The arbitration process for the resolution of disputes between litigants constitutes an option for the swift administration of justice, which, as a rule, does not permit recourse to a subsequent level of jurisdiction. The award is binding.
However, there are rare and exceptional cases where an arbitral award can be challenged and annulled. Our law firm successfully handled such a specialized case involving annulment due to an impermissible "assessment based on probability".
According to the Greek Code of Civil Procedure (CCivP), the grounds for the annulment of an arbitral award are exhaustively listed in Article 897 of the CCivP. The award may be annulled in whole or in part, primarily if:
Those who issued it acted in excess of the authority granted to them by the arbitration agreement or the law (Article 897, no. 4 of the CCivP).
It is contrary to public policy provisions or public morals (Article 897, no. 6 of the CCivP).
An excess of authority exists primarily when the arbitrators derive their power from an existing agreement but exceed its boundaries, rendering their award voidable.
However, there is another ground for the annulment of an arbitral award that aligns with the aforementioned provisions. In the case we undertook, the Court of Appeal annulled the arbitral award based on the following legal reasoning:
The Binding Nature on Arbitrators: Under Article 886, paragraph 1 of the CCivP, the parties may determine the arbitral procedure and the standard of judicial conviction (e.g., whether full proof or a mere assessment of probability is required). This procedural agreement is fully binding upon the arbitrator.
The Rule of Law Unless the agreement stipulates otherwise, the law, as a rule, demands full proof regarding the truth or falsity of a factual allegation. No provision grants arbitrators the authority to decide based on a reduced standard of certainty (probability).
If the arbitrators decide based on probability without being granted such authority, they exceed their limits, and their award is subject to annulment.
"It was proven that the arbitral tribunal exceeded the authority granted to it by the law and the arbitration agreement regarding the standard of judicial judgment… and consequently, its award is deemed subject to annulment."
A crucial point highlighted in this case is the following: When the litigants agree to have the dispute adjudicated under the interim measures procedure (for reasons of speed), this does not mean they automatically accept accept the application of provisions unique to the granting of interim relief, such as an "assessment based on probability“. This constitutes a final resolution of the dispute, and full proof is required.
The annulment of an arbitral award demands a profound knowledge of procedural law, swift reflexes, and exceptional legal handling before the Court of Appeal. Our law firm possesses extensive experience in resolving complex commercial disputes and providing strategic advice on corporate law matters, consistently protecting our clients' interests.
As merely reading this article does not substitute for full and personalized legal counsel, contact us today so we can immediately evaluate the facts of your case and design the appropriate line of defense.
