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New rules in arbitration proceedings

Do the new rules apply to your arbirtration verdicts?

An amendment to the Act on Arbitration Proceedings (Act No. 244/2002 Coll. on Arbitration Proceedings) comes into force on 01 January 2017. It introduces major changes to the right to establish a court of arbitration as well as new obligations for established courts.

According to the amendment, a permanent court of arbitration (“PCA”) seated in Slovakia can only be established by a national sports association or a chamber established under law such as the Slovak Bar Association, or the Slovak Chamber of Commerce. The amendment also obliges legal persons which can establish a PCA to keep the court operational at its own expense, if this is stipulated in a separate provision (Act No. 492/2009 Coll. on Payment Services). Other legal persons (such as a business company) will not be able to establish a PCA. The legislator explained this as preventing a conflict between the founder of a PCA and the necessity for this court to be impartial. Other news includes the fact that PCAs will no longer have a permanent seat since the proceedings can be conducted at any place the parties agree on or where the court of arbitration decides.

Founders of a PCA will have an information duty - until 30 April of the following calendar year they have to publish an activity report for the previous calendar year on their official website. The report has to include the number of cases opened, closed and pending, the total number of parties as well as information on how many participants are parties to more than one case before the PCA, plus other information specified by law.

If arbitration proceedings are opened before 31 December 2016 and the competent court of arbitration does not not fulfill the requirements effective from 01 January 2017, the effects of these arbitration proceedings remain in force if a party to the proceedings files an action with the court within three months from suspension of the arbitration proceedings. The duration for which the arbitration proceedings were suspended is not included in the general statute of limitations of three years under Act No. 40/1964 Coll. (Civil Code). The founder of a PCA is obliged to dissolve it within three months from the day it cannot conduct arbitration proceedings and issue decisions. The parties to arbitration proceedings (claimant and defendant) can consent to continuation of arbitration proceedings under the rules of the court of arbitration until 31 December 2016 at the latest.

The temporary provisions applicable to the amendment state that the parties are not bound by the arbitration contract of a court of arbitration which does not fulfill the terms and conditions under the effective legal provisions from 01 January 2017.