GERMANY Law and Practice Contributed by: Daniel Engel, Antonia Hösch, Mathäus Mogendorf and Viola Sailer-Coceani, Hengeler Mueller
to protect privacy or business confidentiality. Nota- bly, proceedings before the commercial courts may be conducted confidentially if the parties so agree. 2.6 Interim Relief German civil procedure provides two main forms of interim relief in commercial disputes: the request for writ of seizure ( dinglicher Arrest ), which serves to secure monetary claims by freezing the debtor’s assets, and interim injunctions ( Einstweilige Verfü- gung ), which protect non-monetary claims, such as ordering a party to cease certain conduct or to main- tain the status quo (see 6.1 Availability of Interim Relief ). In both cases, the applicant must demonstrate a substantive claim and urgency by way of prima facie evidence ( Glaubhaftmachung ). Interim relief is widely used in Germany. Orders may be issued swiftly and sometimes without a prior hearing. 2.7 Final Relief In German commercial litigation, key types of final relief include claims for performance ( Leistungskla- gen ), including claims for payment or specific per- formance, declaratory claims ( Feststellungsklagen ) to confirm legal rights or obligations, and constitutive claims ( Gestaltungsklagen ), which modify or terminate legal relationships. 2.8 Damages Damages are generally assessed under the principle of full compensation ( Grundsatz der Naturalrestitution , Section 249 BGB), aiming to restore the injured party to the position they would have been in had the harm- ful event not occurred. Courts consider actual loss, lost profits, and consequential damage, provided it is foreseeable and sufficiently certain. Non-pecuni- ary damages are only awarded in cases specifically provided for by law, most notably for personal injury. Importantly, German law does not recognise punitive damages; damages are strictly limited to compensate for the injured party’s losses.
recognises and enforces international awards under the New York Convention. Typical fields of application include post-M&A, energy, and construction disputes. 3.2 Restrictions on Use of Arbitration Notable limitations to arbitrability include certain dis- putes in labour law and certain residential tenancy disputes. Arbitration agreements in respect of dis- putes relating to certain investment services are valid only if both parties are merchants ( Kaufleute ). Further, disputes concerning defective corporate resolutions are arbitrable only subject to specific requirements, for which the main arbitral institution in Germany, the DIS, provides Supplementary Rules for Corporate Dis- putes. 3.3 Advantages of Arbitration Arbitration is often favoured by corporate parties because of the possibility to choose party-appointed decision makers, who may be more familiar with cer- tain types of transactions or documentation than state court judges. Arbitration is also selected for confiden- tiality and procedural efficiency, in particular the pos- sibility to agree upon streamlined procedural rules that are fit-for-purpose. 3.4 Disadvantages of Arbitration Perceived disadvantages include that costs and speed are not in all cases more beneficial than in liti- gation, limited recourse against erroneous awards, the need to resort to enforcement through state courts, and the inability to involve third parties who are not bound by the arbitration agreement. With respect to the latter perceived disadvantage, the DIS has recent- ly implemented a set of Supplementary Rules for Third Party Notices which can be included in the arbitra- tion agreement by way of reference and which allow the issuance of third-party notices ( Streitverkündung ) under certain circumstances. 3.5 Arbitral Institutions The most important arbitral institutions in Germany are the DIS and the ICC. 3.6 Length of Proceedings No overall statistics exist, but the DIS indicates an average duration of approximately 12 to 18 months. For complex disputes, two years or more should be
3. Arbitration 3.1 Prevalence
Arbitration is well established as a dispute resolu- tion mechanism in Germany, and Germany broadly
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