GERMANY Trends and Developments Contributed by: Tanja Pfitzner and Fabian von Schlabrendorff, Pfitzner Legal
within Germany – was sufficient. The Court thereby adopted an expansive approach to its extraterritorial reach in support of foreign-seated arbitrations. Nota - bly, neither a German seat nor the choice of German substantive law was deemed necessary. The Court emphasised that, as a matter of principle, the parties’ right of access to arbitration must be ensured despite the existence of sanctions. These proceedings are also noteworthy for their prag - matic approach to the procedural challenge of serving the Russian defendant. As service had to be affected in Russia, the Court initially sought to serve the docu - ments through official channels in accordance with the Hague Service Convention – without success. Given the lack of available alternatives under the Conven - tion, the Court resorted to service by public notice under Section 185 no. 3 ZPO. Pursuant to this provi - sion, service was deemed effective once the petition had been posted on the Court’s bulletin board for one month. Court Decisions Over the past years, the competent German courts have dealt with a wide range of arbitration-related matters. As in previous years, the most significant decisions continue to come from the Higher Regional Courts, which are responsible for setting aside and enforcing arbitral awards, and from the Federal Court of Justice ( Bundesgerichtshof ) at the appellate level. The case law reaffirms Germany’s arbitration-friendly legal environment, which recognises and – in many respects – actively supports arbitral proceedings. The Federal Court of Justice (I ZB 34/23) issued an important ruling on the requirements for an effec - tive arbitral award. In that case, the award had been signed by only two arbitrators. Beneath the name of the third arbitrator appeared a machine-written note: “Signature could not be obtained.” While the Frankfurt Higher Regional Court had declared the award invalid, ruling that it was a “non-award” for lack of adequate explanation regarding the missing signature, the Fed - eral Court of Justice held that the relevant provision in German arbitration law (Section 1054 ZPO) merely requires a statement explaining the absence of the signature, and not the underlying reasons for an arbi - trator’s refusal to sign. The Court emphasised that the
form requirements under German arbitration law are not intended to allow an obstructive arbitrator to block the issuance of a valid award. In a recent case (102 SchH 135/24e), the Highest Regional Court of Bavaria addressed the threshold for judicial review of an arbitrator’s conduct based on allegations of procedural impropriety. The Court held that only qualified procedural errors, such as arbitrary legal interpretations, that disadvantage one party may indicate bias. Mere procedural irregularities do not, in and of themselves, justify a challenge. Attempts to prevent the recognition and enforce - ment of foreign arbitral awards in Germany frequently involve claims of procedural or substantive viola - tions of public policy ( ordre public ). However, given the narrow scope of what is understood to constitute “international public policy” and the high threshold for establishing a violation of the right to be heard, such objections are rarely successful. In the past year, only one such challenge succeeded out of a large number of enforcement proceedings. The decisions handed down by the Federal Court of Justice and the Higher Regional Courts over the past year reaffirm the German judiciary’s continued commitment to recognise and enforce foreign arbitral awards, as well as its respect for arbitration agree - ments between commercially experienced parties. Among the key findings were the following: • The Federal Court of Justice (I ZB 37/23) held that the three-month time limit for challenging arbitral awards under Section 1059 (3) ZPO does not apply to foreign arbitral awards, due to the principle of sovereign equality among states. • In the same decision, the Court reaffirmed the prin - ciple of révision au fond , according to which state courts are prohibited from re-examining the merits of an arbitral award during enforcement proceed - ings. This includes alleged errors in the tribunal’s assessment of evidence. • In a further decision (I ZB 78/24), the Federal Court of Justice emphasised the arbitral tribunal’s discre - tion when evaluating the evidence and determining the quantum of damages.
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