GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
13.2 Ethical Codes Counsel and arbitrators who are registered as lawyers at a German bar association must follow the profes - sional and deontological obligations stipulated inter alia in the Federal Lawyers’ Act (BRAO) and in the Professional Code of Conduct for Lawyers (BORA). 13.3 Third-Party Funding German law does not prohibit third-party funding in arbitration proceedings seated in Germany. However, the involvement of a non-party funder may raise con - cerns regarding the confidentiality traditionally asso - ciated with arbitration. In this context, the legitimate interests of the opposing party must be duly consid - ered. To mitigate the risk of unauthorised disclosure, it is standard practice to require funders to enter into confidentiality agreements, thereby ensuring that sen - sitive information remains protected throughout the proceedings. 13.4 Consolidation German arbitration law does not contain express statutory provisions governing the consolidation of separate arbitral proceedings. Instead, the issue is typically addressed either through the parties’ arbi - tration agreement or by reference to the applicable institutional rules. For instance, Article 10 of the ICC Rules of Arbitration provides a framework for consolidation under specific conditions. Similarly, Section 8.1 of the DIS Arbitration Rules permits the consolidation of two or more arbi - trations conducted under the DIS Rules into a single proceeding, provided that all parties to the arbitrations concerned consent to the consolidation upon request.
13.5 Binding of Third Parties Under German arbitration law, the binding effect of an arbitration agreement or award is generally confined to the parties that have expressly consented to it, typi - cally the signatories of the agreement and their legal successors. However, there are limited circumstances in which third parties may also be bound. If the rights and obligations under a contract con - taining an arbitration clause are validly assigned, the assignee may also be bound by the arbitration agree - ment. This is based on an analogous application of Section 401 of the German Civil Code, which governs the transfer of claims. Regarding other third parties, the extension of an arbitration agreement to non-signatories must be assessed on a case-by-case basis, depending on the specific legal grounds for such inclusion. However, the Federal Court of Justice has made it clear that, as a rule, arbitration agreements do not extend beyond the original parties and their legal successors. In par - ticular, the so-called “group of companies doctrine” – which in some jurisdictions allows non-signatory affiliates within a corporate group to be bound – is not recognised under German arbitration law (9 March 2023, I ZB 33/22). German courts have the ability to bind foreign third parties to the same extent as German parties, to the extent that they are competent to act in arbitration matters pursuant to German arbitration law. Howev - er, the execution of these decisions may prove more challenging.
279 CHAMBERS.COM
Powered by FlippingBook