Scope of application
The German law of arbitration is included as the tenth book (§§1025–1066) in the Code of Civil Procedure (Zivilprozessordnung – “ZPO”). It largely follows the structure and wording of the UNCITRAL Model Law of 1985 (the “Model Law”). The tenth book of the ZPO also contains provisions on recognition and enforcement of arbitral awards. The provisions regarding foreign arbitral awards are based on the New York Convention of 1958. The German (official) text of the tenth book of the ZPO is accessible on the internet at http://www.bundesrecht.juris.de/bundesrecht/zpo/gesamt.pdf. Private but reliable translations into English, French, Spanish, Russian and Mandarin are provided by the Deutsche Institution für Schiedsgerichtsbarkeit e.V. (DIS) at http://www.dis-arb.de A comprehensive commentary on the German law of arbitration was published in English by Wolters Kluwer in 2007 (“Arbitration in Germany – The Model Law in Practice”, ed. Böckstiegel; Kröll; Nacimiento, ISBN 978-90-411-2718-1).

The tenth book of the ZPO applies to all arbitrations that take place in Germany (§1025 (1). Certain provisions also apply if the place of arbitration is situated outside Germany or has not yet been determined. §1025 (1) is one of the few mandatory provisions of German arbitration law. Consequently, the parties cannot agree that an arbitration should be subject to the arbitration law of another country if the place of arbitration is situated in Germany. However, the parties are free to include individual provisions of foreign arbitration laws in their arbitration agreement.

§§1025–1066 apply to ad hoc arbitrations as well as to arbitrations administered by institutions such as the Deutsche Institution für Schiedsgerichtsbarkeit e.V. (DIS) – http://www.dis-arb.de – the International Court of Arbitration of the International Chamber of Commerce (ICC), the London Court of International Arbitration (LCIA) or the American Arbitration Association (AAA).

Party autonomy
The parties can agree on the procedure to be followed between themselves or by reference to the arbitration rules of the various arbitration institutions, provided there is no conflict with the few mandatory provisions of the tenth book of the ZPO. The following provisions are mandatory:

• §1025: application of the German law of arbitration to arbitration proceedings where the place of arbitration is in Germany;
• §1032: certain disputes concerning the jurisdiction of arbitral tribunals and the State Courts;
• §1034 (2): right of recourse to the State Courts if the arbitration agreement disadvantages one party in relation to the constitution of the arbitral tribunal;
• §1037 (3): right of appeal to the State Courts if the arbitral tribunal has rejected the challenge of an arbitrator;
• §1041 (2) and (3): enforcement of interim protective measures;
• §1042 (1): the parties have to be treated equally and shall be given a full opportunity to present their case; and
• §1042 (2): counsel may not be excluded from acting as authorised representative.

Restriction on intervention of the State Courts
§1026 provides that State Courts may only intervene in arbitration proceedings to the extent permitted by the tenth book of the ZPO. In keeping with the scheme of the Model Law, §1062 (1) enumerates those limited matters where State Courts are authorised or obliged to intervene:

• §1034: to provide assistance in establishing the arbitral tribunal, to remove and to replace arbitrators;
• §1032: to determine the admissibility of arbitration;
• §1040: to decide on applications regarding decisions of arbitral tribunals which confirm the arbitral tribunal’s competence;
• §1041: to enforce, set aside or amend an order for interim measures of protection issued by the arbitral tribunal; and
• §1059: to set aside an arbitral award, to declare an arbitral award enforceable or to set aside a declaration of enforceability.

In addition, the State Courts (Local Courts) render assistance to arbitral tribunals by taking evidence or performing other judicial acts which arbitral tribunals are not empowered to carry out (§1050).

Loss of right to object
Pursuant to §1027, the parties must raise objections to procedural irregularities without undue delay or within the relevant period provided for by the ZPO. If they fail to do so, they may not raise that objection later. However, this rule does not apply if a party was not aware of the irregularity, or if there was an infringement of a mandatory statutory provision on procedure.

Formal requirements
There are relatively few formal requirements for arbitration agreements. They are set out in detail in §1031. As a rule, arbitration agreements are effective when they are included in a document which is signed by the parties. The reference to an arbitration agreement in an exchange of written communications between the parties is sufficient if such communications provide a record of the arbitration agreement. The same applies to faxes, telegrams or other forms of telecommunication or electronic communication.

In addition, an arbitration agreement can be made in a document signed by the parties which refers to an arbitration clause contained in another document (§1031 (3). For example, an agreement or an exchange of correspondence can refer to the standard terms and conditions of business of one of the parties which include an arbitration clause and thereby incorporate the arbitration clause into the agreement.

Arbitration agreements to which a consumer is a party must be contained in a document which has been personally signed by the parties.

Arbitrability
In principle, any claim involving an economic interest can form the subject of arbitration proceedings (§1030 (1). Private disputes in competition law matters may also be referred to an arbitral tribunal including, for example, disputes arising out of an agreement containing restrictive trade practices. It is doubtful whether applications to set aside shareholders’ resolutions adopted in a general meeting of a limited liability company (Gesellschaft mit beschränkter Haftung – “GmbH”) or of a stock corporation (Aktiengesellschaft – “AG”) can be referred to an arbitral tribunal. According to a judgment of the Federal Court of Justice (Bundesgerichtshof – “BGH”) of 29 March 1996 (II ZR 124/95) this is only possible if the arbitration proceedings are conducted in such a way as to ensure that all shareholders are given the opportunity to join in the arbitration. In the case in question, the BGH found that these conditions had not been fulfilled. In light of this decision, it is unlikely that arbitration will play an important role in such disputes.

Constitution of the arbitral tribunal
The parties are free to agree on the number of arbitrators. In the absence of an agreement, the arbitral tribunal shall be composed of three arbitrators (§1034). The parties are also free to agree a procedure for the appointment of the arbitral tribunal (§1035). In the most common type of agreement, providing for an arbitral tribunal consisting of three arbitrators, each party generally appoints one arbitrator and the two party-appointed arbitrators then appoint the chairperson of the arbitral tribunal (§1035 (3). If the party-appointed arbitrators cannot agree on the third arbitrator, each party may request that the Higher Regional Court (Oberlandesgericht – “OLG”) with local jurisdiction at the place of arbitration make the appointment (§1035 (4); §1062 (1) No.1). The same applies if the parties have agreed that the arbitral tribunal shall consist of a sole arbitrator but cannot reach agreement on the appointment. In the event that the place of arbitration is not determined in the arbitration agreement, the German Courts have jurisdiction if either the claimant or the respondent has its place of business or habitual residence in Germany (§1025 (3) in connection with §1035; §1062 (3), unless the parties have agreed otherwise.

Multi-party arbitration
Difficulties arise in the appointment of arbitrators where multiple parties are involved in the arbitration proceedings as claimants or respondents. German law does not make express provision for multi-party arbitrations and it is therefore up to the parties to incorporate fair procedures for the appointment of a joint arbitrator for several participating parties to the arbitration agreement. The ICC Rules of Arbitration (1998) as well as the DIS Rules of Arbitration (1998) contain provisions on the appointment of arbitrators in multiparty arbitrations which are accepted by German courts.

The challenge of arbitrators
Arbitrators may be challenged pursuant to §1036 if circumstances exist which give rise to justifiable doubts as to the impartiality or independence of an arbitrator or if an arbitrator does not fulfil the requirements or does not have the qualifications agreed between the parties for the appointment of an arbitrator.

The parties may agree their own procedure for challenging an arbitrator. Arbitration institutions usually have provisions in their rules of arbitration regarding challenging arbitrators. In ad hoc arbitrations under German arbitration law the arbitral tribunal itself, and in the last resort the State Courts, decide on challenges (§1037).

Pending the outcome of the challenge proceedings, the arbitral tribunal (including the arbitrator subject to the challenge) may continue the arbitration proceedings and make an award, but any such award may subsequently be set aside if the challenge is successful (§1059 (2) No. 1 lit. d). The same consequence ensues if the arbitrator does not fulfil his duties within a reasonable period of time (§1038).

A person who is invited to act as an arbitrator must disclose all circumstances which could give rise to justifiable doubts as to his impartiality or independence. The arbitrator must also immediately disclose any such circumstances if they arise after his appointment and during the arbitration proceedings. The IBA Guidelines on Conflicts of Interest in International Arbitration (2004) provide useful advice on what circumstances may give rise to doubts with regard to an arbitrator’s impartiality. In practice, the parties will frequently make appropriate enquiries with the arbitrators at the beginning of arbitration proceedings. For a challenge to be successful, it does not matter whether the arbitrator was actually impartial and independent. Instead it must be shown that a reasonable party would have justifiable doubts as to the impartiality and independence of the arbitrator on the basis of the particular circumstances of the case.

The appointment of substitute arbitrators
If the appointment of an arbitrator is terminated (by challenge, resignation, dismissal or death), a substitute arbitrator shall be appointed (§1039). The same rules apply to the appointment of a substitute arbitrator as applied to the appointment of the original arbitrator, unless the parties have agreed otherwise.

Arbitrators’ fees, expenses and immunity
German arbitration law distinguishes between the arbitration agreement by which the parties submit their dispute to the decision of an arbitral tribunal, and the arbitrators’ agreement. The arbitrators’ agreement deals with the contractual relationship between the parties and the arbitrators. It is therefore concerned, in particular, with issues such as the payment of the arbitrators’ fees and the reimbursement of their expenses. The ZPO is silent on this issue. The arbitrators’ agreement is simply regarded as a contract for the supply of services under the general rules of the German Civil Code (Bürgerliches Gesetzbuch –“BGB”).

Under German law, there will also be a separate arbitrators’ agreement if the arbitration is conducted pursuant to the arbitration rules of DIS. DIS will appoint the arbitrators on behalf of the parties and conclude the arbitrators’ agreement in their names with the arbitrators. The arbitrators’ fees are in such cases determined in accordance with the fee scales of the DIS rules. By contrast, if the arbitrators are appointed by the International Court of Arbitration of the International Chamber of Commerce (ICC), the arbitrators’ agreement is concluded between the ICC and the arbitrator(s).

Arbitrators are liable to the parties in the same way as court judges. The law does not contain any express provision to this effect, but it is an implied term of the arbitrators’ agreement unless there is an express provision to the contrary. In particular, arbitrators are liable for the erroneous application of the law under the same conditions which apply to court judges. Arbitrators may also be liable for negligence under the general rules of the law of obligations, e.g. where an arbitrator fails to disclose circumstances giving rise to doubts as to his impartiality or independence contrary to §1036, or in the event of an unjustified resignation or improper delay. In practice such claims are very rare.

Competence to rule on its own jurisdiction
The arbitral tribunal may rule on its own jurisdiction (Kompetenz-Kompetenz) and on the existence and validity of the arbitration agreement (§1040). Objections to the jurisdiction of the arbitral tribunal must be made no later than upon submission of the Statement of Defence. Otherwise the right to object to the tribunal’s jurisdiction may be precluded (§1027). If the arbitral tribunal rules that it has no jurisdiction, this decision is final. If, on the other hand, the arbitral tribunal considers that it has jurisdiction, each party can apply for a decision from the Higher Regional Court with local jurisdiction at the place of arbitration (§1040 (3). If the arbitral tribunal has confirmed its jurisdiction, it can continue the arbitration proceedings regardless of whether or not a party has requested the Higher Regional Court to decide on the arbitral tribunal’s jurisdiction. It can also make an arbitral award while the request is pending. This rule is intended to prevent a party from delaying arbitral proceedings by applying to the court and corresponds to the rules applicable to the challenge of arbitrators. If the court subsequently finds that the arbitral tribunal did not have jurisdiction, any arbitral award made in the meantime may be set aside on the application of one of the parties (§1059 (2) No. 1 (c).

Power to order interim measures
The arbitral tribunal may grant interim injunctions and order interim or protective measures (§1041). At the request of a party, it may repeal or amend such measures. If an interim measure proves to have been unjustified from the outset, the party who obtained that order is obliged to compensate the other party for any losses it suffered as a result of this order. The claim for damages may be included in the pending arbitral proceedings (§1041 (3).

An interim measure ordered by the arbitral tribunal may be enforced if leave for enforcement is granted by the court (§1041 (2). Jurisdiction for enforcement applications lies with the Higher Regional Court (§1062 (1). Upon application by a party, the court can also set aside or modify an interim measure ordered by the arbitral tribunal.

Instead of requesting an interim protective measure from the arbitral tribunal, a party may also apply to the courts in accordance with the general provisions on interim protective measures (§1033) and ask for an attachment order (§§916–934) or an interim injunction (§§935–945). In deciding whether to apply for an interim measure to the courts or to the arbitral tribunal, it is important to note that the arbitral tribunal’s order can only be enforced after leave for enforcement has been granted by the court in the above-referenced proceedings.

General remarks
Subject to the mandatory provisions of the law the arbitral tribunal shall conduct the proceedings according to the rules agreed by the parties. Failing such agreement the arbitral tribunal shall conduct the proceedings in such manner as it considers appropriate (§1042 (4).

German arbitration law does not indicate a preference as to whether the arbitration proceedings should be conducted pursuant to Continental European civil law procedures or pursuant to Anglo-American procedural traditions. Instead, the law gives the parties significant autonomy in agreeing the procedure best suited to resolving their dispute. In the absence of an agreement between the parties, and subject to the mandatory and optional provisions of German arbitration law, it is largely left to the arbitrators to decide on the procedure to be followed. An arbitrator will frequently follow the procedures with which he is most familiar from his own professional background. A German arbitrator might therefore tend to structure the proceedings in line with the procedural provisions of the ZPO. This is particularly so in domestic arbitration proceedings, while in international arbitration proceedings, arbitrators will take into account the legal backgrounds of the parties involved when structuring the proceedings.

The comprehensive disclosure requirements typical of common law discovery procedures are unlikely to feature in arbitration proceedings conducted by arbitrators with a German legal background unless specifically agreed by the parties. In proceedings following the German tradition, each party will normally submit only those documents on which it seeks to rely in support of its case. Disclosure proceedings are rare though not forbidden by German law. §142 (as amended in 2001) provides for some disclosure in court proceedings and may influence arbitral proceedings as well. In addition, German substantive civil, commercial and intellectual property laws contain a number of specific provisions pursuant to which a party may be obliged to provide certain information to the other party. Case law has defined additional situations where one party may request disclosure from the other. While disclosure is thus limited in domestic German arbitration proceedings, arbitral tribunals in international arbitration proceedings will take into account the backgrounds and the expectations of the parties involved with respect to disclosure.

In accordance with German tradition, there will be greater reliance on written submissions rather than on oral hearings, and oral evidence will be kept as short as possible. The exchange of written witness statements as produced under common law procedures is uncommon in German State Court proceedings and arbitrators trained in the German legal tradition will be reluctant to rely on such statements. Finally, a German arbitrator will frequently take an active role in the conduct of the arbitration and management of the proceedings and seek to promote a settlement of the dispute. This approach is inspired by §278, pursuant to which the judge is obliged to encourage the parties to settle their case.

In arbitration proceedings which involve foreign parties and in particular parties with a common law background, arbitral tribunals in Germany increasingly tend to apply the International Bar Association Rules on the Taking of Evidence in International Commercial Arbitration, which attempt to bridge the gap between civil law and common law approaches to procedural issues.

Specific rules of procedure
The law contains a number of provisions on the conduct of the arbitration proceedings, namely:

• §1042: general rules of procedure;
• §1043: place of arbitration;
• §1044: commencement of arbitral proceedings;
• §1045: language of proceedings;
• §1046: statements of claim and defence;
• §1047: oral hearings and written submissions;
• §1048: default of a party;
• §1049: experts appointed by the arbitral tribunal; and
• §1050: court assistance in taking evidence and other judicial acts.

The parties may derogate from these provisions with the exception of the mandatory provisions in §1042 (1) and (2).

Place of arbitration and language of proceedings
The parties are free to agree the place of arbitration and the language of the proceedings. Failing such an agreement, the arbitral tribunal determines the place of arbitration and the language of the proceedings.

The place of arbitration is significant when determining whether or not German arbitration law is the law applicable to the arbitration proceedings and whether an arbitral award will be regarded in Germany as a domestic or foreign arbitral award. In addition, the jurisdiction of the German courts to grant interim measures in support of arbitral proceedings is determined by the place of arbitration. However, unless otherwise agreed by the parties, the arbitral tribunal may hold hearings and take evidence or other procedural steps at any place which it considers appropriate (§1043).

Commencement of arbitration
Unless otherwise agreed by the parties, the arbitral proceedings commence when the claimant serves on the respondent a request to refer the dispute to arbitration (§1044). The law only requires the request to contain the names of the parties, the subject matter of the dispute and a reference to the arbitration agreement. However, the request may, and usually does, contain details of the facts, legal arguments and evidence in support of the claim. Service of the request for arbitration suspends the limitation period. The parties may deviate from the provisions set out in §1044. In particular, the rules of the various arbitration institutions regularly contain provisions on the commencement of arbitral proceedings which derogate from §1044.

Submissions
Within the period agreed by the parties or determined by the arbitral tribunal, the claimant must complete his Statement of Claim and the respondent must serve his defence (§1046). Each party may change or amend its written submissions in the course of the proceedings. The provisions relating to the claim also apply to counterclaims (§1046 (3). Counterclaims may not exceed the scope of the arbitration agreement. In addition, a party may claim a right of set-off against the other party’s claim if such claim falls under the scope of the arbitration agreement.

Oral hearing and written proceedings; default by parties
Unless otherwise agreed by the parties, the arbitral tribunal decides whether an oral hearing is required or whether the proceedings are to be conducted on the basis of written submissions only (§1046). The arbitral tribunal is obliged to hold an oral hearing if one of the parties requests an oral hearing, unless the parties have excluded oral hearings in the arbitration agreement.

If a party does not appear at an oral hearing, the arbitral tribunal may continue the proceedings in the absence of that party (§1047). Unlike in court proceedings, however, absence will not be deemed to be an admission of the factual submissions made by the other party. Rather, the arbitral tribunal must base its award on the evidence then available.

If a party has not made its submissions within the time period determined by the arbitral tribunal, the arbitral tribunal may disregard such submissions if the delay is deemed unjustified. The parties can agree other or supplementary rules. These may be found in institutional arbitration rules incorporated into the arbitration agreement by reference, or in the terms of reference agreed by the parties.

Evidence
The arbitral tribunal decides whether evidence is required to support a statement of fact. The arbitral tribunal takes evidence and has discretion to assess such evidence freely (§1042 (4). The arbitral tribunal can, in particular, hear witnesses called by the parties, or appoint experts to report on certain issues to be identified by the arbitral tribunal. The arbitral tribunal can instruct a party to provide the expert with information, or give access to documents and other relevant items for inspection. It is worth noting that according to German legal tradition, arbitral tribunals tend to exercise a larger degree of control and take a more pro-active role in the taking of evidence than would proactive be the case with arbitrators having a common law background.

The arbitral tribunal cannot compel witnesses to give evidence, but it can request the assistance of the State Courts in accordance with §1050 if a witness is not prepared to give evidence before the arbitral tribunal. The State Courts can order witnesses to give evidence and impose sanctions for failure to do so.

Choice of law
The arbitral tribunal shall make its award on the basis of the law chosen by the parties. Failing a choice of law by the parties, the arbitral tribunal shall apply the law of the jurisdiction with which the subject matter of the proceedings is most closely connected (§1051). This rule corresponds to the conflict of law rules applicable in most countries and, in particular, to Articles 3 and 4 of the Rome Convention of 1980, which applies between the EU Member States. The parties can also agree that the arbitral tribunal shall apply the rules of the so-called “lex mercatoria”. This is a set of rules regulating international commercial transactions independent of national legal provisions, which is primarily based on customary law but also on international conventions and international uniform model laws. The rules of the lex mercatoria, however, still lack precise definition. Finally, the parties can grant the arbitral tribunal the authority to decide ex aequo et bono (§1051 (3). In practice, it is very rare that arbitral tribunals are authorised to decide ex aequo et bono.

Decisionmaking by the tribunal
In arbitral proceedings with more than one arbitrator, all decisions must be made by a majority of the members of the arbitral tribunal (§1052 (1). This applies not only to arbitral awards and interim awards but also to procedural decisions. The parties may, of course, agree otherwise. Frequently the parties or the other arbitrators authorise the chairperson of the arbitral tribunal to rule on issues of procedure. §1052 (2) makes provision in the event that an arbitrator refuses to take part in the vote on a decision.

Form, content and effect of the award
The arbitral award shall be made in writing and signed by the members of the arbitral tribunal. If an arbitrator is prevented from signing, or refuses to sign the award, the signature of the majority of the members of the arbitral tribunal shall be sufficient (§1054). The award must state the reasons upon which it is based unless the parties have agreed that no reasons are to be given. No reasons are required for an award on agreed terms.

Within the scope of its jurisdiction, an arbitral tribunal can make the same orders in its award as could be made in a court judgment. In particular, the arbitral tribunal can order a party to make a payment; to deliver goods; to make a declaration of will; or to determine the existence or non-existence of a legal relationship.

The arbitral award is final and binding unless the parties have agreed to an arbitral process of appeal (which is rarely the case). The arbitral award must be delivered to the parties (§1054 (4). No particular form of service, such as service by a bailiff or by registered mail, is required by law. Interest

The arbitral tribunal shall award interest to the extent that the substantive law to be applied by the arbitral tribunal allows a claim for interest. The arbitral tribunal can only award interest as a matter of discretion if the parties have granted the tribunal the right to decide ex aequo et bono (§1051 (2). The filing of an arbitration claim (as opposed to a court action) does not in itself give the claimant a right to (statutory) interest. However, the debtor will often be in default on a contractual payment and may therefore be obliged to pay interest under the contract.

Termination of proceedings and settlement
The claimant can withdraw the claim and thereby terminate the arbitration. In this event the arbitral tribunal shall make a decision declaring the arbitral proceedings terminated (§1056 (2) 1(b). Withdrawal does not result in loss of the claim and thus the claimant is at liberty to institute fresh proceedings. If the respondent objects to the withdrawal of the claim, and the arbitral tribunal recognises a legitimate interest on the part of the respondent in obtaining a final settlement of the dispute, the arbitral tribunal can make an award on the merits of the claim instead of making a decision which merely declares the termination of the arbitration.

If the parties reach settlement in the course of the arbitration, the arbitral tribunal shall also terminate the proceedings. At the request of one of the parties, the arbitral tribunal records the settlement in the form of an arbitral award on agreed terms. Such an arbitral award can be executed as soon as it is declared enforceable by a State Court. Awards on agreed terms can be declared enforceable not only by the courts but also by a notary public with the consent of the parties.

It should be noted that, independent of any arbitral proceedings, a settlement agreement is enforceable if it was concluded by duly authorised lawyers (§796 (a) and was declared enforceable by a court or (with the consent of the parties) by a notary public (§§796 (b) and 796 (c).

Costs
The costs of the arbitration are dealt with in accordance with the arbitration agreement or other agreements reached by the parties. Failing an agreement on costs, the arbitral tribunal shall allocate the costs between the parties at its discretion. In exercising its discretion, the tribunal shall take into consideration the circumstances of the individual case, in particular the outcome of the proceedings (§1057 (1). The costs of the arbitration also include the necessary costs incurred by the parties for the proper pursuit of their claim or defence, including legal fees, the costs of expert reports and travel expenses. Under German civil procedure rules, the parties generally bear the costs in proportion to their degree of success or failure (§§91–98). It stands to reason that a tribunal consisting of German arbitrators would make a decision on costs basically in the same way as a court making a court decision.

Correction and interpretation of the award
If the arbitral award contains errors in computation, typographical errors or similar obvious errors, the arbitral tribunal can correct these on its own initiative or at the request of one of the parties (§1058 (4). At the request of one of the parties, the arbitral tribunal may also provide an interpretation of parts of its award and/or make an additional award in respect of any claim which was presented to the tribunal but was not dealt with by the tribunal.

Unless otherwise agreed by the parties, an arbitration award is final and can only be set aside at the request of one of the parties on one of the grounds listed in §1059. These include defects in the arbitration agreement, certain fundamental procedural errors and when the award conflicts with German ordre public (i.e. public policy). Furthermore, an award is liable to be set aside if it is made pending the outcome of a challenge to the jurisdiction of the arbitral tribunal or of an arbitrator, and the court subsequently holds that the tribunal lacked jurisdiction, or the challenge of an arbitrator was successful. Otherwise, an award can only be set aside for defects in the composition of the tribunal or other procedural irregularities if it can be shown that the error affected the award (§1059 (1) (d). An application for the award to be set aside can generally only be made within a time period of three months from the day on which the party making the application received notification of the award.

The jurisdiction for challenges to arbitral awards lies with the Higher Regional Court at the place of arbitration. The court can set the award aside or can, in appropriate circumstances, set the arbitral award aside and refer the matter back to the arbitral tribunal (§1059 (4). If the arbitral award is set aside and the matter is referred back to the arbitral tribunal, the proceedings will be continued with the original arbitral tribunal in place. If, however, the award is only set aside without the matter being referred back to the arbitral tribunal, the arbitral proceedings must be repeated from the beginning. In such cases, a new arbitral tribunal must be constituted because the jurisdiction of the original arbitral tribunal terminates when the arbitral award is set aside (§1056 (3).

Domestic awards
An arbitral award can be enforced in Germany if it has been declared enforceable (§1060). Jurisdiction lies with the Higher Regional Court designated by the parties in the arbitration agreement or, should there be no such designation, with the court in whose district the place of arbitration is situated (§1062 (1) No. 4). The court may only refuse to declare the award enforceable if there are grounds for setting aside the arbitral award under §1059 (2). In particular, the declaration of enforceability cannot be refused on the grounds that the arbitral tribunal has made an erroneous decision. Grounds for refusing the declaration of enforceability include procedural defects and conflict with public policy. An award on agreed terms can, with the consent of the parties, also be declared enforceable by a German notary public (§1053 (4)).

Foreign awards
Pursuant to §1061, the enforcement of foreign awards in Germany is governed by the New York Convention of 1958. If an application for an order declaring a foreign award enforceable is refused, the court must also make a declaration that the award is not to be recognised in Germany.

Legal remedies
Complaints based on a point of law against decisions regarding recognition and enforcement of arbitral awards can be made to the Federal Court of Justice (Bundesgerichtshof – “BGH”) in the limited circumstances specifically set out in §1065.

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