GERMANY Law and Practice Contributed by: Tanja Pfitzner, Fabian von Schlabrendorff and Niklas-Arne Hecht, Pfitzner Legal
13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration The German arbitration law is set out in the Tenth Book of the Code of Civil Procedure, which is modelled after the UNCITRAL Model Law. The arbitration law is based on the key principles of a successful arbitration – ie, party autonomy, and fair and efficient arbitral proceedings. Parties can contractually agree that any institu- tional or other rules may also apply to the con- duct of the arbitration. The DIS offers a set of rules (DIS Rules) recognising and implementing internationally developed standards. Germany is a member state to the New York Convention 1958, the ICSID Convention, and other important international treaties. Especially the New York Convention 1958 allows for easy and efficient recognition and enforcement of foreign arbitral awards within the German legal system. 13.2 Subject Matters Not Referred to Arbitration In general, any claim involving an economic interest is arbitrable under German law, as are non-economic claims if the subject matter of the dispute can be settled. Only a few subject mat- ters cannot be referred to arbitration, such as criminal law matters, employment law disputes, certain aspects of family law such as divorce or the custody of minors, and disputes regarding tenancy relationships for residential accommo- dation in Germany. 13.3 Circumstances to Challenge an Arbitral Award An arbitral award generally has the same final effect as a court judgment (res judicata). It can
only be challenged under certain circumstances, which resemble Article V of the New York Con- vention and Article 34 of the UNCITRAL Model Law. These grounds for challenge are: • a party’s incapacity to conclude an arbitration agreement; • the invalidity of arbitration agreement; • a violation of the right to be heard; • the subject matter is beyond the scope of the arbitration agreement; • a failure in the composition of the arbitral tribunal; • the subject matter is not arbitrable (see 13.2 Subject Matters Not Referred to Arbitration ); and • the recognition or enforcement of the award would lead to a result contrary to public policy (ordre public). The party seeking to challenge the arbitral award must file its request within a period of three months after having received the award, or within the time limit agreed by the parties. The court deciding on the challenge of the arbitral award cannot modify the award but can only set it aside or dismiss the request. Under appropri- ate circumstances the court can remit the case to the same arbitral tribunal for a new decision. 13.4 Procedure for Enforcing Domestic and Foreign Arbitration Domestic arbitral awards can be enforced under the Code of Civil Procedure upon application to the competent higher regional court. The request is not bound to any specific time limit, but to cer- tain formal requirements. In principle the court decides upon the enforceability without an oral hearing by order. However, if the opposing party challenges the award, either by raising grounds for setting aside the award or objections that came into existence after the arbitral proceed-
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