GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
ognition and enforcement of foreign arbitral awards in Germany are governed directly by the Convention. 12.2 Enforcement Procedure To initiate enforcement proceedings in Germany, the applicant must submit a written application or make a formal declaration at the court registry (Section 1063 (4) ZPO). The application must be accompanied by the arbitral award or a certified copy thereof (Section 1064 (1) ZPO). Unlike the stricter documentary requirements under Article IV of the New York Convention, German courts apply the more liberal standard permitted by Article VII(1), meaning that a translation, typically of the dispositive part, is submitted in practice, though not strictly required. German courts may refuse enforcement on any of the grounds listed in Article V of the New York Convention (ie, for invalidity of the arbitration agreement, lack of proper notice or inability to present one’s case, excess of jurisdiction, irregular composition of the arbitral tribunal or procedure, award not yet binding or set aside, subject matter not arbitrable under German law, or recognition or enforcement would be contrary to ordre public ). The Federal Court of Justice (12 January 2023, I ZB 33/22) has given up its previous position and found that Section 110 (1) ZPO providing for security for costs applies to the recognition and enforcement pro - ceedings by analogy. Additionally, awards rendered in the form of a consent award (ie, awards on agreed terms) in foreign arbi - tral proceedings are enforceable under Section 1061 ZPO, as confirmed by the Bavarian Superior Court (20 November 2023, 102 Sch 173/23e). The Federal Court of Justice (9 March 2023, I ZB 33/22) has held that a foreign court’s refusal to annul an award does not preclude German courts from inde - pendently assessing enforceability. Where set-aside proceedings are pending at the seat, German courts may suspend enforcement proceedings in accord - ance with Article VI of the New York Convention. This discretionary power is exercised on a case-by-case basis, taking into account the likelihood of annulment and the interests of procedural efficiency.
Under German law, a state or state entity may only invoke sovereign immunity successfully if the enforce - ment measure would interfere with sovereign (as opposed to commercial) activity. The burden lies with the state to demonstrate that the act in question quali - fies as acta iure imperii. The Higher Regional Court ( Kammergericht ) of Berlin (4 June 2012, 20 Sch 10/11) ruled on the sovereign immunity defence in enforcement proceedings and established that states have no general immunity in enforcement proceedings. In particular, the state waives its sovereign immunity when concluding an arbitration agreement to the extent of the agreement. 12.3 Approach of the Courts German courts adopt a pro-enforcement stance towards arbitral awards, both domestic and foreign. In practice, the grounds for refusing recognition and enforcement under Article V of the New York Con - vention are interpreted narrowly. German courts have frequently declined to find that a defence exists, even in cases where foreign courts have exercised discre - tion to deny enforcement. In the enforcement context, only violations of international public policy (those that offend Germany’s most fundamental legal principles) will justify refusal. In particular, German courts adopt a strict interpretation of the prohibition of judicial review of the merits of an arbitral award by state courts ( révi- sion au fond ). Where a party invokes a defence under Article V(1) of the New York Convention, German courts may still assess whether the same facts give rise to a viola - tion of procedural public policy under Article V(2)(b) of the New York Convention. This is particularly relevant in cases involving the absence of a valid arbitration agreement or a breach of the right to be heard. 13. Miscellaneous 13.1 Class Action or Group Arbitration Group or class action arbitration is not explicitly reg - ulated under German arbitration law. Arbitration is typically individual, and multiparty arbitration typically requires specific agreement by all parties involved.
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