Comparative Guides
Welcome to Mondaq Comparative Guides - your comparative global Q&A guide.
Our Comparative Guides provide an overview of some of the key points of law and practice and allow you to compare regulatory environments and laws across multiple jurisdictions.
Start by selecting your Topic of interest below. Then choose your Regions and finally refine the exact Subjects you are seeking clarity on to view detailed analysis provided by our carefully selected internationally recognised experts.
Results: 4 Answers
International Arbitration
1.
Legal framework
1.1
What is the relevant legislation on arbitration in your jurisdiction? Are there any significant limitations on the scope of the statutory regime – for example, does it govern oral arbitration agreements?
 
Germany
The German rules governing arbitration are contained in the Tenth Book of the Code of Civil Procedure, Sections 1025 and following (the ‘German Arbitration Act’). An official English translation of the Code of Civil Procedure can be found at www.gesetze-im-internet.de/englisch_zpo/index.html.

Following the concept of the UNCITRAL Model Law on International Commercial Arbitration, the German Arbitration Act generally applies only to arbitral proceedings whose seat is located in Germany (Section 1025, paragraph 1 of the Code of Civil Procedure). By way of exception, some specific provisions are also applicable to foreign arbitral proceedings, such as those on the assistance of state courts pursuant to Section 1050 of the code. The enforcement of foreign awards is dealt with in Section 1061 of the code.

For more information about this answer please contact: Nicholas Kessler from Orrick
1.2
Does this legislation differentiate between domestic arbitration and international arbitration? If so, how is each defined?
 
Germany
In accordance with the UNCITRAL Model Law, the German Arbitration Act distinguishes between arbitration proceedings seated in Germany on the one hand and those with their seat abroad on the other. However, no distinction is made with regard to the nationality of the parties involved - that is, the German Arbitration Act does not distinguish between domestic arbitral proceedings involving German parties only and international arbitral proceedings involving foreign parties.

For more information about this answer please contact: Nicholas Kessler from Orrick
1.3
Is the arbitration legislation in your jurisdiction based on the UNCITRAL Model Law on International Commercial Arbitration?
 
Germany
The German Arbitration Act largely incorporates the UNCITRAL Model Law. However, some notable exceptions exist, including the following:

  • stricter formal requirements for the arbitration agreement – this must be concluded in written form, a requirement which is particularly strict where consumers are involved;
  • the right to request a decision from a national court on the admissibility of arbitration prior to the initiation of proceedings; and
  • greater power of state courts to enforce interim relief.

Further modifications of lesser importance include the following:

  • an obligation to apply the substantive law of the country with which the subject matter is most closely connected, in the absence of a choice of law clause;
  • the time limits for the initiation of annulment proceedings; and
  • an explicit provision that, unless the parties agree otherwise, the decision on the costs of the tribunal shall be based on the outcome of the proceedings.
For more information about this answer please contact: Nicholas Kessler from Orrick
1.4
Are all provisions of the legislation in your jurisdiction mandatory?
 
Germany
The German Arbitration Act provides for flexibility. Hence, many of its provisions can be modified by the parties by mutual agreement. Some notable examples of mandatory provisions concern:

  • waiver of the right to challenge the award (which cannot be excluded in advance); and
  • the tribunal’s obligation to treat the parties equally and to grant them the right to be heard.
For more information about this answer please contact: Nicholas Kessler from Orrick
1.5
Are there any current plans to amend the arbitration legislation in your jurisdiction?
 
Germany
There are no plans to amend the German Arbitration Act. The most recent change was enacted in 2013, when a provision was added recognising the conclusion of an arbitration agreement through bills of lading. However, the rules of the German Arbitration Association were recently revised with effect as of 1 March 2018.

For more information about this answer please contact: Nicholas Kessler from Orrick
1.6
Is your jurisdiction a signatory to the New York Convention? If so, have any reservations been made?
 
Germany
Germany has been a signatory to the New York Convention since 30 June 1961. It has made only one reservation: with respect to Article I, paragraph 1, and in accordance with Article I, paragraph 3 of the New York Convention, Germany will apply the convention only to the recognition and enforcement of awards made in the territory of another contracting state.

For more information about this answer please contact: Nicholas Kessler from Orrick
1.7
Is your jurisdiction a signatory to any other treaties relevant to arbitration?
 
Germany
Germany is also a signatory to numerous other international arbitration treaties, including:

  • the European Convention on International Commercial Arbitration;
  • the International Centre for Settlement of Investment Disputes Convention; and
  • the Energy Charter Treaty.

In addition to these multilateral agreements, Germany has concluded various bilateral treaties, mainly concerning trade relations or investment protection. Some of these also include certain arbitration-related regulations, which will generally prevail over the national provisions in case of any conflict (see Section 1064, paragraph 3 of the Code of Civil Procedure). However, the practical relevance of such cases is limited, since they will arise only where bilateral treaty contains norms that are even more favourable than those provided by the German Arbitration Act.

For more information about this answer please contact: Nicholas Kessler from Orrick
2.
Arbitrability and restrictions on arbitration
2.1
How is it determined whether a dispute is arbitrable in your jurisdiction?
 
Germany
As a general rule, all disputes relating to pecuniary claims are eligible for arbitration. Claims for non-pecuniary claims are arbitrable to the extent that they can be the subject matter of a settlement. For example, matrimonial and parenthood matters and similar matters are excluded from arbitration. In addition, residential tenancy disputes are generally non-arbitrable, as are most labour law disputes. Special legal requirements apply to actions for nullification or rescission of shareholders’ resolutions; however, these actions can, in principle, be referred to arbitration.

For more information about this answer please contact: Nicholas Kessler from Orrick
2.2
Are there any restrictions on the choice of seat of arbitration for certain disputes?
 
Germany
The German Arbitration Act does not provide for a specific seat of arbitration for certain disputes.

For more information about this answer please contact: Nicholas Kessler from Orrick
3.
Arbitration agreement
3.1
What are the validity requirements for an arbitration agreement in your jurisdiction?
 
Germany
In accordance with the written form requirement of Article 7, paragraph 2 of the UNCITRAL Model Law, German law provides that in order for an arbitration agreement to be valid, it must be contained either in a document signed by the parties or in an exchange of letters, telefaxes, telegrams or other means of communication which provides a record of the agreement.

In commercial transactions, if the arbitration agreement is contained in a document which was sent by one party to the other, the silence of the other party can be deemed as consent.

Stricter formal requirements apply if one of the parties is a consumer. In this case, the arbitration agreement must be contained in a separate document and must be signed by the parties personally (or electronically with a qualified electronic signature). These special formal requirements can be replaced by notarised form.

The arbitration agreement must further specify a dispute that is arbitrable (see above).

For more information about this answer please contact: Nicholas Kessler from Orrick
3.2
Are there any provisions of legislation or any other legal sources in your jurisdiction concerning the separability of arbitration agreements?
 
Germany
According to the doctrine of separability, the arbitration agreement on the one hand and the main contract on the other one must be treated as two separate contracts which are completely independent of each other. Consequently, the validity of the arbitration agreement is not affected by the invalidity, cancellation, modification or similar of the main contract. The German Arbitration Act fully adopts the separability doctrine; Section 1040, paragraph 1, sentence 2 of the Code of Civil Procedure even explicitly provides, in the context of the competence-competence principle, that “an arbitration clause is to be treated as an agreement independent of the other provisions of the agreement”.

For more information about this answer please contact: Nicholas Kessler from Orrick
3.3
Are there provisions on the seat and/or language of the arbitration if there is no agreement between the parties?
 
Germany
In the absence of any agreement by the parties as to the seat of the arbitration, the arbitral tribunal is competent to determine the seat, taking into account the circumstances of the case and the convenience of the parties (Section 1043, paragraph 1 of the Code of Civil Procedure). If all parties involved are German, the tribunal will not usually choose a seat outside of Germany without the parties’ prior consent.

Insofar as the language of the proceedings is concerned, Section 1045 of the Code of Civil Procedure provides that in the absence of a valid party agreement, the tribunal will determine the language of the arbitration.

For more information about this answer please contact: Nicholas Kessler from Orrick
4.
Objections to jurisdiction
4.1
When must a party raise an objection to the jurisdiction of the tribunal and how can this objection be raised?
 
Germany
Objections to the jurisdiction of the tribunal must be raised at the latest together with the statement of defence. A complaint that the tribunal is exceeding its powers must be made as soon as the matter in respect of which this allegation is made is discussed in the arbitration proceedings. However, in either case, the tribunal has the power to permit such an objection to be raised at a later point in time if the party raising it provides sufficient excuse for such delay.

If the tribunal confirms its own jurisdiction through an interim decision, the objecting party may file a challenge with the competent state courts within one month of receiving written notification of the interim decision. This time limit also applies to the challenge of a final award on the grounds that the tribunal did not have jurisdiction over the matter.

For more information about this answer please contact: Nicholas Kessler from Orrick
4.2
Can a tribunal rule on its own jurisdiction?
 
Germany
Pursuant to the doctrine of competence-competence, on which the German Arbitration Act is based, the tribunal has the power to decide on its own jurisdiction. It is also authorised to decide whether an arbitration agreement exists and is valid.

For more information about this answer please contact: Nicholas Kessler from Orrick
4.3
Can a party apply to the courts of the seat for a ruling on the jurisdiction of the tribunal? In what circumstances?
 
Germany
Before the tribunal is constituted, the parties may apply to the state courts to determine the admissibility of the arbitration proceedings. However, once the tribunal has been constituted, it has the primary competence to rule on its jurisdiction; the parties are confined to challenging the tribunal’s decision in this respect, depending on the type of decision that is taken. The state courts have the final say and can either uphold or reject the tribunal’s determination (see question 13).

The state courts may also address the question of the tribunal’s jurisdiction if the defendant in a lawsuit objects to the state court’s jurisdiction on the grounds that the dispute is subject to arbitration.

For more information about this answer please contact: Nicholas Kessler from Orrick
5.
The parties
5.1
Are there any restrictions on who can be a party to an arbitration agreement?
 
Germany
The German Arbitration Act in no way restricts the capability of a natural or legal person to agree to, and participate in, dispute resolution through arbitration, as long as that person has full legal capacity.

For more information about this answer please contact: Nicholas Kessler from Orrick
5.2
Are the parties under any duties in relation to the arbitration?
 
Germany
Once arbitration has been initiated, the parties are generally considered to be under an obligation to participate actively in the proceedings, but this obligation is not enforceable. In contrast, the predominant view at least acknowledges an (enforceable) obligation of the parties to pay an advance on the costs of the proceedings, the specific amount of which is determined by the arbitral tribunal.

The German Arbitration Act does not impose a general obligation on the parties to the arbitration to keep the arbitration and its contents confidential.

For more information about this answer please contact: Nicholas Kessler from Orrick
5.3
Are there any provisions of law which deal with multi-party disputes?
 
Germany
Even though multi-party arbitration is relatively common in Germany, the German Arbitration Act does not set out any specific rules on such proceedings. This can cause problems and inefficiencies when multi-party arbitrations are conducted under the statutory regime. In response to this situation, the German Arbitration Association introduced provisions on multi-party arbitration in its recently revised rules of arbitration, which entered into force as of 1 March 2018.

In this context, it is noteworthy that German law does not recognise the group of companies’ doctrine or any similar concept of law which would lead to the submission under arbitration of a party that at no point consented to opt out of the state court system.

For more information about this answer please contact: Nicholas Kessler from Orrick
6.
Applicable law issues
6.1
How is the law of the arbitration agreement determined in your jurisdiction?
 
Germany
The law applicable to the arbitration agreement is primarily determined by the parties’ agreement. Where the parties have failed to make an explicit stipulation to this effect, the applicable law is derived from the jurisdiction in which the arbitration has its seat. If the seat is in Germany, German substantive law will apply (see Section 1059, paragraph 2(c) of the Code of Civil Procedure). If the seat is in a different country, the substantive law of that country will govern the arbitration agreement for the purposes of enforcing the foreign award (see Section 1061, paragraph 1 of the Code of Civil Procedure, in connection with Article V, paragraph 1(a) of the New York Convention).

For more information about this answer please contact: Nicholas Kessler from Orrick
6.2
Will the tribunal uphold a party agreement as to the substantive law of the dispute? Where the substantive law is unclear, how will the tribunal determine what it should be?
 
Germany
The German Arbitration Act fully respects the principle of party autonomy, including with respect to the substantive law applicable to the dispute. It explicitly provides that the arbitral tribunal is to decide on the matter in dispute in accordance with the statutory provisions that the parties have designated as applicable to the legal dispute (Section 1051, paragraph 1 of the Code of Civil Procedure). Unless the parties have expressly agreed otherwise, the designation of the laws or legal system of a specific state is to be understood as a direct referral to the substantive law of that state, and not to its conflict of laws rules.

Where the parties have failed to determine the applicable substantive law, the tribunal is called to apply the substantive law of the state to which the subject matter of the proceedings has the closest ties.

For more information about this answer please contact: Nicholas Kessler from Orrick
7.
Consolidation and third parties
7.1
Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
 
Germany
No explicit provisions in the German Arbitration Act address the consolidation of separate arbitration proceedings. Consolidation is nevertheless considered to be permissible, but it requires the unanimous consent of all parties in all proceedings that are to be consolidated. Under no circumstances can separate arbitrations be consolidated against the will of one of the participating parties.

The arbitration rules of the German Arbitration Institution explicitly contemplate the consolidation of arbitration proceedings, but likewise require the consent of all parties involved.

For more information about this answer please contact: Nicholas Kessler from Orrick
7.2
Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
 
Germany
The German Arbitration Act does not address the joinder of additional parties. Failing an explicit prohibition in this respect, such a joinder is generally possible even once the proceedings have already commenced. However, it requires the explicit approval of all parties involved, including the tribunal. Only under this condition of mutual agreement can a new party effectively join (ongoing) arbitration proceedings.

For more information about this answer please contact: Nicholas Kessler from Orrick
7.3
Does an arbitration agreement bind assignees or other third parties?
 
Germany
Assignees of claims for which an arbitration agreement had been made by the assignor are likewise bound by the arbitration agreement. The same is generally true of legal successors and even insolvency administrators.

Beyond this, German law is extremely cautious about extending the effect of an arbitration agreement to third parties which are not signatories to the arbitration agreement. The ‘group of companies’ doctrine and similar concepts are widely rejected, both in legal commentary and in practice.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.
The tribunal
8.1
How is the tribunal appointed?
 
Germany
By default, the tribunal consists of three arbitrators. In this case each party will appoint one arbitrator and the two party-appointed arbitrators will then jointly nominate the presiding arbitrator. If the parties opt for a sole arbitrator, he or she will be nominated mutually by the parties. However, the parties are free to agree on a (lower or higher) number of arbitrators and the appointment procedure.

If one party, both parties or, as the case may be, the party-appointed arbitrators fail to nominate an arbitrator, the nomination will be made by the state court upon application. The state court must select a person who is impartial and independent and fulfils the qualifications that the parties may have defined in this regard.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.2
Are there any requirements as to the number or qualification of arbitrators in your jurisdiction?
 
Germany
With respect to the number of arbitrators, see question 24.

To be selected as an arbitrator, a person must be impartial and independent. However, he or she need not necessarily have a legal education or background. The only other limitation (apart from impartiality and independence) provided by law is that if, under the arbitration agreement, one party is entitled to a superior selection right, the other party can refer to the state courts for the selection process in order to ensure a level playing field between the parties.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.3
Can an arbitrator be challenged in your jurisdiction? If so, on what basis? Are there any restrictions on the challenge of an arbitrator?
 
Germany
An arbitrator can be challenged based on reasonable doubts as to his or her impartiality or independence. In addition, a party can have recourse to the state courts based on an arbitrator’s inactivity or on the absence of the qualifications agreed by the parties.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.4
If a challenge is successful, how is the arbitrator replaced?
 
Germany
Once an arbitrator has been successfully challenged and removed from the tribunal, the substitute arbitrator will be nominated under the same procedure which applied to the selection of his or her predecessor. The parties may agree on a different replacement procedure.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.5
What duties are imposed on arbitrators? Are these all imposed by legislation?
 
Germany
The arbitrators are obliged to do everything necessary to resolve the dispute between the parties. In this context, they must consider all aspects of the matter and materials that could be relevant to the outcome of the arbitration. If an award is challenged before the state court, it is an arbitrator’s duty to comply with the clarification of all facts that could lead to the challenge.

These are all contractual obligations which are agreed through the arbitrator’s contract with the parties. The German Arbitration Act itself sets out no statutory duties of arbitrators.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.6
What powers does an arbitrator have in relation to: (a) procedure, including evidence; (b) interim relief; (c) parties which do not comply with its orders; (d) issuing partial final awards; (e) the remedies it can grant in a final award and (f) interest?
 
Germany
(a) Procedure, including evidence?

In the absence of an agreement by the parties to this effect, the tribunal is free to conduct the proceedings in the manner which it deems appropriate. In doing so, it must ensure that the parties are treated equally and given sufficient opportunity to present their case.

Unlike the courts, arbitrators are not limited to hearing certain types of evidence. Hence, it is possible for the tribunal to have the parties testify as witnesses or to order the cross-examination of witnesses (which is not permitted in German state court litigation).

(b) Interim relief?

Once the tribunal has been constituted, it has the power to grant interim relief or to order conservatory measures. However, unlike state courts, tribunals do not have the power to enforce such relief. This requires the involvement of the state courts.

This is why parties often revert to the state courts for interim relief and conservatory measures. Notwithstanding the arbitral agreement, the state courts remain competent to grant such relief before and during the arbitration proceedings.

(c) Parties which do not comply with its orders?

The tribunal has no power to enforce compliance with its orders, but it can draw adverse inferences from non-compliance. For instance, if a party fails to abide by a fixed deadline, the tribunal may sanction such behaviour by treating the submission and the assertions made therein as delayed and hence precluded (see question 30). Furthermore, the tribunal may take into consideration any obstructions of the arbitration when deciding on the allocation of costs.

(d) Issuing partial final awards?

The tribunal can issue partial awards at any point during the proceedings. Such awards have final and binding character as to their subject. If the character of the decision is not final, a partial award may not be issued.

(e) The remedies it can grant in a final award?

Just as in litigation before the German courts, the arbitrators are bound by the procedural principle of ne ultra petita - that is, they cannot grant other remedies than those formally sought by the parties. Hence, the tribunal is bound not only in terms of quantity, but also in terms of quality when deciding which remedies to grant to which party. Otherwise, there are no general limitations with respect to the types of relief that a tribunal can grant, as opposed to a state court.

(f) Interest?

The German Arbitration Act does not provide for special legal grounds to grant interest. In most cases, interest is awarded on a substantive law basis (eg, delay damages; late payment). It is highly disputed if, in the absence of such a substantive law basis, the tribunal may award procedural interest by analogy to Section 104 of the Code of Civil Procedure.

For more information about this answer please contact: Nicholas Kessler from Orrick
8.7
How may a tribunal seated in your jurisdiction proceed if a party does not participate in the arbitration?
 
Germany
The tribunal is competent to sanction a party that culpably does not participate in the arbitration. In this context, the German Arbitration Act provides that if the claimant fails to file its claim in due time, the tribunal shall terminate the proceedings. This decision has no blocking effect - that is, the same matter can still be resolved through another arbitration. If the defendant fails to respond to the claim within the specified timeframe, the tribunal may continue the proceedings without treating this fact as an admission of the claims.

However, since the negative consequences will affect a party’s constitutional right to be heard, the tribunal should be - and in practice usually is - rather cautious in sanctioning non-participation. Even though the German Arbitration Act contains provisions that might force the tribunal to sanction a non-participating party (eg, by treating a belated submission as precluded), at least in situations of grave delay, the tribunal must also appreciate the opposing party’s interest in the speedy resolution of the dispute.

In any event, if the tribunal decides to sanction non-participation, it should pay regard to the following considerations:

  • The timeframes for action must be calculated on reasonable grounds;
  • The non-compliance must not be excused by adequate grounds;
  • The consideration of the late submission must objectively lead to a delay in the resolution of the dispute; and
  • The delay must not have been caused by an inadequate procedure of the tribunal.
For more information about this answer please contact: Nicholas Kessler from Orrick
8.8
Are arbitrators immune from liability?
 
Germany
Arbitrators are not immune from liability. Even though the German Arbitration Act contains no special provisions in this respect, the arbitrators are bound by the contractual obligations they entered into with the parties and, in the case of institutional arbitration, with the institution. Any violation of these duties can lead to damage claims. However, most of these contracts or institutional rules provide for a certain limitation of the arbitrators’ liability; and even where such disclaimers are missing, it is widely acknowledged that an arbitrator should bear no stricter liability than a state court judge, so that the arbitrator’s judgment is not biased for fear of personal liability. Against this background, in the overwhelming majority of cases, the potential liability of an arbitrator is practically limited to criminal acts, such as an intentional miscarriage of justice.

For more information about this answer please contact: Nicholas Kessler from Orrick
9.
The role of the court during an arbitration
9.1
Will the court in your jurisdiction stay proceedings and refer parties to arbitration if there is an arbitration agreement?
 
Germany
Claims lodged before the state courts will be declared inadmissible and dismissed if they are subject to a valid arbitration agreement and the respondent objects to litigation on these grounds. In this case, both the claimant and the defendant are free to file for arbitration.

For more information about this answer please contact: Nicholas Kessler from Orrick
9.2
Does the court in your jurisdiction have any powers in relation to an arbitration seated in your jurisdiction and/or seated outside your jurisdiction? What are these powers? Under what conditions are these powers exercised?
 
Germany
During ongoing arbitration proceedings, the state courts have an auxiliary role. Regardless of whether the seat of the arbitration is inside or outside of Germany, the state courts have the power to order interim or conservatory measures regarding the subject matter of the arbitration. They may also provide judicial assistance on the application of either party or the tribunal itself, including, for instance, the summoning of a witness who did not appear before the tribunal.

Other powers of the German state courts are reserved to arbitrations seated within Germany, such as the appointment of substitute arbitrators, challenges to arbitrators and the annulment and enforcement of arbitral awards.

The German courts are also competent to declare foreign awards enforceable within the territory of Germany.

For more information about this answer please contact: Nicholas Kessler from Orrick
9.3
Can the parties exclude the court's powers by agreement?
 
Germany
The freedom of the parties to exclude the courts’ powers is limited. Most of the provisions which deal with the state courts’ powers (eg, annulment, challenges) are considered mandatory.

For more information about this answer please contact: Nicholas Kessler from Orrick
10.
Costs
10.1
How will the tribunal approach the issue of costs?
 
Germany
If the parties have agreed upon certain rules regarding the allocation of costs, the tribunal will be bound by, and will decide in accordance with, those rules. Otherwise, the tribunal will determine the costs that each party to the dispute must bear - including the amount that was necessary in order to present the party’s case - by taking into account the circumstances of the case, and in particular the outcome of the proceedings (Section 1057, paragraph 1 of the Code of Civil Procedure). The default position under the German Arbitration Act is that costs follow the event, so the losing party must generally reimburse the winning party for its legal costs.

For more information about this answer please contact: Nicholas Kessler from Orrick
10.2
Are there any restrictions on what the parties can agree in terms of costs in an arbitration seated in your jurisdiction?
 
Germany
The parties are free to agree not only on the procedure, but also on the criteria for the allocation of costs. There are no explicit limitations provided by the German Arbitration Act.

For more information about this answer please contact: Nicholas Kessler from Orrick
11.
Funding
11.1
Is third-party funding permitted for arbitrations seated in your jurisdiction?
 
Germany
The German Arbitration Act neither restricts nor prohibits third-party funding for arbitration proceedings. There has been some debate on the permissibility of third-party funding, but the prevailing view advocates such funding.

For more information about this answer please contact: Nicholas Kessler from Orrick
12.
Award
12.1
What procedural and substantive requirements must be met by an award?
 
Germany
An award must be rendered in written form and signed by the arbitrator(s). If the tribunal consists of more than one member, the signatures of the majority of the arbitrators are sufficient, as long as the reasons for the lack of the other signature(s) are explained. Furthermore, an award must usually contain the reasons for the decision, except for awards on agreed terms (cf Section 1053 of the Code of Civil Procedure) or where the parties have agreed otherwise. The award must also indicate its date, as well as the seat of the arbitration. A signed version of the award must be served upon each party.

For more information about this answer please contact: Nicholas Kessler from Orrick
12.2
Must the award be produced within a certain timeframe?
 
Germany
There is no mandatory time limit for rendering an award.

For more information about this answer please contact: Nicholas Kessler from Orrick
13.
Enforcement of awards
13.1
Are awards enforced in your jurisdiction? Under what procedure?
 
Germany
Arbitral awards, both foreign and domestic, must be declared enforceable by the German state courts in order to be executed within the German territory.

For domestic awards (issued in Germany), the enforcement procedure is set out in Section 1060 of the Code of Civil Procedure and requires an application by the award creditor to the higher regional courts. Enforcement must be denied if the award debtor can show the existence of any of the grounds for annulment set out in Section 1059, paragraph 2(1) of the Code of Civil Procedure; or if the state court, proprio motu, determines that any of the grounds for annulment as per Section 1059, paragraph 2(2) of the Code of Civil Procedure are present. The grounds for annulment must be disregarded if they have already been bindingly dismissed at the time the application for enforcement is made or, with respect to the grounds for annulment set out in Section 1059, paragraph 2(1) of the Code of Civil Procedure, if the timeframe for annulment has expired.

With respect to the enforcement of foreign awards (issued outside of Germany), the German Arbitration Act refers to the New York Convention. The enforcement of foreign awards is therefore directly governed by these provisions. Just as in the case of a German award, the party seeking to enforce the award must apply in writing to the state court for a declaration of enforceability. Unlike the New York Convention, however, German procedural law does not necessarily require a German translation of the award; nor is it necessary to submit the parties’ arbitration agreement. However, the state courts often request a translation of the award, which is why it can be helpful and expeditious to present it with the application for a declaration of enforceability.

The state court will declare an award enforceable after giving the opposing party the opportunity to be heard.

For more information about this answer please contact: Nicholas Kessler from Orrick
14.
Grounds for challenging an award
14.1
What are the grounds on which an award can be challenged, appealed or otherwise set aside in your jurisdiction?
 
Germany
An award may be set aside by the court if the applicant can adduce sufficient proof (Section 1056, paragraph 2(1) of the Code of Civil Procedure) that:

  • one of the parties to the arbitration agreement did not have the legal capacity to submit itself under the applicable law governing such party’s legal status;
  • the arbitral agreement is invalid;
  • the award is based on improper procedure (eg, if one of the parties did not get the chance to defend its position);
  • the award goes above and beyond the substantive scope of the arbitration agreement; or
  • the formation of the tribunal or the proceedings as such did not comply with the German Arbitration Act or with a specific party agreement and such non-compliance influenced the outcome of the award.

The award may further be set aside if the court finds (Section 1056, paragraph 2(2) of the Code of Civil Procedure) that:

  • the subject matter of the award is not eligible for arbitration under German law; or
  • enforcement of the award would infringe German public policy.

According to the prevailing opinion, the parties cannot agree on additional grounds for annulment, because the list set out in Section 1056, paragraphs 2(1) and (2) of the Code of Civil Procedure is considered to be exhaustive.

For more information about this answer please contact: Nicholas Kessler from Orrick
14.2
Are there are any time limits and/or other requirements to bring a challenge?
 
Germany
The application to annul an arbitral award must be made within three months of receipt of the award.

For more information about this answer please contact: Nicholas Kessler from Orrick
14.3
Are parties permitted to exclude any rights of challenge or appeal?
 
Germany
The parties cannot waive their right to apply for an annulment in its entirety, as otherwise the review of the award by a state court would no longer be guaranteed. According to the prevailing opinion, the parties may waive only individual grounds for annulment as listed in Section 1059, paragraph 2(1) of the Code of Civil Procedure (but not those listed in Section 1059, paragraph 2(2)), and then only after receipt of the award and thus with full knowledge of the grounds for annulment.

For more information about this answer please contact: Nicholas Kessler from Orrick
15.
Confidentiality
15.1
Is arbitration seated in your jurisdiction confidential? Is a duty of confidentiality found in the arbitration legislation?
 
Germany
The German Arbitration Act contains no provisions addressing confidentiality issues. However, the parties are free to, and often do, establish mutual confidentiality on a contractual basis. Beyond this, it is widely acknowledged that arbitrators are under an implied general duty of confidentiality imposed upon them by their mandate.

For more information about this answer please contact: Nicholas Kessler from Orrick
15.2
Are there any exceptions to confidentiality?
 
Germany
The parties usually agree on exceptions to confidentiality.

For more information about this answer please contact: Nicholas Kessler from Orrick