Counterclaim in arbitration: jurisdiction and scope of the arbitration clause

A counterclaim in arbitration does not fall within the tribunal’s jurisdiction merely because arbitration between the parties is already pending. The decisive questions are the defined legal relationship, the wording of the arbitration clause and the particular counterclaim. A set-off may raise the same issue if it goes beyond a pure defence to the claim.

Section 581 ZPO requires an agreement concerning defined or definable disputes. Section 592 ZPO addresses the tribunal’s power to rule on its own jurisdiction and the point at which an objection must be raised. Those rules must be read together with the relief sought, the facts and the applicable procedural rules.

This article explains how to distinguish counterclaims, set-off and jurisdiction. It focuses on Austrian arbitration and, where an institutional proceeding is involved, the VIAC Vienna Rules.

What a counterclaim in arbitration requires

A counterclaim is an independent request by the respondent against the claimant in the same arbitration. It therefore goes beyond saying that the claim is unfounded. The tribunal must be able to identify a separate claim and the legal relief sought in relation to it.

Under Article 9 of the Vienna Rules, claims by the respondent against the claimant may be raised as counterclaims in the same proceedings. Articles 7, 10 and 11 apply to counterclaims. This concerns the information required for the relief sought, registration and the conditions for transmitting the file to the tribunal.

The institutional possibility of filing a counterclaim does not itself establish jurisdiction. The arbitration agreement must cover the particular counterclaim. The complete contractual chain and the relationship between the parties therefore need to be reviewed before the pleading is filed.

How the scope of the arbitration clause is assessed

Section 581 ZPO permits the parties to submit all or individual disputes arising from a defined contractual or non-contractual legal relationship to arbitration. The question is therefore not merely whether an arbitration clause exists. The relevant issue is which legal relationship it identifies and whether the counterclaim arose from it.

A counterclaim under the same contract is more likely to fall within the clause where it concerns the same performance, accounting mechanism or contractual breach. A claim under a separate contract remains a separate jurisdictional question. Commercial connection can assist interpretation, but it does not automatically replace the agreed connection.

The portal page on reviewing an arbitration clause provides the starting framework. For the counterclaim, also identify whether it is based on contract, statute, accounting, restitution or another factual and legal foundation.

Why factual connection and party intention matter

A factual connection is a practical indicator, not an independent jurisdictional rule. The closer the claim and counterclaim are to the same contractual performance and facts, the more precisely their common subject matter can be assessed. A connection through a business relationship or corporate group is not automatically enough.

Party intention must also be identified from the text and contractual context. A clause covering disputes arising from one contract does not automatically cover every claim between the same companies. Framework agreements, individual orders, amendments and incorporated terms may lead to different results.

If the counterclaim arises under another contract, the pleading should identify the relevant clause expressly. If there is no separate arbitration agreement, assess whether the demand can be used only as a defence or whether separate proceedings are required.

When jurisdiction must be challenged

Under section 592(1) ZPO, the arbitral tribunal decides on its own jurisdiction. Under subsection 2, an objection that the tribunal lacks jurisdiction must be raised no later than with the first pleading on the merits. Appointment of an arbitrator or participation in the appointment does not by itself prevent the objection.

If the objection concerns an individual counterclaim or request exceeding the tribunal’s authority, it must be raised as soon as that matter is made the subject of a claim for relief. A later objection risks being barred. The tribunal may admit a late objection only where the delay is sufficiently excused.

The article on a late jurisdiction objection in arbitration addresses the general duty to object. In a counterclaim case, also record when the counterclaim was filed, amended or first linked to another contract.

How set-off and counterclaim are connected

A set-off may initially be raised as a defence against the claim. That is different from seeking an independent award for an amount exceeding the claim or for another form of relief. In the second situation, the counterclaim requires the same kind of focused review as an independent claim.

The label set-off is therefore not decisive for jurisdiction. The pleading should state the legal basis and amount of the counterclaim, whether it is used only up to the amount of the claim and whether an award for an excess is sought. Unclear relief makes it harder to assess jurisdiction and to respond to the case.

Section 597 ZPO requires the relief and the facts supporting it to be presented within the period agreed by the parties or set by the tribunal. The parties may submit or identify relevant evidence. Amendments and additions remain possible in principle unless the tribunal rejects them as late.

What VIAC and expedited proceedings add

Under the VIAC Rules, the tribunal may return a counterclaim to the Secretariat for separate proceedings if the parties are not identical or if a counterclaim submitted after the answer would substantially delay the main proceedings. The claimant must be given an opportunity to answer an admitted counterclaim.

In expedited proceedings under Article 45 of the Vienna Rules, counterclaims and set-off claims are admissible only until the time limit for the answer to the statement of claim expires. A counterclaim developed later cannot simply be treated like a complete counterclaim filed at the outset.

Unless the parties agree otherwise, the applicable version of the Vienna Rules is generally determined by the commencement of the proceeding. For proceedings commenced from 1 January 2025, the version of 1 January 2025 applies. The clause and procedural record remain decisive in the individual case.

Which documents are needed for the review

The initial review should include the complete arbitration agreement, main contract, amendments, individual orders and incorporated terms. Add the request for arbitration, statement of claim, answer, draft or filed counterclaim and all procedural orders.

Arrange the documents chronologically. Mark when the counterclaim was first mentioned, when it was quantified and when it was presented as independent relief or as set-off. In a VIAC case, add the applicable Vienna Rules, Secretariat communications and deadlines for the answer.

The article on a valid arbitration agreement that does not cover the dispute explains the broader scope question. The page on preparing arbitration proceedings helps structure the next procedural steps.

Frequently asked questions about counterclaims in arbitration

Is a counterclaim automatically covered by the same arbitration clause?

No. The counterclaim must fall within the arbitration agreement. The defined legal relationship, wording of the clause, contractual chain and relief sought are decisive.

When must jurisdiction be challenged in relation to a counterclaim?

The objection generally must be raised no later than with the first pleading on the merits. If a later counterclaim exceeds the tribunal’s authority, the objection should be raised as soon as that request for relief is made.

Is set-off the same as a counterclaim?

Not necessarily. Set-off may serve only to defeat or reduce the claim. If the respondent seeks an independent award or an amount exceeding the claim, the counterclaim must be assessed as independent relief.

Next step

Contract, arbitration clause, correspondence and deadlines should be collected. It can then be assessed whether negotiation, preservation or arbitration is central.