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What legal requirements are there for recognition of an award? Must reasons be given for the award? Does the award need to be reviewed by any other body?
The award must be made in writing and signed by the arbitrators. Where more than one arbitrator is involved, the signature of the majority of all members of the tribunal will suffice, provided that the reasons for any omitted signature are stated (Section 1054(1) of the Code of Civil Procedure).
The award shall state the reasons on which it is based, unless the parties to the dispute have agreed that reasons need not be provided or that it is an award on agreed terms (Section 1054(2) of the code).
The award shall further state the date on which it was delivered and the venue of the arbitration proceedings (Section 1054(3) of the code).
The Arbitration Rules of the German Institution of Arbitration (see Section 34) and the Chinese European Arbitration Centre Rules (Article 43) foresee similar rules.
Timeframe for delivery
Are there any time limits on delivery of the award?
Under German law, there are no explicit time limits on delivery of the award. However, the tribunal shall render an award within a reasonable period (Section 33 of the German Institution of Arbitration Rules; according to Article 31A(1) of the Chinese European Arbitration Centre Rules, within nine months).
Does the law impose limits on the available remedies? Are some remedies not enforceable by the court?
The tribunal is to decide on the matter in dispute in accordance with the statutory provisions that the parties have designated as applicable to the subject matter of the dispute (Section 1051 of the Code of Civil Procedure). Therefore, the substantive law determines the remedies available in the arbitration proceedings. Although the parties are basically free to agree on remedies, any remedy must comply with the public order. In general, German law does not recognise the concept of punitive damages and punitive damages, at least in some cases, could thus be against the public order.
What interim measures are available? Will local courts issue interim measures pending constitution of the tribunal?
An arbitration agreement does not preclude the court from ordering, at the request of a party before or after arbitration proceedings have commenced, that interim measures be taken with regard to the subject matter of the dispute (Section 1033 of the code; Section 20(2) of the German Institution of Arbitration Rules and Article 26 of the Chinese European Arbitration Centre Rules).
Unless otherwise agreed by the parties, the tribunal may order, at the request of a party, provisional measures or measures to provide such security as it may consider necessary in respect of the subject matter of the dispute (Section 1041 of the code; Section 20(1) of the German Institution of Arbitration Rules and Article 26(6) of the Chinese European Arbitration Centre Rules).
Can interest be awarded?
This always depends on the substantive law. Interest can thus be awarded if the substantive law provides for interest and the claimant has claimed interest.
At what rate?
Again, the rate is subject to the substantive law.
Is the award final and binding?
The award is final and binding (Section 1055 of the Code of Civil Procedure).
What if there are any mistakes?
Only fundamental mistakes may lead to the unenforceability of the award.
Can the parties exclude by agreement any right of appeal or other recourse that the law of your jurisdiction may provide?
German mandatory arbitration law does not provide for an appeal, as the award is final and binding (Section 1055 of the Code of Civil Procedure). Therefore, an explicit exclusion is not necessary under German law.
What is the procedure for challenging awards?
Generally, only the procedure for recognition and enforcement (Section 1059 of the Code of Civil Procedure and New York Convention) allows for fundamental objections to be raised against the award in order to prevent its recognition.
On what grounds can parties appeal an award?
The law does not provide for the appeal of arbitral awards. The award is thus final and binding (Section 1055 of the Code of Civil Procedure). However, it is possible to agree to allow for an appeal within the arbitration proceedings, although this is not very common.
What steps can be taken to enforce the award if there is a failure to comply?
Enforcement proceedings can be initiated in the same manner as for court judgments.
Can awards be enforced in local courts?
How enforceable is the award internationally?
This depends on the rules of the foreign state in which the award will be enforced.
To what extent might a state or state entity successfully raise a defence of state or sovereign immunity at the enforcement stage?
In civil and commercial matters, the state has no immunity at the enforcement stage.
Are there any other bases on which an award may be challenged, and if so, by what?
Unless a challenge is possible under the applicable enforcement rules (eg, violation of public order), the award may not be challenged in Germany.
How enforceable are foreign arbitral awards in your jurisdiction?
This depends on the jurisdiction in which the award was rendered. Germany enforces awards under the New York Convention.
Will an award that has been set aside by the courts in the seat of arbitration be enforced in your jurisdiction?
Unless the foreign court decision setting aside the award has not been recognised and declared enforceable in Germany, the award can be subject to a recognition procedure in Germany.
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