GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
• clarifying the enforceability of interim measures issued by foreign arbitral tribunals, including crite - ria for rejecting enforcement applications; • permitting arbitral tribunals to publish anonymised versions of awards, subject to party consent; • enabling arbitral awards to be issued in electronic form; • allowing dissenting and separate opinions to be included in awards; • introducing a new procedural remedy for set - ting aside awards based on criminal law grounds, inspired by the restitution and retrial mechanism in state-court litigation; and • providing a mechanism for court appointment of co-arbitrators in multiparty disputes when parties on one side fail to agree, and potentially appointing the opposing party’s arbitrator after consultation. Under the “most favourable law test” set out in Arti - cle VII(1) of the New York Convention, an arbitration agreement is enforceable under the laws of Germany if it satisfies the requirements of either German sub - stantive law or German conflict-of-law rules (Federal Court of Justice, 26 November 2020, I ZR 245/19). Pursuant to Section 1029 (1) ZPO, a valid arbitration agreement must: • reflect the parties’ intention to submit existing or future disputes arising from a defined legal relation - ship – contractual or otherwise – to arbitration. In practice, this also entails an express exclusion of state court jurisdiction; and • comply with the requirements of objective arbitra - bility (Section 1030 ZPO) and formal validity (Sec - tion 1031 ZPO). 3. The Arbitration Agreement 3.1 Enforceability An arbitration agreement that fails to meet these requirements is ineffective unless the defect is rem - edied under Section 1027, 1031 (6) or 1040 (2) ZPO, or the deficiency is immaterial. Additionally, if the parties proceed with arbitration without raising the defect, it is considered cured.
The arbitration agreement must be in writing, either signed by the parties or evidenced through written communications (eg, email) that document the agree - ment. It is not necessary for the arbitration agreement to specify procedural elements such as the seat of arbitration, the number of arbitrators, the applicable arbitration rules, or the language of the proceedings. Nonetheless, it is advisable for parties to address these aspects in the agreement to avoid procedural uncertainty. Where a contract refers to a separate document con - taining an arbitration clause, that clause becomes part of the contract unless the reference is timely and expressly objected to. 3.2 Arbitrability Under German procedural law, any dispute involving a financial or commercial interest is generally eligible for arbitration. This includes claims for monetary relief, as well as disputes touching on competition law or intellectual property rights. The notion of economic interest is interpreted broadly. Moreover, even matters lacking a direct financial component may be arbitrable if the parties are legally permitted to settle the dispute (Section 1030 (1) ZPO). However, there are statutory exceptions. For instance, disputes concerning the existence of residential leas - es within Germany fall outside the scope of arbitration (Section 1030 (2) ZPO). The arbitrability of patent-related issues – particularly in the context of licensing agreements – has sparked considerable debate. While the enforceability of pat - ent validity determinations remains contentious, Ger - man courts have acknowledged the arbitrability of certain IP-related claims, at least between the parties involved. For instance, the Regional Court of Munich I (25 May 2021, 21 O 8717/20) upheld the arbitrability of a claim involving the transfer of a contested European patent application, along with a related declaratory damages claim.
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