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). <