Recent German Court Decisions

 

German courts are generally pro-arbitration, as is illustrated by some recent court decisions.

Arbitration clauses

Frequently, arbitration agreements are concluded by reference to general terms and conditions that contain an arbitration clause. Such incorporation is valid under German arbitration law if the general terms and conditions have been included in the contract. However, problems arise if the contract contains several documents that contradict each other. In 2007, the Federal Court of Justice (BGH) decided a case in which the contract consisted of the following four documents (listed in descending order of priority, as agreed between the parties):

  • The written order.
  • The protocol.
  • General terms and conditions on which the contractor had insisted.
  • General terms and conditions chosen by the principal.

Only the latter included an arbitration clause, while both the protocol and other general terms and conditions provided that the place of jurisdiction for all disputes was to be the competent state court of the seat of the contractor.

The BGH held that the higher ranked provisions did not interfere with the arbitration clause as these provisions were intended to determine which specific state court would be competent in the case of general jurisdiction of the German courts (BGH NJW-RR 2007, 1719). The BGH’s decision indicates that an arbitration clause in any contractual document is likely to prevail.

No more double exequatur

Until 2009, it was possible, in certain circumstances, to en¬force in Germany both a foreign arbitral award and a foreign court decision incorporating that arbitral award (double exequatur). The BGH has changed its jurisprudence in this regard to avoid exposing debtors to the risk of facing two such procedures, so that only the foreign arbitral award itself can now be enforced in Germany (BGH NJW 2009, 2826).

Shareholders’ resolutions

Until 2009, it had been unclear whether disputes concerning the validity of shareholders’ resolutions in a limited liability company were arbitrable, and so they had usually been excluded from arbitration clauses. The BGH has now accepted that such disputes are arbitrable provided that the arbitration proceedings are conducted in a manner that provides legal protection comparable to that in state court proceedings (BGH NJW 2009, 1962). The minimum standards defined by the BGH are that all shareholders have:

  • Agreed on the arbitration clause.
  • The opportunity to participate in the proceedings.
  • The opportunity to participate in the selection of the arbitrators, even if they are not involved in the proceedings from the beginning.

In addition, all disputes concerning the same shareholders’ resolution must be dealt with by a single arbitral tribunal.

However, drafting arbitration clauses to implement these requirements has proved to be extremely difficult. The DIS therefore introduced special rules for these disputes, effective as of 15 September 2009, which may be incorporated by reference (DIS Supplementary Rules for Corporate Law Disputes).

Matthew Secomb and Christophe von Krause are partners, and Paul Giraud is an associate, in the Paris office; David Goldberg and Michael Turrini are partners, Anthony Lavers is Counsel, and Julia Zagonek and Dipen Sabharwal are associates, in the London office; Dr Patricia Nacimiento is a partner, and Christian M Theissen is an associate, in the Frankfurt office; Aloke Ray is a partner, Nandakumar Ponniya is a local partner, and Matthew Shaw is an associate, in the Singapore office; Ola Nils-son is Counsel in the Stockholm office; and Heather Clark is an associate in the New York office of White & Case LLP.

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