Germany - Chapter III.6 - Practitioner's Handbook On International Arbitration And Mediation - 3rd Edition

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 Germany
Patricia Nacimiento

As of 1998 Germany has undergone a substantial reform of its arbitration law,
which has been adapted to international standards. The new law is mostly based
on the UNCITRAL Model Law and dispenses with former provisions which had
proven to be an obstacle to the development of arbitration in Germany. The
reform has led to a significant increase in the number of arbitrations in
Germany, and in particular, the establishment of Germany as a situs for
international arbitrations. This chapter reviews the new German arbitration law
as set forth in Book Ten of the German Code of Civil Procedure
(Zivilprozessordnung, “ZPO”) as well as the Rules of the German Institution of
Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit e. V., “DIS”), the
leading German institution for both national and international arbitration.

Introduction: Arbitration in Germany

Since 1998, with the reform of the German provisions on arbitration,
arbitration in Germany has blossomed. Former obstacles have been
removed, and international arbitration has profited therefrom. The
improvement of Germany as a situs for arbitration was the express intent
of the legislature when enacting the new arbitration law.1

The case law of the last years shows the clear tendency to respect and
enforce the choice of parties to opt out of the judicial system in favor of
arbitration. And the scope of disputes subject to arbitration has grown
considerably to encompass numerous fields of law previously excluded
from arbitration.

The reform has facilitated court proceedings in support of arbitration;
the decisions of the courts reflect the intent to support arbitral tribunals
and their decisions and to limit the courts’ intervention mainly to
assistance, thus restricting the scope of judicial control.

Moreover, a general competence of the Higher Regional Courts
(Oberlandesgericht) for any arbitration related issues was established.
These are the usual courts of second instance, thus ensuring a certain
specialization in and concentration of arbitration matters. In some courts,
there are even specialized chambers with exclusive competence for
arbitration matters. In all cases, both court costs and attorneys’ fees are
predictable because they are based on statutory fees calculated in
accordance with the amount in dispute. Furthermore, German law provides
for the award of statutory court and attorneys’ fees to the prevailing party.

Chapter III.6
Germany
Dr. Patricia Nacimiento*

SYNOPSIS

§ 6.01 Introduction: Arbitration in Germany

§ 6.02 Arbitration Law in Germany
[1] German Code of Civil Procedure, Book Ten
[2] International Arbitration Conventions to which
Germany is a Party
[a] The New York Convention on the Recognition and
Enforcement of Foreign Arbitral Awards
[b] European Convention on International Commercial
Arbitration
[c] The Washington Convention on the Settlement of
Investment Disputes between States and Nationals of
other States (ICSID Arbitration)
[d] Bilateral Treaties

§ 6.03 Conciliation and Mediation

§ 6.04 Institutional and Ad Hoc Arbitration in Germany
[1] Institutional Arbitration
[a] Deutsche Institution für Schiedsgerichtsbarkeit e. v.
(DIS)
[b] Other Institutions
[i] Frankfurt Stock Exchange
[ii] Court of Arbitration of the Hamburg Chamber
of Commerce (Schiedsgericht der
Handelskammer Hamburg)
[iii] German Maritime Arbitration Association
(Vereinigung für deutsche Seeschiedsgerichtsbarkeit)
[iv] Permanent Court of Arbitration of the Lawyers’
Association Frankfurt (Ständiges Schiedsgericht
der Rechtsanwaltskammer Frankfurt am Main)
[v] Various Other Institutions for Different
Commodities
[2] Ad Hoc Arbitration in Germany

§ 6.05 Commencing an Arbitration
[1] Arbitrability
[a] Objective Arbitrability
[b] Subjective Arbitrability
[c] Relevant Examples of Arbitrable Fields of Law
[i] Corporate Disputes
[ii] Antitrust Law
[iii] Investment Services and Financial Futures
Transactions
[iv] Patents
[v] Enforcement of Civil Judgment
[d] Fields of Law Excluded From Arbitration
[2] The Arbitration Agreement
[a] Form
[i] Separate Agreement or Arbitration Clause
[ii] Other Forms of Communication / Electronic Data
[iii] Reference in another Contract
[iv] Consumer Contracts
[v] Arbitration Agreements as Part of a Legal Act
that Requires Notarization
[vi] Other Forms
[b] Cure of Formal Errors
[c] Contents of the Agreement
[d] Multi-party Arbitration
[e] Arbitration Agreements in Articles of Incorporation
[i] Partnerships
[ii] Corporations
[f] Arbitration Agreements in General Terms and
Conditions of Trade
[i] Arbitration Agreements with a Consumer
[ii] Arbitration Agreements between Entrepreneurs
[g] Assignment of the Contract/Succession
[h] Separability/Procedural Defense
[3] The Arbitral Tribunal
[a] Composition of an Arbitral Tribunal
[b] Nationality of the Arbitrators
[c] Qualification of the Arbitrators
[i] Legal Restrictions
[ii] Lawyers or Other Experts as Arbitrators
[iii] Judges or Civil Servants as Arbitrators
[d] Appointment of the Arbitrators
[e] Challenge of Arbitrators
[i] Predominance of a Party in Selecting the
Arbitrators
[A] Grounds
[B] Challenge Procedure
[ii] Impartiality and Independence
[A] Grounds
[B] Challenge Procedure
[iii] Incapacity
[iv] Competent State Court
[v] DIS Rules

§ 6.06 Applicable Law
[1] Applicable Procedural Law
[2] Applicable Substantive Law

§ 6.07 The Arbitration Proceedings
[1] General Rules
[2] Place of Arbitration
[3] Language of the Arbitration
[4] Statement of Claim
[5] Agreement on Written or Oral Proceedings
[6] Oral Hearing and Taking of Evidence
[a] Oral Hearing
[b] Taking of Evidence
[i] Witness Testimony
[ii] Documentary Evidence / Discovery
[c] Experts
[7] Waiver of Objections
[8] Default of a Party

§ 6.08 Specific State Court Proceedings in Support of or in Relation to Arbitration
[1] Prohibition to Initiate Arbitration
[2] Interim Measures of Protection
[3] Proceedings Based on Documents Only: Trial by the
Record and Summary Bill Enforcement Procedure
[4] Summary Proceedings for Recovery of Debt or
Liquidated Amount (Mahnverfahren)

§ 6.09 The Award
[1] Form and Content of an Award
[2] Costs
[3] Effect of an Award
[4] Correction, Interpretation, and Amendment of
an Award
[5] Arbitral Award on Agreed Terms

§ 6.10 Recourse against an Award
[1] Application for Setting Aside
[2] Grounds for Setting Aside
[a] Grounds to Be Asserted by the Party
[i] Defective Arbitration Agreement
[ii] Denial of Fair Hearing
[iii] Lack of Jurisdiction of the Arbitral Tribunal
[iv] Procedural Defects
[A] General Requirements
[B] Improper Composition of the Arbitral
Tribunal
[C] Procedural Irregularities
[b] Grounds to be Reviewed by the Court Ex Officio
[i] Lack of Arbitrability
[ii] Conflict with Public Policy
[3] Time Limit for Application
[4] Competent Courts
[5] Consequences of Setting Aside the Award

§ 6.11 Recognition and Enforcement of Arbitral Awards
[1] Domestic Awards
[2] Foreign Awards
[3] Procedure in Court Proceedings
[4] Provisional Measures of Enforcement before Recognition

Patricia Nacimiento is a Partner in the Frankfurt office of Norr Stiefenhofer Lutz She appears as counsel or arbitrator in international arbitrations held under the rules of many leading institutions, such as ICC, LCIA, AAA, Swiss Chamber of Commerce, Stockholm Chamber of Commerce, Danish Arbitration Institute. As a member of the ICC Commission on Arbitration, She is a member of a task force on the development of directives for the involvement of experts in international arbitrations. In addition, she lectures on arbitration at the universities of Frankfurt am Main and Heidelberg.