GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
in writing or by any means of communication that provides a retrievable record; • enabling arbitration-related court proceedings to be assigned to designated Commercial Courts and, where the applicable conditions are met, to be conducted entirely in English; • clarifying the enforceability of interim measures issued by foreign arbitral tribunals, including crite - ria for rejecting enforcement applications; • permitting arbitral tribunals to publish anonymised or pseudonymised versions of awards, subject to party consent, including deemed consent where no timely objection is raised; • enabling arbitral awards to be issued in electronic form; • permitting arbitrators to issue separate opinions, which do not form part of the award and are com - municated to the parties as a separate document; • introducing a new procedural remedy for setting aside awards after expiry of the ordinary set-aside period on narrowly defined grounds, including certain criminal offences, forged documents, the subsequent annulment of a judgment or award on which the award relied, or the discovery of an earlier final judgment or award in the same matter, 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, with the court also able, in appropriate cases, to take over the appointment of the arbitrator to be appointed by the opposing side.
A valid arbitration agreement must: • reflect the parties’ intention to submit existing or future disputes arising from a defined legal rela - tionship – contractual or otherwise – to arbitration (Section 1029 (1) ZPO). 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). 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).
3. The Arbitration Agreement 3.1 Enforceability
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).
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