Arbitration News – Supreme Court Supports Validity of Award Upholding Amended Claim
(Article by Dr. A. Tsavdaridis, published in the Arbitration Newsletter of the ILO on February 7, 2013)
he Supreme Court recently held that amended claim or counterclaim in
international arbitration is admissible, provided that a series of requirements –
pertaining to the parties’ agreement, the tribunal’s permission and fundamental
principles of justice – are met. A request for preventive protection, even for future
disputes that are conditional on the occurrence of a certain event, is not groundless,
provided that future disputes fall within the scope of the arbitration agreement.
Facts
The Organisation for Economic Reconstruction of Enterprises (OERE), a Greek state–
controlled entity active in the 1980s and 1990s, nationalised a paper mill company
whose shares were subsequently sold to a holding company. The share purchase
agreement between OERE and the holding company contained an arbitration clause
providing that any dispute or difference arising out of or in connection with the share
purchase agreement would be finally resolved through binding arbitration in Athens
under the International Chamber of Commerce (ICC) Rules of Arbitration. The Greek
state (as legal successor to OERE after it was wound up) and the holding company
resorted to arbitration over a series of claims and counterclaims arising out of the
share purchase agreement. The holding company raised a counterclaim for more than
€13 million for various costs that were to be borne by OERE under the share purchase
agreement. The holding company amended its counterclaim on March 23 2008 and
requested payment of the amount claimed to the paper mill company instead, after the
Greek state had disputed its right to request payment for itself. The Greek state replied
to the amended counterclaim on April 2 2008 and the arbitral tribunal issued its award
on April 4 2008, awarding approximately €12 million to the paper mill company.
The Greek state sought partially to set aside the arbitral award before the Athens Court
of Appeal based on various grounds, including that:
l an impermissible amendment of the counterclaim had taken place that led to a
decision on matters beyond the scope of the submission to arbitration; and
l one of the disputes on which the arbitral tribunal had issued a declaratory decision
was not a future dispute, but rather a conditional dispute that had not yet arisen;
thus, the tribunal lacked jurisdiction to hear it.
The appeal court dismissed the motion to set aside the award, and the Greek state
appealed to the Supreme Court.
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