LIECHTENSTEIN Law and Practice Contributed by: Christoph Bruckschweiger, Benedikt König, Philipp Benda and Magdalena Marxer-Friedrich, paragraph 7
account; in cases of slight negligence, only the posi- tive damage is granted. A distinction is also made between different types of damage. Property damage ( Vermögensschaden ) includes positive damage (loss in value) and lost profits. Non-pecuniary (immaterial) damage refers to impairments not measurable in money, such as pain and suffering or invasion of privacy. The court may freely estimate damages when proving the exact amount is difficult. In such cases: • The claimant only needs to allege the damage, not prove the exact amount. • The estimation must be based on concrete indica- tions and reasonably justified (eg, on an expert opinion). As outlined in 1.2 Choice of Dispute Resolution Method , there is a strong affinity in Liechtenstein for conducting proceedings before arbitral tribunals. Contracting parties, as well as founders of founda- tions and settlors of trusts, value arbitration as a forum for private dispute resolution by expert judges. This preference is rooted in the desire for specialised legal expertise and the confidentiality provided by the arbi- tral process. 3.2 Restrictions on Use of Arbitration In Liechtenstein, any claim involving economic inter- ests that falls under the jurisdiction of the state courts can generally be referred to arbitration, including most corporate law disputes. However, certain matters such as the valid establishment or dissolution of a legal entity, as well as family law claims and appren- ticeship contracts, are strictly non-arbitrable. While arbitration is mandatory for foreign law trusts established in Liechtenstein and widely permitted for domestic trusts and foundations, supervisory meas- ures regarding foundations remain under the manda- tory jurisdiction of the Princely Court of Justice. Fur- thermore, specific formal requirements must be met 3. Arbitration 3.1 Prevalence
for arbitration agreements in labour and consumer law to ensure the protection of the typically weaker party. 3.3 Advantages of Arbitration The primary advantages of arbitration as a dispute resolution mechanism (as noted in 1.2 Choice of Dis- pute Resolution Method ) include strict confidentiality and the flexibility of the procedural framework. Par- ties also value the opportunity to appoint specialised experts as arbitrators and the reduced duration of proceedings compared to traditional litigation. Furthermore, the international enforceability of arbitral awards remains a decisive factor for choosing arbitra- tion in cross-border disputes. 3.4 Disadvantages of Arbitration Among the principal disadvantages of arbitration as a dispute resolution mechanism are its comparatively high costs. Arbitral tribunals typically charge on an hourly basis, and Liechtenstein arbitration law pro- vides, in cases of doubt, for a three-member tribu- nal. Consequently, arbitrators’ fees may effectively be incurred threefold. In addition, parties are generally required to make advance payments on costs, which may constitute a barrier to commencing or pursuing proceedings. Furthermore, the options for challenging an arbitral award are limited. As a rule, an arbitral award is final, and no ordinary legal remedy comparable to an appeal is available. The only available recourse is to bring an action before the courts to set aside the award. However, the law recognises only limited grounds for setting aside an award, namely serious procedural or substantive defects, such as violations of public policy (ordre public), an invalid arbitration agreement, or lack of arbitrability. 3.5 Arbitral Institutions Liechtenstein does not possess its own institutional- ised arbitration court. However, the legal framework allows for proceedings to be conducted under insti- tutionalised rules. The Liechtenstein Arbitration Asso- ciation provides a local procedural framework through the “Liechtenstein Rules”. If the parties declare them applicable, the proceedings are conducted under the
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