OGH on Arbitration Clauses in Multi-Party Agreements

Jun 4, 2026 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has recently examined the effect of formal deficiencies or defects in the power of attorney associated with an arbitration agreement, specifically regarding how such issues impact individual contracting parties as well as their implications for other parties to a company purchase agreement.

The present case concerned a share purchase agreement involving the acquisition of the entire shareholding in a limited liability company (GmbH), which incorporated an arbitration clause specifying Vienna, Austria, as the seat of arbitration.

The claimant, previously the majority shareholder and seller of shares, initiated proceedings against the defendant, the purchaser, seeking payment of a retained portion of the purchase price. This retention applied solely to the segment of the purchase price allocated to the claimant. Notably, there were seven additional sellers involved in the transaction.

Rather than commencing arbitration proceedings, the claimant initiated a legal action in the state court. The claimant contended that the arbitration clause was wholly invalid, asserting it had not been properly executed with regard to specific co-sellers due to formal deficiencies and the absence of a specific power of attorney. Additionally, as several sellers were consumers, the claimant argued that the arbitration agreement could not be applied to future disputes.

Nevertheless, the OGH affirmed the court of appeal’s judgment, determining that state courts lacked jurisdiction. The ruling was principally based on the presence of a valid arbitration agreement between the claimant and the defendant. Deficiencies attributable to other sellers were deemed not to have an immediate or automatic impact.

The key consideration in this context was the differentiation between a ‘single party to the dispute’ and the mere joinder of parties based on the merits. Established case law maintains that an arbitration clause is invalid with respect to other contracting parties only when there is a necessary joinder of parties, and inconsistent judgments must be strictly avoided. In the present matter, however, the OGH determined that the claims of the individual sellers were legally independent. Each seller bore separate liability; moreover, the claim regarding payment of the retention sum pertained solely to the claimant.

OGH 4 Ob 200/25b (26 March 2026)