Browse

This chapter addresses the legal framework applicable to proceedings before arbitral tribunals seated in Germany. On this basis, it first discusses the typical structure and frequent steps of arbitral proceedings. Regarding the initiation of arbitral proceedings, German law follows a three-step model consisting of: request for arbitration, constitution of the arbitral tribunal and initial pleadings by claimant (statement of claim) and respondent (statement of defence). German ad-hoc proceedings usually contain few mandatory formalities for the request for arbitration. Pursuant to the ZPO, its minimum contents are designation of the parties, designation of the subject matter of the dispute, and reference to the applicable arbitration agreement. The chapter concludes by examining a wide range of special situations, highlighting the steps taken by the German Institute of Arbitration (DIS) during events such as multi-party arbitration, as well as issues of fraud, money laundering, and corruption.

This chapter examines the arbitral tribunal which resolves dispute by way of arbitration. It discusses the number of arbitrators, the procedure of appointing arbitrators, the selection of arbitrators, the challenge, termination of the office and replacement of arbitrators, as well as the arbitrator agreement — a topic that has more attention in Germany than in other jurisdictions. The study is important as the arbitral tribunal is one of the most important strategic steps in any arbitration. In most cases, the parties and their counsel to believe that picking the right panel is a preeminent precondition for achieving the desired outcome. The chapter describes how under German law, the principles of independence and impartiality of an arbitration are non-derogable cornerstones of any arbitral proceedings. Essentially, they form part of the German procedural ordre public which are considered indispensable constitutional requirements in order for arbitral proceedings to be equivalent to state court litigation.

This chapter explores the arbitration agreement from a variety of perspectives, first looking at the required content and the validity of an arbitration agreement. As an agreement, it is subject to grounds before invalidity and, once found valid, subject to interpretation. In order to qualify as an arbitration agreement, it must relate to a dispute within a defined legal relationship and must provide for arbitration for binding conflict resolution. The chapter then outlines the scope, effects, and issues of the termination of an arbitration agreement. Under German practice, the personal scope of the arbitration agreement extends to its parties, and in certain limited circumstances, it may also extend to third parties. The chapter concludes with typical additional contents of arbitration agreements, in particular with regard to the place of arbitration, the language of the proceedings, the selection of the applicable substantive law, and the selection ad hoc or institutional arbitration.

This introductory chapter presents a brief overview of the practice of commercial arbitration in Germany against the background of German state court litigation. The term ‘commercial’ here refers to arbitration related to civil law disputes between parties and public international law (especially investment treaty-based) arbitration on the one hand and consumer arbitration on the other hand. Historically, the tradition of arbitration in Germany has its roots in the 1879 version of the Zivilprozessordnung (ZPO), which remained substantially unchanged up until 1997 when it was reformed in order to adapt it to the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration of 1985 with the intention to strengthen the attractiveness of Germany as a locale for international arbitration. The chapter also explores the advantages and disadvantages of arbitration compared to German state court litigation, and discuss special types of arbitration and means of alternative dispute resolution.