Arbitration options under Greek law

THE gradual development of Piraeus into one of the main centres of international shipping has had its effect also on the development of the Greek law of arbitration. Initially enacted to cater for the needs of general legal practice, Greek law dealing with arbitration and related matters includes in recent years a clear framework intended for users involved in the international shipping market.

So far as shipping is concerned, there are two main types of arbitration available in Greek law: either the specialised arbitration conducted under the auspices of the Hellenic Chamber of Shipping (HCS) or the ad hoc tribunals which may be set up under the default regime of the Code of Civil Procedure. The provisions of the latter also supplement the HCS Rules where these are silent. Either way, arbitration in Greece remains today a much quicker alternative to court litigation.

In broad terms, the general regime provided for ad hoc arbitration allows the appointment of any individual, including a member of the judiciary, as arbitrator or umpire. Members of the judiciary, however, may only act as either sole arbitrators or umpires, and the choice of the parties is limited to identifying the court from the ranks of which such arbitrators or umpires will be selected. The actual nomination is made on rotation according to seniority between judges of at least five years' experience serving at the particular court. If no court is specified by the parties, it is deemed that the parties have contemplated the Court of First Instance in the place where the arbitration agreement was concluded.

The time within which the respondent is to appoint an arbitrator is set by the plaintiffs in the notice of appointment of their own arbitrator and can be not less than eight calendar days. Unless otherwise agreed, the arbitrators must appoint an umpire within fifteen days of service of the appointment of arbitrator(s) on the last arbitrator. The appointment of an arbitrator or umpire may be entrusted to a third party, but cannot be left to one of the parties to the dispute.

The arbitration is conducted under the chairmanship of the umpire, who has equal voting rights with the arbitrators. Decision is by majority and, if this cannot be achieved, the opinion of the umpire prevails over the views of the arbitrators. By default, the award is reasoned, but there may be agreement not to give reasons. The award comes into existence when signed, but there is an obligation to register same with the Court of First Instance at the place of issue. It is enforceable when signed or when any appeal procedure prescribed by the parties is exhausted.

Decision is by majority and, if this cannot be achieved, the opinion of the umpire prevails over the views of the arbitrators. Although arbitration is extensively regulated in Greek law, court intervention is minimal.

The tribunal has express powers to rule on its own jurisdiction and on all incidental matters, but its findings are not binding on the court dealing with an application for cancellation of the award. There is no restriction on a party seeking the judicial recognition of the tribunal's lack of jurisdiction ahead of the commencement of arbitration.

Provision as to interest may be made in the award in the same way as in a court judgment. A claim carries interest as of the day of the service on the debtor of a request for payment, either in the form of the initiating summons of the proceedings or by way of a separate document served earlier. The current rate for drachma debts is 27 per cent per annum, while for foreign currency the annual rate is either the six-month LIBOR for the particular currency plus three per cent, or the discount rate set by the respective central bank plus four per cent, whichever is the higher.

Arbitrating under the Rules of the Hellenic Chamber of Shipping requires the appointment of arbitrators and umpires from the chamber's list. Appointment is made either by joint declaration of both parties to the president of the chamber, or by serving the opponents and the president with a declaration that a certain dispute is referred to arbitration.

The declaration should specify the subject-matter of the dispute, a request for relief, and the names of the arbitrator and a person domiciled in Piraeus authorised to accept service on behalf of the plaintiff. It should invite the respondents to appoint their arbitrator within eight calendar days from service. Failure to do so entitles the plaintiff to apply to the president of the chamber to appoint an arbitrator for the party in default. The same applies if the arbitrators do not agree on the appointment of the umpire. There is no restriction on appointing one's own arbitrator as sole arbitrator, but provision to that effect must be made in the arbitration agreement.

From then on, the arbitration follows its own course. Intervention by the chamber is limited to the fixing of a date and time for the first session of the tribunal and to the summoning of the parties to appear. Submissions can be oral or made in writing. Unless otherwise agreed by the parties, the tribunal applies Greek substantive law and "internationally prevailing shipping practice". Awards are registered with the chamber and with the Piraeus Court of First Instance.

Court powers over arbitration Although arbitration is extensively regulated in Greek law, court intervention is minimal. Awards are unappealable on either points of fact or points of law while, in cases were the parties themselves provide for an appeal procedure in their agreement, this could only be an appeal to some other arbitration tribunal and not to the ordinary courts. The parties' agreement to such an appeal must prescribe the conditions and period for appealing, as well as the procedure to be followed for the filing and hearing of the appeal.

An award may only be challenged by way of an application for annulment for a limited number of reasons, relating to the conduct of the arbitration itself. An award may therefore be declared null and void if:

1. the agreement to arbitrate was void;
2. the award was issued after said agreement had in some way expired;
3. the appointment of the members of the tribunal was in breach of the provisions of the arbitration agreement or of the law, or if their appointment has been revoked by the parties or by the court;
4. the tribunal acted in excess of the powers conferred by the arbitration agreement or by the law;
5. there has been a breach of the provisions regarding the parties' entitlement to equal treatment and to plead and adduce evidence in the proceedings or those regulating the manner of deliberation and the minimum contents of the award.

It is also possible to apply for a declaration that an award is legally non-existent if:

1. no agreement to arbitrate was ever concluded;
2. the award was made on a subject matter excluded from arbitration by law;
3. the award was issued in an arbitration against a non-existent person or legal entity.

The application for annulment (or for the declaration of non-existence) is heard directly by the court of appeal at the place where the award was issued. Its judgment may be appealed again before the Greek Supreme Court for cassation on points of law, and that appeal is heard within a maximum of three months from the application for setdown. Neither the application for annulment or for a declaration, nor any further appeal, can suspend the enforcement of the award, unless specifically ordered by the respective court.

Other than that, court intervention only comes into play at the stage of the constitution of the tribunal or of taxation of the arbitrators' fees.

Two further options leading to court intervention are available to the parties in order to expedite and support the arbitration proceedings:

(a) Importantly, the court may, on application by any party, set deadlines for the conduct of the arbitration or for the issuing the award if either of these is being delayed and no deadlines are set in the arbitration agreement. The relevant judgment is unappealable.
(b) During the evidence stage of the proceedings, the tribunal may ask local justices of the peace to collect evidence, by way of examination of witnesses, experts or the parties themselves, in places other than where the arbitration is being conducted.

In institutional arbitration, some of the court powers are delegated by law to those in charge of the respective institutions. In the case of the Hellenic Chamber of Shipping, its president assumes the court's powers over the constitution of the tribunal and the setting of deadlines for the progress of the proceedings and the issuing of the award. The board has responsibility for compiling a list of arbitrators which, for the purposes of ad hoc arbitration, is maintained by each Court of First Instance.

Security in support of arbitration

The need to secure the claim pending resolution of a dispute is fully taken care of under Greek law. A successful application for security can be a powerful weapon for exerting pressure for a speedy settlement, irrespective of where the claim ought to be dealt with ultimately. Security may be ordered in support of a claim which is subject to arbitration, in exactly the same manner as provided for in claims falling under the substantive jurisdiction of the ordinary courts.

Security is available during arbitration, but also ahead of the commencement of any proceedings. And it is available irrespective of whether the arbitration (or the substantive court proceedings) are to be held in Greece or elsewhere.

The Greek Code of Civil Procedure allows the ordering of security measures in all circumstances where an issue needs to be dealt with as a matter of urgency or where an imminent risk must be prevented. Prevention of risk is therefore the formal basis for applying for security, in the sense that the claim may remain unsatisfied if, by the time the dispute is finally resolved, the respondent is left with no assets. The security measure most frequently used in shipping disputes is, of course, the arrest of a vessel or the attachment of other property.

Another shipping-related measure is the placing of ship, cargo or other property, whether maritime or non-maritime, under judicial trusteeship where there is a dispute as to ownership and, in the case of cargo, where freight is due. It should be noted, however, that the list of measures provided by the law is not exhaustive or otherwise restrictive and that the court has wide discretion to order whatever measure it may deem fit in every single situation.

The relationship between arbitration and security is expressly dealt with in the Code of Civil Procedure. It is made clear that the arbitration tribunal has no jurisdiction to order security measures and has no power over such measures where these have already been ordered by a court. Equally, the parties may not refer matters of security measures to arbitration, as any agreement to that effect would be inoperative.

On the other hand, it is clear that security measures may be ordered by the competent court where the substance of a case is subject to arbitration. If arbitration has yet to commence, security measures may still be applied for and ordered, but there is a requirement that arbitration be initiated within the period prescribed by law or by the court.

In the usual arrest/attachment cases, that period is thirty days from service of the relevant judgment on the respondent.

In Greece, arrests and other security measures are of a conservative nature and do not entitle the claimant to enforce against the debtor's assets. This means that the claimant has to obtain an enforceable instrument, i.e., a substantive judgment or arbitration award, a settlement agreement recorded in court minutes or in some form of public act which is enforceable under the law of the country of origin. Enforcement can then take place either through the judicial sale of the vessel or property attached for conservative purposes, or by liquidating the letter of guarantee lodged as security.