Arbitration

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

Beyond the written form described in article 2 of the New York Convention of 1958, German law also accepts:

  • an exchange of telefaxes or other means of telecommunication that provide a record of the agreement;
  • a document containing an arbitration agreement, which summarises an oral agreement between the parties and which was transmitted from one party to the other party and against which no objection was raised in good time by such other party, if all involved parties are merchants, companies or commercial partnerships; or
  • the issuance of a bill of lading, if it expressly refers to an arbitration clause in a charter party.

Stricter rules apply with respect to arbitration agreements to which a consumer is a party.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

It is mandatory that:

  • the parties must be treated equally; in particular, a court can be requested to intervene if the arbitrator appointment procedure as originally agreed among the parties is unfavourable to one of the parties to the extent that it violates public policy. Therefore, German courts do not accept if one party has already fixed the name of the single arbitrator in its general terms and conditions;
  • the parties must be given full opportunity to present their case; and
  • it is prohibited to exclude that the parties may be represented by counsel.
Award

When and in what form must the award be delivered?

There are no statutory time limits for rendering an award.

The award shall be made in writing and signed by the arbitrator or arbitrators (the signatures of the majority is sufficient, if the reason for any omitted signature is stated).

The award shall state the reasons upon which it is based, unless otherwise agreed by the parties. The award shall state its date and the place of arbitration.

Appeal

On what grounds can an award be appealed to the court?

An award cannot be appealed to the courts, but it may be set aside for the grounds also set out in article V New York Convention of 1958:

  • invalid arbitration agreement;
  • violation of due process;
  • unauthorised excess of authority;
  • improper composition of arbitral tribunal and violation of procedural arbitration rules;
  • no arbitrability of subject matter; and
  • violation of public policy such as EU antitrust law.

Matter jurisdiction is with the higher regional court. Its decision can be appealed to the Federal Court of Justice.

Enforcement

What procedures exist for enforcement of foreign and domestic awards?

If no more favourable treaty applies, Germany recognises and enforces all foreign arbitral awards according to the New York Convention 1958, irrespective of the country of origin. US awards granting punitive damages are regarded as contrary to German public policy and, therefore, unenforceable.

Domestic awards must be declared enforceable. The competent higher regional court will refuse enforceability and set aside the award if one of the grounds therefore exists.