GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
• appointing arbitrators (Sections 1034 and 1035 ZPO), ruling on challenges (Section 1037) or termi - nating an arbitrator’s mandate (Section 1038 ZPO); • determining the admissibility of arbitration (Section 1032 (2) ZPO) and confirming the arbitral tribunal’s jurisdiction (Section 1040 ZPO); • issuing interim measures (Section 1033 ZPO) and providing judicial assistance for evidence-taking or other acts the arbitral tribunal cannot perform itself (Section 1050); • enforcing, modifying or setting aside interim meas - ures issued by the arbitral tribunal (Section 1041 ZPO); and • setting aside arbitral awards (Section 1059 ZPO) or declaring them enforceable or not enforceable in Germany (Section 1060 et seq ZPO). German arbitration law is set out in Sections 1025 to 1066 of the ZPO. It is based on the UNCITRAL Model Law, but differs in several respects. By way of example: • Applicability of German arbitration law: Ger- man arbitration law governs both domestic and cross-border arbitration proceedings – whether commercial or otherwise – provided the arbitra - tion is seated in Germany (Section 1025 (1) ZPO). In contrast, the UNCITRAL Model Law is limited to international arbitration (Article 1). • Early determination of “arbitrability”: Section 1032 (2) ZPO enables parties to request a German court to decide on the admissibility of arbitration before the arbitral tribunal is constituted. This mechanism allows for an early judicial determination of jurisdic - tional issues, a feature not found in the UNCITRAL Model Law. 2. Governing Legislation 2.1 Governing Law • Interim relief by arbitral tribunals: Under Section 1041 ZPO, arbitral tribunals seated in Germany are empowered to grant interim measures. This provision mirrors Article 17 of the UNCITRAL Model Law. However, the 2006 amendments to the UNCITRAL Model Law go further by elaborating on interim measures and introducing provisions on
preliminary orders (Articles 17-17J), which are not fully reflected in German law. • Arbitration defence in court proceedings: Simi - lar to Article 8 (1) of the UNCITRAL Model Law, Section 1032 (1) ZPO allows a party to invoke an arbitration agreement as a defence when court proceedings are initiated. However, the German provision mandates that the court must declare the action inadmissible, whereas the UNCITRAL Model Law instructs courts to refer the parties to arbitra - tion. This distinction means that German courts are required to conduct a full examination of the arbitration agreement’s validity and scope, unlike courts in jurisdictions that apply only a prima facie review. • Judicial assistance: Section 1050 ZPO, inspired by Article 27 of the UNCITRAL Model Law, grants German courts the authority to assist arbitral tribunals not only in taking evidence but also in performing other judicial acts that require coercive powers. Notably, this assistance is available even when the arbitration is seated outside Germany, whereas the UNCITRAL Model Law limits such support to arbitrations seated within the jurisdic - tion. Additionally, Section 1050, sentence 3 ZPO – without a counterpart in the UNCITRAL Model Law – explicitly grants arbitrators the right to participate and ask questions in evidentiary proceedings con - ducted by state courts. 2.2 Changes to National Law On 26 June 2024, the German Federal Ministry of Jus - tice introduced a legislative proposal aimed at updat - ing the national arbitration framework (the “Draft Bill”). This initiative, designed to modernise procedural rules and align more closely with international standards, was progressing through the legislative process. How - ever, the reform efforts were interrupted due to the dissolution of parliament following early elections in February 2025. As a result, the bill is not expected to be enacted in the immediate future. Nonetheless, if the proposal is revived during the current legisla - tive term and ultimately passed, it would bring several significant innovations to the existing legal regime, including: • recognising the jurisdiction of the English-speaking Commercial Courts in arbitration-related matters;
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