German arbitration law is governed by Book 10 of the German Code of Civil Procedure (“ZPO”) and was last reformed in 1997. The current version of Book 10 is heavily influenced by the UNCITRAL Model Law as it stood in 1997, but in 2006, the UNCITRAL Model Law was revised. The national arbitration laws of neighboring European countries and the rules of arbitration of major arbitration institutions have also changed since 1997. It is therefore time to adapt German arbitration law.
The following points of the draft bill appear to be of particular importance:
The draft bill would permit arbitration agreements to be made by means electronic communication. In particular, arbitration agreements that have been concluded or at least documented in writing or by “other means of communication that allow subsequent access to the information” will also be regarded as valid (§ 1031 para. 1 of the ZPO, new version after incorporation of the draft bill – “ZPO-NV”). However, arbitration agreements involving a consumer will continue to be valid only if they are contained in a document signed by both parties (§ 1031 para. 5 of the ZPO-NV).
The draft bill would permit video hearings and electronic arbitral awards.
Ordinary courts could in the future enforce interim measures ordered by an arbitral tribunal unless the order can be set aside or certain other exceptions apply (§ 1041 of the ZPO-NV).
Dissenting opinions, by which arbitrators document an opinion that differs from that of their fellow arbitrators, will be generally permitted in the future (§ 1054a para. 1 ZPO-NV). This provision is designed to clarify the law after a German court of appeals had expressed doubt as to whether dissenting opinions were lawful, given that the deliberations of an arbitral tribunal are generally confidential.
Furthermore, the draft bill aims to enable the publication of arbitral awards (with the consent of the parties) and court decisions in annulment and enforcement proceedings (§ 1054b of the ZPO-NV).
The draft bill would finally permit the use of the English language in proceedings relating to arbitration before German courts. According to the draft bill, proceedings for the recognition, enforcement, or setting aside of arbitral awards, and certain other court proceedings relating to arbitration may in the future be conducted entirely in English if there is a Commercial Court having jurisdiction, even in the absence of an express prorogation, and either the parties have agreed on the use of English also in court proceedings or one party requests the use of English and the respective other party does not reject this request (§ 1063a (1) of the ZPO-NV). Even in court proceedings relating to arbitration that are held in German, submissions may be made in English, and vice versa, again if either the parties have agreed on the use of English or one party requests the use of English and the respective other party does not reject this request (§ 1063a (2) of the ZPO-NV). Also subsequent appeal proceedings before the Federal Court of Justice may be held in English if a party requests that and the court agrees (BGH, § 1065 of the ZPO-NV). Furthermore, in all German court proceedings relating to arbitration, even if they are conducted in German, the parties may in the future submit all relevant documents in English; the court may only require a translation if there is a need for it in the specific case (§ 1063b of the ZPO-NV). Therefore, arbitration agreements providing for arbitration in Germany should in the future address not only the language of the arbitration but also the language of any court proceedings relating thereto.
Following the Act to Promote Germany as a Forum for Legal Proceedings passed in the last legislative period, the draft bill is a specific step towards strengthening Germany as a place of arbitration, which, in addition to an open, modern and efficient civil justice system, requires an internationally competitive arbitration law.
