GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
1. General 1.1 Prevalence of Arbitration
Large-scale infrastructure and construction projects, often linked with the aforementioned energy transition, frequently give rise to arbitration proceedings due to their scale and complexity. Germany’s export-driven economy has also led to sustained international arbitration activity in its manu - facturing sector, particularly the automotive industry, as well as in the healthcare industry. This is due to the fact that Germany is home to many global players in these sectors. 1.3 Arbitration Institutions In Germany, the most commonly used arbitral insti - tutions for international arbitration are the German Arbitration Institute (DIS) and the International Cham - ber of Commerce (ICC). The DIS is well respected for its neutrality, efficiency and modern arbitration rules, which were last revised in 2018 to align with international best practices. It is frequently chosen in disputes involving at least one domestic party. The ICC is especially popular for high-value or complex cross-border disputes. Apart from these, German par - ties also regularly use the Swiss Arbitration Centre, the Vienna International Arbitration Centre (VIAC), and, in investment arbitration, the International Centre for Settlement of Investment Disputes (ICSID). 1.4 National Courts Section 1062 of the German Code of Civil Procedure (ZPO) governs the jurisdiction of courts in relation to various arbitration-related disputes. It specifically assigns competence to the higher regional courts ( Oberlandesgerichte ) for decisions concerning: • the appointment, challenge or removal of arbitra - tors; • the granting of interim relief; and • the recognition, enforcement or annulment of arbi - tral awards. Where the arbitration is seated in Germany, the higher regional court specified in the arbitration agreement – or, in the absence of such designation, the court in the district where the seat is located – has jurisdiction over the following:
International arbitration is a well-established and widely recognised method of resolving commercial disputes in Germany, particularly in a cross-border context. While state courts – especially in purely domestic matters – continue to play a central role, German parties are regularly turning to arbitration when dealing with complex, international and/or par - ticularly sensitive disputes. Even in a purely domestic context, arbitration (often ad hoc) is commonly used (eg, in shareholders’ agreements). This is especially true when contracting with foreign partners and seeking a flexible form of dispute reso - lution with decisions enforceable worldwide. In such cases, arbitration is often agreed upon in the contract as the preferred dispute resolution mechanism. Germany is a popular seat of arbitration, most often in disputes where at least one of the parties is Ger - man, but also occasionally in disputes with two for - eign parties. As a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and with an arbitra - tion law based on the 1985 UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”), Germany is considered an arbitration- As an industrialised, globally-connected economy, Germany has seen significant international arbitration activity in most, if not all, industries. This has been especially marked in the energy, construction and infrastructure, manufacturing (including automotive) and healthcare sectors. friendly jurisdiction. 1.2 Key Industries Germany’s energy transition and its role in the broader European decarbonisation strategy have led to a surge in disputes related to renewable energy projects, grid expansion and regulation, and long-term supply con - tracts, as well as investment protection claims under international treaties. Russia’s full-scale invasion of Ukraine has also led to many disputes in this sector, for instance regarding gas supply and gas pricing.
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