Initiating arbitration in Germany requires filing an application with the DIS. Please note that the amended DIS rules have been in effect since early 2018.
Arbitration in Germany: Pros
- unlike litigation, it requires less time & money;
- unlike other litigation procedures, it provides parties with an opportunity to select arbitration experts in an area where an arbitration is held;
- due to its flexibility, parties are totally independent & enjoy equal rights.
Concluding an arbitration agreement in Germany implies drawing up a separate agreement or including an arbitration clause in a contract. Matters related to family law (most of it) & criminal law aren’t subject to arbitration. Those considering initiating patent law disputes in Germany should keep in mind that such disputes can be resolved by arbitration. Resolving competition disputes by arbitration in Germany is also possible.
Settling commercial claims by arbitration in Germany requires appointing arbitrators. To qualify as an arbitrator, serving adjudicators must obtain approval of relevantly authorised regulators. Retired adjudicators aren’t required to comply with such requirements. If parties fail to reach an agreement on appointing arbitrators, an arbitrator is appointed by a court. In an arbitration involving 3 arbitrators, each party appoints one arbitrator, with the two of them selecting a 3rd one.
Germany: Initiating Arbitration
The site & language an arbitration will be conducted in are determined by agreements concluded between parties or by arbitration courts. Normally, plaintiffs initiate arbitration proceedings in Germany by dispatching a notice containing participants’ names & brief description of the dispute’s nature to defendants. It’s up to parties to decide whether they want oral hearings to take place.
Awards are rendered by the majority of arbitration panel members. Should one of the arbitrators decide to refrain from voting, other arbitrators can render an award without them. Please note that only a chairman can render individual awards. Those seeking to initiate an arbitration in Germany should keep in mind that awards rendered by arbitration panels must only be in written form & bear signatures of all arbitrators. They must also explain what they’re based on, unless expressly agreed to the contrary.
There’s no specific deadline for rendering awards. For proceedings administered as per the DIS rules, awards must be rendered within 90 days since the date of the last hearing.
There’s no specific remedies to be awarded during arbitration proceedings in Germany. If there’s any, they're identical to those awarded by courts during regular litigation. Imposing penalties resulting in an infringement of German laws is strictly forbidden. Arbitral tribunals are also allowed to award temporary relief, unless expressly agreed to the contrary.
To have an award set aside, parties must file an appeal with the Regional Supreme Court. There is only one level of appeal to the Federal Court. The review process takes from ninety days to twelve months. Costs incurred by parties at each level depend on a disputed amount & are normally apportioned based on the proceedings’ results.
3rd Party Funding
There’s no restrictions on funding of arbitration claims by 3rd parties.
Considering resolving commercial disputes by arbitration in Germany? Need more information on arbitration regulation in Germany? Please consider contacting IQ Decision UK.