GERMANY Law and Practice Contributed by: Patricia Nacimiento, Catrice Gayer, Lara Panosch and Theo Pauthonier, Herbert Smith Freehills Kramer LLP
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 arbitra - tion rules are silent (Section 1042 (4)). In any case, the arbitral tribunal always has to ensure equal treatment of the parties and the right to be heard (Section 1042 (1) ZPO). An arbitral tribunal’s breach of a procedural agreement made by the parties can lead to the annul - ment of an award (Federal Court of Justice, in the Flex - n - Gate v GEA decision). 7.3 Powers and Duties of Arbitrators Under German arbitration law, arbitrators are sub- ject to various duties aimed at ensuring impartiality, procedural fairness and effective case management. These obligations are primarily set out in statutory provisions, for instance: • Section 1036 (1) ZPO requires arbitrators to be impartial and independent, and to disclose any circumstances that may give rise to doubts regard - ing their impartiality. • Section 1042 (1) ZPO mandates equal treatment of the parties and guarantees their right to be heard. • Section 1054 ZPO requires arbitrators to render a reasoned award, stating the basis for their decision in fact and law. While confidentiality is not expressly regulated under German arbitration law, it has been recognised in case law and is reflected in institutional rules, such as Sec - tion 44 of the DIS Arbitration Rules. Section 1042 (4) ZPO grants the arbitral tribunal broad discretion to conduct the proceedings, on points where the parties have not reached a procedural agreement or where the arbitration rules are silent (see 7.2 Procedural Steps ).
7.4 Legal Representatives Legal representatives appearing in arbitration pro - ceedings with a German seat do not need to be licensed lawyers. This is also the case for many arbitration-related pro - cedures in front of state courts, such as applications for the recognition and enforcement of arbitral awards, set-aside proceedings, or even the appointment of an arbitrator: parties may submit motions or make declarations for the record at the court registry with - out a lawyer, provided that no oral hearing has been scheduled yet. 8. Evidence 8.1 Collection and Submission of Evidence German arbitration law provides a flexible framework for the collection and presentation of evidence, with no codified rules governing discovery, disclosure or privilege. Instead, the procedural rules are bespoke. Evidentiary rules are shaped by party agreement, the arbitral tribu - nal’s discretion (in particular, the special/supplemen - tary procedural rules contained in the first procedural order the tribunal issues), the nature of the dispute and the legal background of the parties. The IBA Rules on the Taking of Evidence in International Arbitration (2020) are used as non-binding guidelines. However, in particular, if German or in general parties from civil jurisdictions are involved, discovery and cross-exami - nation are not necessarily the default rule (see below). Document production is not a default feature of Ger - man-seated arbitrations. In domestic proceedings, it is generally the exception. In international arbitra - tions involving German parties or governed by Ger - man law, there is a discernible trend away from broad document production. Whether production is agreed or ordered depends largely on the parties’ legal and cultural backgrounds and procedural expectations. Notably, German arbitral tribunals are not strictly bound by the principle of party-led production and may investigate facts ex officio (Higher Regional Court Frankfurt, 25 March 2021, 26 Sch 18/20). That docu - ment production is not considered the default rule is
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