, signed by a majority of the arbitrators and served on the parties in the same way as an arbitral award.

Costs
The costs of arbitration can include (a) the administrative fees of the arbitration institution (if any); (b) the fees and disbursements of the arbitrators; and (c) the legal costs and disbursements of the parties. In ad hoc arbitration proceedings, the arbitrators’ fees will be agreed between the parties and, unless the parties agree otherwise, the arbitral tribunal will allocate the payment of these, and other, costs between the parties in its final award. In the case of institutional arbitration, the relevant institutional rules will fix the administrative fees of the institution and the arbitrators’ fees, and the tribunal usually has the discretion to allocate the payment of these and the legal costs between the parties in its final award. Although the Arbitration Act does not contain any express rules on the allocation of costs in arbitration proceedings between the parties, in practice tribunals tend to order the losing party to pay the administrative fees and the arbitrators’ fees, whilst leaving the parties to pay their own legal costs.

The administrative fees charged by arbitration institutions for handling arbitrations vary from institution to institution. The fee for filing a petition regarding a commercial matter with a regular court is calculated as a percentage of the sum in dispute (typically 6%), but with minimum and maximum fees of SKK 2,000 (i.e. EUR 64) and SKK 1 million (i.e. approximately EUR 32,000) respectively. The fees of arbitral institutions are likewise calculated as a percentage of the sum in dispute (3% in the case of the Arbitration Institution attached to the Slovak Banking Association), but the percentage tends to diminish as the value of the claim increases. The administrative fees charged by the Arbitration Institution attached to the Slovak Chamber of Commerce and Industry are generally lower than the fees levied by national courts for claims exceeding SKK 8 million (i.e. approximately EUR 265,000). That said, the arbitration institutions tend to levy higher fees in the case of international disputes and, of course, parties are obliged to pay fees to the arbitrators in arbitration proceedings whereas national court judges are remunerated from the State budget.

Interest
There is no express provision in the Arbitration Act governing the issue of whether or not an arbitral tribunal can award interest. It is generally accepted, however, that arbitral tribunals have the power to award interest so long as such power is envisaged by the law governing the dispute. Default interest may be awarded either on a contractual basis (if so provided in the contract between the parties) or on a statutory basis (pursuant to Section 517 of the Civil Code or Section 369 of the Commercial Code).

Settlement
Where the parties reach a settlement in the course of the arbitration proceedings, Section 39 of the Arbitration Act provides that the arbitral tribunal will terminate the proceedings and may, upon the request of the parties, record the settlement in the form of an arbitral award on agreed terms. Such an award has the same effect as an award on the merits.

Appeals
Pursuant to Section 37 of the Arbitration Act, the parties may agree in their arbitration agreement that the award can be submitted to another arbitral tribunal for review. If such a review process has been countenanced by the parties, the petition requesting a review of the award must be filed within 15 days of receipt of the award. In the absence of such an agreement, the award is final and binding subject only to limited grounds upon which a national court can set aside the award (see below).

Correction and interpretation of the award
Section 36 (1) of the Arbitration Act provides that the tribunal (of its own motion or upon the request of a party) may correct in the award any clerical, typo­graphical, computational or other similar errors within 30 days of the date of the award. If the tribunal considers the request to be justified, it shall issue a corrected award within 30 days of receipt of the party’s request.

The parties may likewise request the arbitral tribunal to give an interpretation of a specific point or part of the award within 30 days of receipt of the award (Section 36 (2) of the Arbitration Act). However, there is no set period for the tribunal to give the interpretation of the award, if the tribunal considers such request to be justified.

In addition, according to Section 166 of the Civil Procedure Code, the parties may request, within 15 days of receipt of the award, an additional award on claims submitted to the tribunal but omitted from the award. If the tribunal considers such request not to be justified, the request of the party will be denied.

The jurisdiction of the courts
The Arbitration Act specifies certain circumstances in which the Slovak courts have the power to intervene in arbitration proceeding. In particular, the courts have jurisdiction to support the arbitral process by appointing arbitrators, granting interim measures (see above) and assisting with evidence-gathering. In addition, the courts play a crucial role in hearing applications relating to the challenge and enforcement of arbitral awards.

Stay of court proceedings
The Slovak Republic is a signatory to the New York Convention 1958. In keeping with Article II (3) of the New York Convention, the Slovak Civil Procedure Code requires a national court to stay its proceedings as soon as it becomes aware– through an application by the defendant contesting the court’s jurisdiction (which must be made no later than in the first step in the proceedings contesting the merits) – of the existence of a binding arbitration agreement. However, if both parties declare that they do not wish the dispute to be resolved by arbitration, then the court may proceed to hear the case. The court will also accept jurisdiction to hear a case if it establishes that under Slovak law the case is non-arbitrable, that the arbitration agreement is invalid, inoperative or incapable of being performed, that the claim falls outside the jurisdiction of the arbitrators, or that the relevant arbitration institution has refused to deal with the case.

Where proceedings are stayed and arbitration proceedings are filed on the same issues within 30 days of the order staying the court proceedings, the legal effect of the original action shall remain unaffected (e.g. the claim is deemed to have been issued on the date of commencement of the court proceedings for the purposes of calculating the relevant limitation period).

Where court proceedings were issued after the commencement of arbitration proceedings challenging the existence, validity or scope of the arbitration agreement, the court must stay such proceedings until the arbitrators have ruled upon their own jurisdiction. If the tribunal decides that it has jurisdiction, the court must refuse jurisdiction. That said, the parties may later challenge the tribunal’s assumption of jurisdiction by applying to the court to set aside the tribunal’s award for lack of jurisdiction.

Interim protective measures
As mentioned above, the Slovak courts have jurisdiction in certain circumstances to grant interim measures in support of arbitration proceedings. For example, the local courts can grant interim measures, at the request of one of the parties, if the arbitral tribunal has not yet been constituted, or post-issuance of the award, to counter any threats to the enforcement of the award.

Obtaining evidence and other court assistance
According to Section 27 (3) of the Arbitration Act, the competent court has jurisdiction to obtain evidence (e.g. to compel third parties to provide oral or documentary evidence) upon the application of the arbitral tribunal, when obtaining such evidence exceeds the procedural powers of the arbitrators. The court will sustain the application by the arbitrators unless the steps applied for are prohibited by law. The arbitral tribunal may require that the party seeking evidence provides an advance to the competent court towards its court fees.

It is worth mentioning that most arbitral awards are accepted and honoured by parties in Slovakia and are not subjected to any formal challenge before the local courts. In the small number of cases in which awards are challenged, the Slovak courts have revealed a tendency to uphold arbitral awards and are reluctant to set aside awards in the absence of compelling reasons.

Section 40 of the Arbitration Act provides the following grounds for challenging an award:

• the subject matter of the dispute was non-arbitrable;
• the award dealt with a dispute not contemplated by or not falling within the terms of the arbitration agreement and the party challenging the award objected to this fact before the arbitral tribunal;
• the award addressed issues that had already been determined by a previous court or arbitral tribunal;
• the arbitration agreement is invalid;
• a party to the arbitration was unable to present his case (e.g. was not duly represented);
• the award was rendered by an arbitrator who had been removed for bias;
• the principle of the equality of the parties was violated;
• there are compelling reasons for re-opening the case (e.g. new evidence has emerged which casts serious doubt upon the correctness of the tribunal’s decision); or
• the award was tainted by fraud or other criminal conduct.

Section 41 provides that, as a general rule, a party seeking to challenge an award before the Slovak courts must do so within 30 days of being served with the award. In the case of a challenge based on the alleged existence of compelling reasons for re-opening the case, a party has 30 days from the date upon which it became aware of the facts justifying such challenge (but with a long-stop of three years from the date upon which the award was rendered).

The court’s power to set aside an award cannot be excluded by agreement between the parties (except for the ground relating to the re-opening of the case).

The filing of an application to set aside an award does not have the automatic effect of staying the enforcement of the award. The court may, however, stay enforcement of the award upon the application of a party if it considers that immediate enforcement could cause serious prejudice to the losing party.

In circumstances where the court sets aside an award on the basis of the tribunal’s lack of jurisdiction or as a result of the invalidity of the arbitration agreement, the court will assume jurisdiction and render a judgment on the subject matter of the dispute. In all other cases, the arbitral agreement remains valid and the dispute shall be submitted to a new arbitral tribunal.

Domestic awards
A domestic award (i.e. an award issued in the territory of the Slovak Republic) that is not subject to review acquires the force of res judicata when served on the parties and, after expiration of the enforcement period, is enforceable in accordance with the provisions of the Civil Procedure Code and Act No. 233/1995 Coll. on enforcement (Execution Code), subject to the same conditions as court decisions. According to Sections 29 and 36 of the Execution Code, the enforcement of the award commences upon the filing of an execution application to the executor, jointly with the enforceable decision (arbitral award) and by depositing an advance towards the cost of the execution procedure. The executor may start execution after receiving court approval, subject to notifying both parties. Should the party against whom execution is sought fail to object to the execution within 14 days of the notification (e.g. for inadmissibility) or the court rejects his challenge, the executor will issue an execution order. Based on the execution order, the executor can execute the award against the debtor’s bank accounts, property, securities, etc.

Foreign awards
The enforcement of foreign awards (i.e. awards rendered in a State other than the Slovak Republic) is governed by Section 46 et seq. of the Arbitration Act. Since Slovakia is party to the New York Convention 1958, all awards rendered by States that are party to the Convention are in principle enforceable in Slovakia in the same way as domestic arbitration awards.

In relation to non-New York Convention awards, Section 46 et seq. of the Arbitration Act sets out the conditions pursuant to which a foreign award may be recognised and enforced. According to Section 47 (1) of the Arbitration Act, the party requesting the recognition and enforcement of a foreign award must file a written petition with the court for recognition and enforcement of the award accompanied by the original of the foreign award (or a copy certified by a notary) and the original of the arbitration agreement (or a copy certified by a notary). If the award or agreement is in a foreign language, the party must also produce a translation certified by an official or sworn translator or a diplomat or consular agent.

Where a party has made an application to the courts of another country to set aside the award that is the subject of the enforcement application, the Slovak courts may stay the enforcement of the award.

Pursuant to Section 50 (1) of the Arbitration Act, recognition and enforcement of a foreign award may only be refused if:

• the parties to the arbitration agreement were under some incapacity;
• the arbitration 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;
• the party against whom the award was made was not given proper notice of the appointment of an arbitrator or of the arbitration proceedings, or could not attend the hearing for some other serious reason;
• the award decided a dispute not contemplated in the arbitration agreement or which did not fall within the terms of the arbitration agreement;
• the subject matter of the dispute was non-arbitrable;
• the arbitral tribunal was not appointed or the arbitration proceedings were not conducted in the way agreed by the parties, or, in the absence of agreement by the parties on these issues, the composition of the tribunal and the conduct of the proceedings was not in accordance with the law of the country in which the arbitration proceedings took place;
• the arbitral award has not yet become binding upon the parties or has been set aside or stayed by the court of the country where, or *under the law of which, the award was made; or
• the recognition and enforcement of the award would be contrary to Slovak public policy.

Any decision refusing recognition and enforcement must be reasoned and can be appealed to the Court of Appeal and then to the Supreme Court.

In 2008, an amendment to the Arbitration Act was drafted with the intention of, inter alia, obliging arbitral tribunals to take into account laws on consumer protection; requiring tribunals to effect personal service of awards on the parties; giving the courts additional powers to set aside awards relating to consumer agreements. According to the terms of the draft amendment, an arbitrator will not award interest or costs against a consumer in cases where a consumer loan agreement fails to include all statutory protections for the consumer. In addition, arbitrators will be given the power to vary the terms (e.g. interest rates) of certain types of loan agreement, and will not require consumers to continue performing their obligations if faced with aggressive media attacks, intrusive telephone calls or other forms of harassment from the other party.

There is a risk that the proposed amendment (if and when it enters into force) could increase the length of arbitration proceedings and lead to an increased number of challenges to arbitral awards.

Attempting to resolve disputes before the Slovak courts can be slow and unpredictable. For this reason – and in the light of the many advantages of arbitration (e.g. confidentiality and the international enforceability of awards)–there is an increasing tendency for parties to seek to resolve their disputes by way of arbitration. Consumers are likely to add to this trend if the draft amendment to the Arbitration Act is passed into law. It is also hoped that the more rigorous dispute resolution framework offered by arbitration proceedings will enable parties to understand the strengths and weaknesses of their cases at an earlier stage, and thereby encourage the early settlement of disputes.

CMS Reich-Rohrwig Hainz Rechtsanwälte GmbH and
CMS Cameron McKenna v.o.s. in association with
Ružicka & partners, s.r.o.
Kapitulská 15
81101 Bratislava, Slovakia


Zuzana Dzilská
T +421 2 54 43-3490
F +421 2 54 43-5906
E dzilska@ccsconsulting.sk


Katarína Kovácová
T +421 2 54 43-3490, -3224
F +421 2 54 43-5906
E kovacova@ccsconsulting.sk