GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
the parties may agree to exclude the arbitral tribunal’s authority to do so (Section 1041 (1) ZPO). Arbitral tribunals enjoy broad discretion in determining the nature and scope of interim relief (eg, attachment, preliminary injunctions), but they lack enforcement powers and cannot compel compliance on their own. To ensure enforceability, judicial assistance is required (Section 1041 (2) ZPO). When called upon to enforce such measures, German courts do not reassess the underlying merits of the case, in line with the prohibi - tion of judicial review on the merits ( révision au fond ). The validity of ex parte interim measures ordered by the arbitral tribunal remains controversial, but accord - ing to the prevailing view, they should be permissible under the same conditions that apply to state courts, including the obligation to grant a subsequent right to be heard to the affected party. 6.2 Role of Courts German courts are authorised to issue interim meas - ures both before and during arbitral proceedings, including in cases where the arbitration is seated out - side Germany, provided the court has international jurisdiction (Sections 1033 and 1025 (2) ZPO). Such relief may be granted ex parte and, depending on the urgency and circumstances, can be issued within 24 hours. Typical forms of interim protection include pre-award attachments to secure monetary claims, preliminary injunctions to preserve rights or prevent harm, and orders aimed at safeguarding or securing evidence. Where a party successfully demonstrates that the interim measure was unjustified from the outset, the applicant may be held liable for damages resulting from its enforcement (Sections 945 and 1041 (4) ZPO). German arbitration law does not forbid the use of emergency arbitrators, and decisions of emergency arbitrators will be considered like any other form of interim relief under Section 1041 ZPO. Accordingly, where interim relief is sought in Germany based on a decision rendered by an emergency arbitrator in an arbitration with a foreign seat, deviation from the requirements of Section 1041 ZPO, and, for ex parte
relief, the lack of subsequent hearing of the affected party, may pose a problem with the enforcement of the measures by German courts (see also 6.1 Types of Relief ). As emergency arbitrators are not treated differently than the remaining forms of interim relief under Sec - tion 1041 ZPO, courts may still intervene once an emergency arbitrator has been appointed. 6.3 Security for Costs German arbitration law does not expressly regulate the issue of security for costs. Consequently, if a party applies for such a security, the arbitral tribunal would have the power to grant it, to the extent allowed by the applicable arbitration rules. Section 110 (1) of the Code of Civil Procedure, which requires claimants domiciled outside the European Union or European Economic Area to furnish secu - rity for costs upon request in state courts litigation, extends to proceedings seeking the recognition and enforcement of arbitral awards. The Federal Court of Justice (12 January 2023, I ZB 33/22) has given up its previous position and established that Section 110 (1) ZPO applies by analogy to such proceedings. 7. Procedure 7.1 Governing Rules German arbitration law is set out in Book 10 of the ZPO, ie, in Sections 1025 to 1066. 7.2 Procedural Steps The procedural steps that must be followed are left to the agreement of the parties and to the arbitra - tion rules they decide to apply (Section 1042 (3)). The arbitral tribunal has broad discretion to conduct the proceedings on points where the parties have not reached a procedural agreement or where the arbi - tration rules are silent (Section 1042 (4)). In any case, the arbitral tribunal always has to ensure equal treat - ment of the parties and the right to be heard (Section 1042 (1) ZPO). An arbitral tribunal’s breach of a par - ties’ procedural agreement can lead to the annulment of an award (Federal Court of Justice, in the so-called Flex-n-Gate v GEA decision).
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