This article was featured in Jus Mundi‘s 2024 Arbitration Year in Review, in collaboration with VYAPs, a yearly collection of articles from jurisdictions all around the globe updating you on arbitration-related developments from the previous year.
THE AUTHORS:
Myrto Pantelaki, Legal Counsel at the Hellenic Ministry of Defence
Stefanie G. Efstathiou, In-house legal counsel at Denic eG
Spyridon Batzios, Associate at ALG Manousakis
This article provides an overview of the key developments in international arbitration in Greece in 2024, with a particular focus on Law 5016/2023 which introduced innovative provisions in many aspects of the arbitral procedure, and on important arbitration-related decisions issued by Greek courts in 2024.
Key Reforms of Law 5016/2023 on International Commercial Arbitration
In Greece, a dual arbitration system is in place: domestic arbitration is governed by the Greek Code of Civil Procedure, while international arbitration is regulated by Law 2735/1999, which incorporates with minor modifications the UNCITRAL (United Nations Commission On International Trade Law) Model Law on International Commercial Arbitration (2006). More than twenty years after the entry into force of Law 2735/1999, Greece modernized its national rules on international commercial arbitration with the new amendments aiming at repealing the existing provisions and incorporating international developments and contemporary trends in the theory and practice of international arbitration. Some of the salient features of the new arbitration act are highlighted below:
- Presumption of Arbitrability. The general principle is established that all disputes are arbitrable, unless the law prohibits it. Specifically, article 3(4) establishes an important presumption in favor of arbitrability for all kinds of disputes.
- Validity of Arbitration Agreements. Article 11(1), inspired by the relevant provision of the Swiss PILA, adopts the in favorem validitatis approach and provides that an arbitration agreement will be given effect to if it is valid under:
- Its own proper law,
- The law of the seat, or
- The law governing the parties’ substantive relationship.
Under these conditions, the validity of the arbitration agreement will be upheld, demonstrating the arbitration-friendly approach of Greek legislation towards international arbitration.
- Appointment of Arbitrators in Multi-Party Dispute. Article 16 provides that when multiple claimants or respondents fail to agree on a joint nominee, the solution is to be given by state courts. This provision aims at safeguarding the progress of the proceedings and overcoming the deadlock regarding the constitution of the arbitral tribunal. Early joinders are also encouraged, and parallel proceedings may be consolidated, even if they are pending before different arbitrators.
- Arbitrators’ Power to Grant Interim Relief. Article 25 grants arbitrators the power to order interim relief, while arbitrators are also expressly vested with the authority to issue preliminary orders. The same provision establishes the duty of the national courts to facilitate the enforcement of the interim relief ordered by the arbitral tribunal, except in limited circumstances.
- Set-Aside Procedure. The set-aside procedure has been modernized. The Law seeks to discourage dilatory tactics by permitting challenges to awards on jurisdiction or admissibility only as part of the final award. It recognizes, however, that such challenges may have merit and that early resolution can prevent unnecessary time and costs. Article 23(4) also stipulates that challenges to preliminary jurisdiction decisions can be submitted with the parties’ agreement or with the permission of the arbitral tribunal.
The new Law introduces significant innovations aimed at modernizing the arbitration framework and enhancing Greece’s reputation as an arbitration-friendly jurisdiction. While the law came into force in 2023, many of the judicial decisions from 2024 are deeply influenced by the foundations established by this legislative reform, illustrating how the new framework aligns with international best practices and fosters confidence in arbitration.
Case Law Highlights
Decision 953/2024 (Supreme Court of Greece)
In its 953/2024 Decision, the Supreme Court of Greece addressed a challenge to an arbitral award based on public policy violations. The case involved a dispute over the enforcement of an arbitral decision that the claimants alleged violated Greek public policy principles with the main conclusions being the following:
- Public Policy Definition: The court clarified that public policy encompasses mandatory rules designed to protect fundamental public interests and the political, cultural, social, or economic foundations of the legal system. It distinguished these from general mandatory provisions intended primarily to safeguard private interests.
- Standards of a Fair Trial: The court emphasized that arbitration proceedings must comply with the principles of due process, including equal treatment of the parties and adherence to procedural fairness. However, it underscored that courts will not re-evaluate the evidence or substantive merits of the arbitral tribunal’s decision.
- Scope of Review: The court reiterated that judicial review of arbitral awards is limited to specific grounds under Article 897 of the Greek Code of Civil Procedure. It rejected the challenge, finding no evidence of a public policy violation that would justify annulling the award.
This decision reinforces the principle of minimal judicial intervention in arbitration and upholds the finality of arbitral awards, provided they comply with fundamental procedural safeguards and do not contravene core public policy principles.
Decision 1517/2024 (Athens Court of Appeal)
Decision 1517/2024 involved a dispute between the Greek government and a foreign corporation regarding a contract for the supply of military equipment. The case focused on the enforceability of the arbitration agreement amidst allegations of corruption and procedural irregularities, while the principles of separability and favor validitatis played a pivotal role in the court’s reasoning. In particular:
- Broad Interpretation of Arbitration Clauses: The court interpreted the arbitration clause broadly, encompassing not only contractual disputes but also tort claims related to the contract. It held that the wide language of the clause allowed for the arbitration of all claims arising from or connected to the contract.
- Jurisdictional Challenge: The court rejected the argument that the allegations of corruption rendered the arbitration agreement invalid, stating that the validity of the arbitration agreement must be assessed independently of the underlying allegations. It reaffirmed the principle of separability and held that the arbitral tribunal had the authority to determine its jurisdiction.
- Referral to Arbitration: The court upheld the lower court’s decision to refer the dispute to arbitration. It emphasized that allegations of corruption, while serious, did not automatically nullify the arbitration agreement, unless specific evidence demonstrated that the agreement itself was procured through corrupt practices.
This decision illustrates the Greek judiciary’s commitment to upholding valid arbitration agreements, even in complex disputes involving allegations of corruption. It underscores the autonomy of arbitration as a dispute resolution mechanism and the limited scope of judicial intervention.
Decision 308/2023 (Supreme Court of Greece)
Decision 308/2023 examined the issue of the extension of the arbitration agreement to non-signatories. The case involved a dispute between a Greek company and its foreign parent company, focusing on the enforceability of an arbitration agreement signed by the subsidiary. Although this case originated under earlier legal frameworks, its reasoning aligns with the modern principles codified in Law 5016/2023, showcasing the continuity and evolution of arbitration law in Greece. Specifically:
- Piercing the Corporate Veil: The court upheld the arbitral tribunal’s decision to pierce the corporate veil and bind the parent company to the arbitration agreement. It found that the parent and subsidiary were effectively indistinguishable, with the parent exercising significant control over the subsidiary’s operations. The court reasoned that allowing the parent company to evade the arbitration agreement would undermine the principle of good faith.
- Limits of Public Policy Challenges: The court rejected arguments that the arbitral award violated international public policy. It clarified that errors in law or insufficient reasoning do not constitute public policy violations unless they result in a fundamental breach of the legal order.
- Arbitral Jurisdiction: The court affirmed the tribunal’s jurisdiction to adjudicate disputes involving the parent company, emphasizing that arbitration agreements can extend to entities closely connected to the contracting parties, provided there is sufficient evidence of control or abuse of corporate form.
This decision highlights the Greek judiciary’s support for arbitration as a flexible and effective mechanism for resolving complex, cross-border disputes. It also underscores the importance of addressing abusive corporate practices within the framework of arbitration.
Conclusion
Greece’s recent legislative and judicial developments demonstrate a strong commitment to fostering an arbitration-friendly environment. Law 5016/2023 aligns the Greek legal framework with international standards, promoting efficiency, finality, and party autonomy in arbitration. Meanwhile, judicial decisions such as 953/2024, 1517/2024, and 308/2023 reinforce the principles of minimal judicial interference, broad interpretation of arbitration agreements, and robust enforcement of arbitral awards. Together, these advancements position Greece as an increasingly attractive venue for international arbitration.
ABOUT THE AUTHORS
Myrto Pantelaki advises the Hellenic Ministry of Defence on investments in the defence sector, EU law and procurement, R&D contracts and G2G/B2G agreements, with a focus on defence and corporate disputes. Since 2023 she serves as co-chair of Greece VYAP. Prior to her current role, she conducted research at the Columbia Center on Sustainable Investment (Columbia University) and served as a national legal expert on EC research projects related to competition law and FDI screening. She holds an LL.B. (Hons) from Aristotle University of Thessaloniki and LL.M. degrees (with Distinction) in Public International Law (National and Kapodistrian University of Athens) and International Dispute Settlement (MIDS, IHEID and University of Geneva).
Stefanie Efstathiou is an IP and ADR lawyer with a particular focus on domain name disputes. She is co-chair of Greece VYAP as well as dual-qualified in Greece and in Germany and an In-house legal counsel at Denic eG, the registry for .de domain names (the largest ccTLD registry), based in Frankfurt and a Domain Name Panelist for various dispute resolution providers. Stefanie’s interests were always in the intersection between technology and ADR, therefore, she decided to conduct her PhD on the topic of AI and Arbitration at the LMU in Munich. Stefanie is also advising on and representing clients in cases in international commercial arbitration, domain name, IP and IT law disputes.
Spyridon Batzios is an associate at ALG Manousakis Law firm as well as co-chair of Greece VYAP. He has acquired multidimensional work experience and has worked at top-tier law firms in Germany and Greece, where he handled litigation and arbitration cases under different laws and rules pertaining inter alia to international sales of goods, agency and distribution agreements, banking and construction disputes. Spyridon holds an LLB from the Aristotle University of Thessaloniki, an LL.M. in German Business Law and arbitration from the Ludwig Maximilian University of Munich, an LL.M. in Private International Law from the Democritus University of Thrace from which he graduated as valedictorian and an LL.M. in International Dispute Settlement from the University of Geneva which he attended as a double scholar. He has also attended further ADR training courses in various European cities, including Athens, Paris, Rome and the Hague.
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