Austrian Supreme Court On Third-Party Funding And The Right To Be Heard

In a recent decision rendered on 15 December 2021,¹ the Austrian Supreme Court (Oberster Gerichtshof, OGH) examined different grounds for setting aside an arbitral award. The OGH reiterated its almost 70-year-old jurisprudence on the right to be heard as a ground for setting aside an arbitral award and made a surprising statement that third-party funding is generally admissible in Austria. This is the OGH's first definite statement on the admissibility of third-party funding despite an existing ban on contingency fee arrangements (quota litis arrangements) in section 879(2)(2) of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB).

Facts of the Dispute

The setting aside proceedings before the OGH arose out of an arbitration administered by the Vienna International Arbitral Centre. The arbitral tribunal had decided on damage claims arising out of a share purchase transaction between a Chinese and a Croatian party as claimants and two Croatian parties