Arbitration

Legal framework

Arbitration proceedings in Germany are, in principle, governed by the provisions of Section 1025 et seq. of the German Code of Civil Procedure ("ZPO"). In 1998, these provisions were revised and adapted to the rules of the UNCITRAL Model Law on International Commercial Arbitration. Thus, arbitration proceedings in Germany comply with international standards and best practices.

In accordance to Section 1042 ZPO, parties are subject to a few mandatory provisions specified by the ZPO, and are free to determine the arbitration proceedings themselves. They usually do so by agreeing to a pre-formulated set of rules offered by national and international arbitration institutions. In case of disagreement to the rules, the proceedings are governed by Section 1025 et seq. ZPO.

The role of state courts is very limited in German arbitration proceedings. According to Section 1026 ZPO, state courts shall not intervene in arbitration proceedings. Examples of exceptional circumstances where state courts intervene and / or offer additional support include; requests for compulsory measures, interim relief, annulment and / or the enforcement of arbitral awards.

In principle, arbitral awards are final and binding. They can only be annulled by a state court in exceptional circumstances. Since the jurisprudence of German courts is arbitration-friendly, an annulment of an award by a German court is highly unusual.

If the losing party does not comply with the award, the winning party may apply to the state court for a declaration of enforceability of the arbitral award. If the place of enforcement is in Germany, German courts are utilised. In accordance with Sections 1060 and 1061 ZPO, German courts will enforce both national and foreign arbitral awards. In this respect, German law and jurisprudence fully complies with international standards and best practices.