GERMANY Law and Practice Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
erative AI, which are generally subject to domestic regulations rather than the EU framework. Against this backdrop, choice-of-law clauses will prove to be highly relevant, with disputes before Ger- man courts revolving around whether the claim in question is covered. 3. Arbitration in Insurance Disputes 3.1 Recognition of Arbitration Clauses Germany is a highly developed venue for arbitration proceedings. The German legal framework for arbi- tration reflects the UNCITRAL Model Law. Accord- ingly, German courts generally recognise and uphold arbitration clauses in both insurance and reinsurance contracts. The prerequisites are stipulated under Sec- tions 1030 and 1031 of the ZPO, according to which the parties essentially must have entered into an arbitration agreement that may also be established through consensual reference to (re)insurance terms and conditions. Strict formal requirements apply only in the case of private consumer insurance, meaning that arbitration plays virtually no role in this area. 3.2 Enforcement of Arbitral Awards Both domestic and foreign arbitral awards are enforced in Germany following a declaration of enforceability or recognition by a state court. In this process, gov- erned by Section 1059 of the ZPO, there is generally no substantive review of the arbitral award; rather, only a review for certain fundamental legal violations – such as the absence of a valid arbitration clause, a lack of impartiality on the part of arbitrators, or violations of public policy ( ordre public ) – takes place. The recogni- tion of foreign arbitral awards is governed by the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards and implemented into Ger- man statutory law by section 1061 ZPO. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration proceedings are generally conducted con- fidentially, and arbitral awards are not published. For this reason, there are no official statistics on the fre- quency of arbitration in insurance matters.
While the statutory legal framework in Germany does not provide for a general confidentiality obligation in arbitration proceedings, confidentiality obligations regularly arise from the (re)insurance contracts them- selves or from the arbitration and arbitrator agree- ments. The ability to challenge arbitral awards before the state courts is, in turn, limited to the rare cases of fundamental legal violations (see 3.2 Enforcement of Arbitral Awards in the context of enforceability), meaning that arbitration proceedings in insurance matters rarely become publicly known through this avenue either. General market observation nevertheless shows that disputes arising from reinsurance contracts, if not resolved amicably, are almost without exception settled by way of arbitration. In direct insurance, the opposite is true: arbitration is the exception, and tends to be found in modern lines of business, such as W&I or D&O insurance, rather than in traditional lines such as property or business and product liability insur- ance. 4. Coverage Disputes 4.1 Evolving Trends in Coverage Disputes Following an intensive phase of coverage disputes in the aftermath of the COVID-19 pandemic that has now significantly subsided, the young insurance lines of cyber insurance before state courts and W&I insur- ance before arbitral tribunals play a particularly promi- nent role. Given continuing economic challenges, the same applies to coverage disputes in D&O insurance, especially in insolvency scenarios. In addition, cov- erage disputes within the context of natural catas- trophes are also increasingly arising, particularly with regard to the perils of storm, hail, and floods/heavy rainfall. 4.2 Policy Wordings and Interpretation Developments As a matter of principle, Germany subscribes to the subjective theory of contract interpretation accord- ing to which regard must be given to the true inten- tions of the parties when they entered into a contract.
130 I NSURANCE L I T IGATI O N 2026
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