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Trends and Developments – Handling Disputes in Times of COVID Pandemic

Trends and Developments – Handling Disputes in Times of COVID Pandemic

Austria
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As does every crisis, the COVID-19 pandemic has created an influx of high-profile litigation matters. A significant disparity has emerged during the crisis: Larger litigation departments – like our firm – are extremely busy, while some solo practitioners are suffering severely from the economic downturn.

Austrian Courts

While Europe seems horribly slow in getting its citizens vaccinated, the Austrian justice system has shown remarkable flexibility, enabling the courts to remain open – and almost fully operational.

The use of videoconferences for full court hearings has expanded significantly since being implemented in spring 2020. However, in order to provide a fair, human rights-compatible trial, its use requires express consent by all parties. As opposed to arbitration proceedings, court hearings must be public. Justice must not only be done, but also seen. Therefore, not all hearings can be held with the help of video conference equipment, especially if the underlying facts are hotly disputed, and evidentiary proceedings play an important role. Then, cross examinations in person are clearly preferred. Often, both judges and parties opt for hearings with at least the local parties being physically present.

Judges have become open to hybrid hearings, in which foreign witnesses or parties are heard via video-conference, and the locals are present. To facilitate this, courts have started to offer COVID-19 tests every morning before hearings start (so, for instance, at 7:45 a.m.), provided everybody agrees. Otherwise, FFP2 masks will be required and a two-meter distance maintained. At the entrance of the courthouse, body temperatures will be measured and, where no air conditioning is available, courtroom windows will be kept wide open, even at freezing temperatures (so we encourage those who will be attending to bring their warmest down coats along). If many participants are expected, we have seen judges move the proceedings to large hotel rooms or halls to allow for the necessary social distancing. Although such alternative arrangements can cause delay, overall, Austrian courts have adjusted incredibly well to the challenges and litigation practices across the country are booming.   

Arbitration

Arbitration was also affected by the challenges of the last year. The sudden travel restrictions made necessary by the COVID-19 pandemic required quick changes to Arbitration practice to ensure the progress of pending proceedings. Courts and tribunals all over the world had to decide if and under which circumstances oral hearings could be conducted remotely, and whether an arbitral tribunal could order a remote hearing over the objections of a party. As in most jurisdictions, Austrian arbitration law does not explicitly address this issue.

In July 2020, the Austrian Supreme Court issued a landmark decision favoring the admissibility of remote hearings and confirming that arbitral tribunals had the power to order remote hearings over the objection of a party. According to the Court, remote hearings do not per se violate the principles of equal treatment of the parties or the right to be heard, nor do they affect the recognition or enforceability of an award. Furthermore, the court concluded, a hearing held via videoconference over the objections of a party does not violate Art. 6 of the European Convention on Human Rights, as the right to a fair trial encompasses not only the right to be heard, but also the right of access to justice. Particularly in times of a pandemic, remote hearings allow a reconciliation of the right to be heard and the right to effective access to justice. Even though the decision was undoubtedly influenced by the restrictions brought about by the COVID-19 pandemic, the Court’s acceptance of remote hearings is likely to survive even once the pandemic has subsided. 

Patience is required. Overall, we must prepare for slower, more fraught court processes. However, attorneys who are well equipped, both virtually and physically, to creatively apply know-how, are available to clients even in times of crisis. Also, the Supreme Court’s decision that holding a hearing via videoconference despite the objections of a party does not violate Art. 6 of the ECHR not only underlines the nature of arbitration as a flexible dispute resolution mechanism that swiftly adapts to the needs of the parties, but also offers an interesting insight into the Court’s understanding and interpretation of Art. 6 ECHR.

By Bettina Knoetzl and Florian Haugeneder, Partners, Knoetzl

This Article was originally published in Issue 8.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.

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