Presentation on theme: "Deutsches und Internationales Schiedsverfahrensrecht WS 2013/2014"— Presentation transcript:
1Deutsches und Internationales Schiedsverfahrensrecht WS 2013/2014 Prof. Dr. Joachim Zekoll, LL.M. (Berkeley)Prof. Dr. Rolf Trittmann, LL.M. (Berkeley)
2Interaktives Kolloquium in vier Blöcken und in englischer/deutscher Sprache Grundlagen der Schiedsgerichtsbarkeit/The Basics of ArbitrationDer Ablauf eines nationalen Schiedsverfahrens/ The Course of a Domestic Arbitration Proceeding in GermanyDer Ablauf eines internationalen Schiedsverfahrens/ The Course of an International Arbitration ProceedingSchiedsspruch und Vollstreckung/The Arbitral Award and Enforcement
3Grundlagen der Schiedsgerichtsbarkeit/Basics of Arbitration Arbitration as a form of Dispute ResolutionAd hoc and Institutional ArbitrationSources of LawArbitrabilityArbitration AgreementConfidentialityPros and Cons of Arbitration
4Arbitration as a form of Dispute Resolution Developments in the 20th century 1923 Foundation of the International Court of Arbitration at the International Chamber of Commerce in Paris – ICC Court of ArbitrationFoundation of other arbitration institutions, such asLondon Court of International Arbitration - LCIAStockholm Chamber of Commerce – SSCSwiss Arbitration Association - ASAAmerican Arbitration Association - AAASingapore International Arbitration Centre – SIACChina International Economy and Trade Arbitration Commission - CIETACGerman Institution for Arbitration - DIS
5Arbitration as a form of Dispute Resolution (2) Developments in the 20th Century Various multilateral Treaties1927 Genfer Abkommen zur Vollstreckung ausländischer Schiedssprüche1958 New York Convention1965 Übereinkommen zur Beilegung von Investitionsstreitigkeiten zwischen Staaten und Angehörigen anderer Staaten von 19651965 Foundation of the International Centre for Settlement of Investment Disputes – ICSID1981 Iran – United States Claims Tribunal in Den Haag – 4000 cases1985 UNCITRAL Model Law
6Arbitration as a form of Dispute Resolution (3) Recent Developments in Germany 1998 Gesetz zur Neuregelung des Schiedsverfahrensrechts - §§1025 ff ZPO based on the UNCITRAL – Model lawDIS-Arbitration Rules published
7Arbitration as a form of Dispute Resolution (4) State Courts are maintained by the state to provide a means by which disputes between parties can be decided. They are based on the sovereign power of the state and its responsibility of ensuring a system of independent courts with independent judges and proper rules of procedureParties may agree to (to a large extent) remove their dispute from the jurisdiction of the state courts and have third parties deal with it (Alternative Dispute Resolution, „ADR“)Other Forms of ADRMediationConciliationExpert determination
8Arbitration as form of dispute resolution (5) An alternative to litigation for protecting contractual rights and enforcing contractual obligationsResults in a final, binding award – like a court judgment, but with no appeals on the meritsTrack record of use in disputes under:international contractstransactions with developing countriestransactions involving States and governmental entities
9Arbitration as form of dispute resolution (6) More than 80 % of all international contracts contain an arbitration clauseAs of 2012, 817 pending cases at the International Court of Arbitration in Paris, value in dispute up to 5 bn EURAs of 2012, 172 pending cases at the German Institution of Arbitration , value in dispute up to 2 bn EUR
10The Concept of Arbitration Parties agree to not use state courts to resolve their (arbitrable) dispute but conclude an arbitration agreement by which they consent that a particular legal issue will be finally decided by one or more arbitrators.The arbitral tribunal consists of one or three arbitrators which must be impartial and independent from the parties. The arbitrators are selected by the parties or an indenpendent third partyThe parties choose the seat of the arbitrationThe arbitration procedure is regulated by mandatory law but also is determined and controlled by the partiesThe arbitral tribunal renders a final and binding as well as enforceable decision
11Ad hoc and Institutional Arbitration Institutional arbitration means that an arbitration is administered by an arbitral institutionWhere parties have not selected an arbitration institution, the arbitration will be ad hoc, i.e. governed by the mandatory law, the lex arbitriAdvantages/Disadvantages of the two forms of arbitration
12The Applicable Procedural Law Sources of LawThe Applicable Procedural LawProcedural law inlcudes those aspects of a legal system which determines the technical aspects of a (court) procedureSubstantive Law contains those elements of a legal system that creates, defines and regulates the duties, liabilities and rights of legal entititiesThe rules applicable to the procedure primarily result from the arbitration agreement between the parties.Mandatory procedural law in Germany relating to arbitrationSec 1025 – 1066 ZPO (10th Book)
13Sources of Law (2) The Applicable Procedural Law primarily depends on the mandatory provisions at the place of arbitration (lex loci arbitri)The parties have a free choice of the applicable procedural law as long as it is in compliance with the lex loci arbitriIn absence of parties´agreement the arbitral tribunal may decide at its discretion or refer the applicable rules of procedure at the place of arbitrationRanking order according to Sec 1042 ZPO:Mandatory Rules at the place of arbitration (Sub 1)Determination of the parties (Sub 2)Procedural Orders by the Tribunal (Sub 3)
14Sources of Law (3) Limitations to Applicable Procedural Law Sec 1042 ZPO (Minimum standards)Fair TrialEquality of the partiesPossibility of presenting its caseCounsel may not be excluded from acting as representative
15Sources of Law (4) The Applicable Substantive Law The law applicable to the merit of the dispute results usually from the underlying agreement between the parties Mandatory regulation on Substantive Law in Germany relating to arbitration : Sec 1051 ZPOParties may choose a legal system of a given jurisdiction as a whole or only certain elementsLimitations of the applicable substantive lawAn arbitral award can be set aside if it is in conflict with mandatory law (ordre public), Sec 1059 II Nr 2b
16Sources of Law (5) The UNCITRAL Model Law (1985/2006) Standard basis for the arbitration law in many jurisdictionsBasis for 10 th Book of the ZPOProvides for the basic rules for all stages of an arbitration proceedingAims at harmonizing and unifying national arbitration laws
17Sources of Law (6) UNCITRAL Arbitration Rules (2010) Ad hoc framework of rules which is widely acceptedRegulates all stages of an ad hoc proceedingNo administrative supportRegulations includeScope of application and model arbitration clauseComposition fo the arbitral tribunalArbitral proceedings (place, language et al)The award (form, effect, applicable law, costs et al)
18Sources of Law (7) Institutional Arbitration Rules DIS ICC UNCITRAL LCIASCCCIETACSwiss RulesVienna RulesCASICSIDHKIAC
19Sources of Law (8) „Soft law“/ „best practice“ IBA (International Bar Association) Guidelines for Drafting International Arbitration ClausesIBA Rules on the Taking of Evidence in International Commercial ArbitrationIBA Guidelines on Conflicts of InterestConsistent and published case law of arbitral tribunalsArticles by experienced practitioners
20Case studyCompare the Rules of DIS and ICC-Regeln. What are the prerequisites for filing a request for arbitration, are there differences with respect to mandatory content of the request for arbitration / statement of claim?
21Case studyA company from Brazil, (S) sells 50 t coffee – beans to a highly reputed family company (B) in Hamburg for EUR Upon receipt, B discovers that roundabout 20% of the coffee-beans are damaged. He wants partial repayment of the purchase price, i.e. EUR ,00. S denies responsibility and refuses payment. B decides to sue.
22Case study§ 10 of the Contract reads: "All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by three arbitrators appointed in accordance with said rules. The place of Arbitration shall be Hamburg, Germany. The language of the proceedings shall be English. The present contract shall be governed by German Law."
23Case study Applicable Law Statutory Rules of §§ 1025 et seq of the German Civil Procedural CodeICC Rules of ArbitrationAgreement of the partiesDiscretion of the arbitral tribunal
24Case studyConflict of Law Rules Question 1: Which conflict of law rules are applicable? Question 2: To which substantive law lead the conflict of law rules? Question 3: What is the content of the applicable substantive law?
25Case study Conflict of Law Rules Conflict of Law Rule of German Statutory Law (§1051 ZPO)Conflict of Law Rules of the ICC-Rules (Artikel 17 ICC-SchO)Conflict of Law Rules of German International Private Law (EGBGB bzw. Rom-I und Rom-II-Conventions?)
26Case study Objective determination § 1051 (2) ZPO Where the parties to the dispute failed to determine which statutoryprovisions are to be applied, the arbitral tribunal is to apply the laws ofhat state to which the subject matter of the proceedings has theclosest ties.Artikel 21 S. 2 ICC-SchOIn case the Parties have not agreed on the law applicable, the ArbitralTribunal shall apply the rules of law which it determines to beappropriate.
27Arbitrability Party capacity („subjektive Schiedsfähigkeit“) To conclude an arbitration agreement the legal capacity of the contracting person is required.The legal capacity and capacity to contract of a person are governed by the law of the country of which the person is a national or where a legal entity is registered.Limitations of party capacity are governed by the respective national law. Under German Law, doubts with respect to party capacity exist in cases where one party is consumer or employee, or where a party is insolvent.
28Arbitrability (2)Eligibility for arbitration („objektive Schiedsfähigkeit“),§ 1030 ZPOAny claim concerning an economic interestPrivate disputes in competition law matters may also be referred to an arbitral tribunal including, for example, disputes arising out of an agreement regarding restrictive trade practices.The German Federal Supreme Court (BGH) ruled in 2009 that applications to set aside shareholders’ resolutions adopted at a general meeting of a limited liability company, (Gesellschaft mit beschränkter Haftung), may be subject to arbitration if certain formal and procedural requirements are observed
29Arbitrability (3) Sec 1030 CCP (ZPO) An arbitration agreement regarding non-pecuniary claims has legal effect insofar as the parties to the dispute are entitled to conclude a settlement regarding the subject matter of the dispute.An arbitration agreement regarding legal disputes arising in the context of a tenancy relationship for residential space in Germany is invalid.Arbitration is not possible if statutory law provides that disputesmay not be subjected to arbitration proceedings.
30Arbitration Agreement The Arbitration Agreement is the basic element of every arbitration proceedingSec 1029 Sub 1 CCP (ZPO)„Schiedsvereinbarung“ ist eine Vereinbarung der Parteien, alle oder einzelne Streitigkeiten, die zwischen ihnen in Bezug auf ein bestimmtes Rechtsverhältnis vertraglicher oder nichtvertraglicher Art entstanden sind oder künftig entstehen, der Entscheidung durch ein Schiedsgericht zu unterwerfen“Two alternatives„separate arbitration agreement“ (Schiedvereinbarung)„arbitration clause“ (Schiedsklausel)
31Arbitration Agreement (2) Example of an institutional arbitration clause :DIS arbitration clause„All disputes arising in connection with the contract (description of the contract) or its validity shall be finally settled in accordance with the Arbitration Rules of the German Institution of Arbitration e.V. (DIS) without recourse to the ordinary courts of law.“It is recommended to add the following provisions:„The place of arbitration is....“„The tribunal consist of (number of) arbitrators“„The language of the arbitration is.....“„The substantive law of.....is applicable to the dispute.“
32Arbitration Agreement (3) Legal qualification depends on applicable law: German law qualifies arbitration agreement as „Procedural Agreement“Effect of arbitration agreementBinding on contracting partiesNo binding effect on third parties such as guarantors (exceptions 328 BGB, 398 BGB)Conclusion by offer and acceptanceNecessary: well-defined description of controversies to be resolved by arbitrationWritten form required (Sec 1031 ZPO)Trend to a liberal approach as to written form
33Arbitration Agreement (4) What is compliant with the „written form requirement“ ?Exchange of letters, telefaxes, telegrams, or other means of arbitration which provide a record of the agreementContained in a document transmitted from one party to the other or by a third party to both parties, as well as when such document is considered to be part of the contract in accordance with common usage („kaufmännsiches Bestätigungsschreiben“)A reference in a contract to a document containing an arbitration clause is sufficient if the clause form part of the agreement („AGB“)Arbitration Agreements to which a consumer is a party must be contained in a separate agreement which has been personally signed by the partiesAny non-compliance is cured by entering into discussions on the merits
34Question What is the relevance of the „written form requirement“ ? Should it be handled liberally or rather not ?
35Arbitration Agreement (5) Pathological clausesExample 1:Each dispute, disagreement or each claim which results out of this agreement or which releates to this agreement, its infringement or ist annulment is to be decided upon by arbitration proceedings according to the UNCITRAL Rules of arbitration in their current version.Ziff. 2 nach BGH NJW 89, 1477
36Arbitration Agreement (6) Pathological clausesExample 2:Zur Durchführung von Streitigkeiten wählt die Firma G eine neutrale Person aus der Wirtschaft oder dem Recht als Schiedsrichter. Der Schiedsrichter entscheidet dann den Streitfall definitiv für beide Seiten. Die Entscheidung ist ohne Widerspruch sofort vollstreckbar. Findet das Verfahren vor einem ordentlichen Gericht statt, sind Rechtsanwälte als Parteivertreter zu bestellen.Ziff. 2 nach BGH NJW 89, 1477
37Arbitration Agreement (7) Pathological clausesExample 3:"The Parties shall attempt to settle amicably any dispute or difference of opinion that may arise in connection with the Contract. Disputes or disagreements that cannot be solved through negotiations shall be brought before the International Court in Switzerland. This court will proceed in accordance with international law. The award of this court shall be considered final and binding upon the Parties."Ziff. 2 nach BGH NJW 89, 1477
38Arbitration Agreement (8) Pathological clausesExample 4:"Arbitration: […] Any dispute not settled amicably […] shall be finally settled by arbitration. […] For contracts with foreign contractors, international arbitration with proceedings administered by the international arbitration institution appointed in the Contract Data, conducted in accordance with the rules of arbitration of the appointed institution, if any, or in accordance with UNCITRAL arbitration rules, at the choice of the appointed institution. The place of arbitration shall be the city where the headquarters of the appointed arbitration institution is located. The arbitration shall be conducted in the language for communications defined in Sub-Clause 1.4 of the Contract Data."Ziff. 2 nach BGH NJW 89, 1477
39Arbitration Agreement (9) What went wrong ?Keep it simpleDon‘t over-engineerStick with Standard clauses of the leading arbitral institutions if you want to avoid problems when starting your arbitration.Ziff. 2 nach BGH NJW 89, 1477
40Arbitration Agreement Standard slideArbitration AgreementTemplate tipTo start using numbers or bullets, use the INCREASE INDENT buttonChoose the LawChoose the VenueChoose the RulesChoose the Number of ArbitratorsIf there’s time, add “Bells & Whistles”
41Case studyDraft an institutional arbitration clause relating to a supply agreement between a German manufacturer and a Chinese distributor.Draft an ad hoc arbitration agreement for a German and a Spanish party relating to the purchase of a solar-energy system to be supplied to the Spanish customer in Malaga
42ConfidentialityMore private than state court litigation. Oral hearings not opento the public.The private nature of arbitration is usually considered as one of the key advantages of arbitral proceedings compared to proceedings in state courts.Reluctance to publish awards; publications, if any, in a sanitized versionThe public is not informed of the conduct and content of the proceedings.Hinweis auf die jüngsten Änderungen der Schiedsordnungen
43Confidentiality (2)BUT: Confidentiality of such proceedings is not as clear as parties assume. German arbitration law does not expressly stipulate a confidentiality obligation on the parties. Regarding any consultation during the decision-making process, the arbitrators are bound by the confidentiality of judicial deliberations.Hinweis auf die jüngsten Änderungen der Schiedsordnungen
44Case studyDuring an arbitration the arbitrators become aware that the parties are in dispute about claims arising out of a (prohibited) cartel the European and national cartel offices are not aware of. Are the arbitrators under an obligation to report the prohibited behaviour to the authorities ?The arbitrators become aware that they are „used“ by the parties to conduct a sham arbitration with the aim to illegally transfer monies out of Russia. What should they do ?The arbitrators believe that they have written a faboulous award which the world should be aware of. They want to publish the award. Are they allowed to ?
45Pros and Cons of arbitration (1) Advantages of arbitration – perception and reality Enforceability – New York Convention awards are enforceable in more than 149 signatory states – but do your do diligenceNeutrality – “level playing field”´, away from local courts and national administrative bodiesConfidentiality of arbitral proceedings – but do not take it for grantedProcedural flexibilityExpert arbitrators chosen by the parties more or less carefullyFinality – a double edged sword?Speed and cost?
46Pros and Cons of arbitration (2) Disadvantages of Arbitration – inherent and other limitations Limited scope of arbitral jurisdiction – defined by contractLimited powers of arbitrators, e.g. to order injunctions with effective sanctions/impact on third parties and (in practice) to give summary judgmentsFlexibility may lead to unpredictable procedureThe problem of multi-party disputes/lack of consolidation powersAwards are not precedents, nor binding on third parties – problem of contradicting awardsSpeed and cost?
47Pros and Cons of arbitration (3) Bottom line: ultimately, perhaps the only realistic option – or the least worst alternative to home field advantage
48Pros and Cons of institutional/ad hoc arbitration (1) Choosing the rules – tailor made or ready to wear?Pure ad hoc arbitration: tailor made to the (likely) dispute but heavy administrative/financial burden on parties and risk of delay (or worse) through non-cooperation (e.g. expensive applications to court to appoint arbitrators). Drafting of arbitration clause is crucial!Ad hoc arbitration with UNCITRAL Rules: preferable to pure ad hoc arbitration; must specify appointing authority and expressly exclude appealsInstitutional arbitration: may seem slower and more expensive, but generally recommended; always adopt model institutional arbitration clauseChoice of institution: choose a major international institution absent a particular reason not to (e.g. ICC, LCIA, SCC); check track record/durability of regional alternatives
49Pros and Cons of ad hoc/institutional arbitration (2) Advantages of Institutional ArbitrationExistence of an automatically incorporated set of arbitration rulesHigher degree of forseeability and predictabilityAssistance through trained staffNo issues with service of processQuality assurance (some institutions)Different types of rules for different situationsDisadvantages of Institutional ArbitrationHigher costs through administrative feesPotentially slower proceedingNot all institutions are of same quality
50Choice of the arbitral institution Often chosen by default or because institute is well known in a particular region or trade areaDifferencesDefault regulation on number of arbitratorsNomination of arbitratorsCalculation of costsAbility of the institution to consolidate proceedings or join partiesRules on multi-party proceedingsAbility of the institution to control the proceedingScrutiny of the draft awardLevel of administrative supportExperience of staff
51Domestic Arbitration in Germany The initiation of the arbitration proceeding (ad hoc/DIS)The selection of the arbitral tribunal (ad hoc/DIS)The stages of an arbitrationThe role of the ordinary courtsInterim relief (ad hoc/DIS)Expedited Proceeding (DIS)Rules for arbitrating corporate issues (DIS)
52The initiation of the arbitration proceeding (ad hoc/DIS) Initiation of proceedingSec 1044/1046 CCP/Sec 6 DIS-RulesWhat are the prerequisites for initiating a domestic arbitration ?Which elements are mandatory ?What applies as to language ?When is an arbitration proceeding „pending“ (Sec 204 Sub 1 no 11 Civil Code) ?Practical issue: full reasoning or notice pleading ?Cost of initiating an arbitration proceedingSec 7 DIS-RulesSec 6 Sub 1 and 12 GKGConsequence of non-payment ?
53Initiation of proceeding (2) Service of process (Sec 8 DIS-Rules/Sec 1047 Sub 3 CCP)Reply (Sec 9 DIS-Rules/Sec 1046 Sub 1; 1040 Sub 2 CCP)No formal requirements as to contentsSec 1049 Sub 2 CCP requires Respondent to invoke lack of jurisdiction of the arbitral tribunal in its reply, DIS-Rules ?Sec 1032 Sub 2 CCP allows until constitution of the tribunal the initiation of court proceeding to request a declaration that an arbitration proceeding is permissible/impermissibleCounterclaim (Sec 10/11 DIS-Rules/Sec 1046 Sub CCP)Tribunal decides on permissibility (Sec 10 Aub 2 DIS-Rules)Is the Tribunal competent ? Is there a congruent arbitration agreement ?Set-off ?
54The constitution of the arbitral tribunal (ad hoc/DIS) Key element in every arbitrationSole arbitrator, three or more arbitrators ? What is preferable in which situation ?Default provision in Sec 1034 CCP/DIS ?Who is the „ideal“ arbitrator ?QualificationsWhat are the relevant condiderations ?Rules on the appointment of arbitrators, Sec 1035 Sub 3 CCP/Sec 12 DIS-RulesNationality requirements ? Judges ? Lawyer ?Special situationMulti-party proceedings (Sec 13 Sub 3 DIS-Rules)
55The constitution of the arbitral tribunal (2) What happens if the Respondent does not nominate an arbitrator ?Sec 12 Sub 1 DIS-Rules (The „DIS-Appointing Committee“)Sec 1035 Sub 3 CCP (Appointment by the ordinary courts, cost issues)Nomination of the ChairmanBy the two co-arbitrators within 30 days (Sec 12 Sub 2 DIS-Rules/Sec 1035 Sub 3 CCP)Default nominationSec 12 Sub 2 DIS-Rules, on request by one of the parties after expiration of 3o days period
56The constitution of the arbitral tribunal (3) Basic elements: Independence and impartialitySec 1036 CCP/Sec 15 ff DIS-RulesArbitrators shall disclose possible conflicts before and during an arbitration proceedingThe IBA Guidelines on Conflict of Interest/Sec 41 CCPWhat are the crucial elements ?Independence: personal economic interests, professional relationship with one of the parties, previous actvitiesRed/Orange/Green listImpartiality: BiasFormal acceptance by an arbitratorSec 16 DIS-Rules/Sec 1035 CCPFormal nominationSec 17 DIS-Rules
57The constitution of the arbitral tribunal (4) How to find the „right tribunal“ ?What are the relevant criteria ?What is the right process ?
58Competence-Competence Sec 1040 CCPThe Tribunal has competence to rule on its jurisdictionSeparability of the arbitration agreement (sub 1)By objection of one party the tribunal it should make a preliminary ruling on its jurisdiction (sub 2)This ruling then can be challenged before the ordinary courts (sub 3)During the review by the courts the tribunal may continue the arbitration proceedings
59The further stages of an arbitration (ad hoc/DIS) How to structure an arbitrationCCP and DIS-Rules give broad discretion (Sec 1042 CCP/Sec 24 DIS-Rules)Procedural Order No 1 (PO 1)„German court proceeding in a hotel“, „Hybrid approach“ or „international best practice in Germany“Rules on factfinding process are very limited and leave many optionsCCP contain in Sec 1042 only provides a procedural frameworkDIS-Rules contain more specific but still broad rules in Sec 24, 25, 26, 27. Difference to CCP procedure in Book 1 – 9 since arbitrators in Sec 27 have possibility to independently from evidence provided by the parties may investigate the facts
60The further stages of an arbitration (2) Generally, a domestic arbitration includes the following stagesPresentation of facts by the parties including submission of the relevant (e-)documents, possibly written witness statements, expert reportsNormally two rounds of submissionsEvaluation of the relevant facts for the decision of the requests by the arbitral tribunalPossibly bifurcation of proceedingTaking of evidence, controlled by the tribunal, some times verbatim protocolPost-hearing briefsDrafting to the award
61The further stages of an arbitration (3) No or only limited involvement of the DIS in the course of an arbitration, no „scrutiny“ of the arbitration agreement, the arbitration process or the award. In practice the DIS nevertheless gives guidance and follows the arbitrationIn ad hoc proceedings there is no institution which follows the proceedingsNo Terms of Reference, no time management requirementsBest practice guides (?)
62The role of the state courts The intervention of state courts is very limited and an exception (only to the extent permitted by Sec 1026 CCP)Primary situations where an intervention might take place:Declaration of admissibility or inadmissibility of arbitrationInterim reliefAssistance in constituting the arbitral tribunalAssistance in connection with the taking of evidenceRecognition and enforcement of the award
63The role of the state courts (2) Recognition of the arbitration agreementEnforcing the agreement (Sec 1032 CCP), pursuant to Sub 1 an action before a state court is inadmissibleAnti-suit injunctions ? („West Tankers“ : Inadmissible where Brussels I regulation applies)Declaration of (in)admissibility of an arbitration (Sec 1032 Sub 2 CCP)Application to OLG, only permissible until tribunal has been constituted, thereafter exclusively to be dealt with by tribunalInterim Measures (see separate slides)Support and control during constitution processAppointment of sole arbitrator or chairman (Sec 1035 Sub 3 CCP)Replacement of arbitrator, challenge of arbitrators, if tribunal dismissed the challenge (Sec 1037 Sub 3, Sec 1038 Sub 1 CCP)
64The role of the state courts (3) Support in connection with the taking of evidence and other measures (Sec 1050 CCP)To compensate lack of sovereign power of the tribunalUpon application of one party or the tribunalSummons and interrogation of witnessesExcursus: US 28 U.S.C. § 1782a
65Interim relief Alternative 1 Alternative 2 Request for interim relief to state courtAlternative 2Request to arbitral tribunalWhich issues exist ? What seems preferable ?State courts are competent to render interim measures (Sec 1033 CCP, also with regards to arbitrations with seat outside of Germany; Sec 1025 Sub 2 CCP)
66Interim relief (2) Alternative 2: An arbitral tribunal is competent to render interim relief pursuant to Sec (1) CCP, which must be declared enforceable, Sec 1041 Sub 2 CCP
67Expedited proceedings (DIS) Rationale: Arbitrations must be less time-consuming, i.e. consume less efforts and money; arbitrations must be simpler to organize without endangering the principles laid down in the existing practiceCCP does not provide expedited proceedings„Supplementary Rules for Expedited Proceedings“Issued by DIS in 2008, must be agreed on expresslyMaximum Duration of proceeding: 6/9 months(Sec 1) but in full compliance with Sec 24 DIS-RulesSole arbitrator as default (Sec 3), shorter periodsShorter periods for submissions (Sec 4)Time schedule, two rounds of submissions, guidance by the tribunal (Sec 5)
68Expedited Proceedings (2) Time limits may be modifiedIf parties and arbitrators cannot comply with the time-limits the jurisdiction remains unaffected (Sec 6)The tribunal may in abstain from stating the facts in the award (Sec 7)Limited practical successMore success of (mandatory) expedited proceeding pursuant to the Swiss Rules
69Arbitrating corporate disputes (DIS) Rationale: Corporate disputes for a long time have been considered non-arbitrable due to its impact on other shareholdersThe Federal Supreme Court in its decisions „Schiedsfähigkeit I“ and „Schiedsfähigkeit II“ (BGH NJW 2009, 1962) finally permitted to arbitrate corporate shareholder disputes, provided certain prerequisites are fulfilledImplemented in „Supplementary Rules for Corporate Law Disputes“ (in force since 2009)
70The course of an international arbitration proceeding The ICC rules and its featuresWhat differentiates an international arbitration from a domestic arbitration ?Some elements of the common law approach to arbitrationThe IBA Rules on the Taking of Evidence in International ArbitrationOther elements of „best practice“
71The ICC Rules and its features Revised in 2012The ICC Court of Arbitration and the ICC SecretariatContain many quality assurance elementsArt 6 Rejection of obviously impermissible requests by the CourtArt Selection of arbitrators by the Court or NCsArt 23 Terms of referenceArt 24 Case management conferenceArt 33 ScrutinyAnnex IV Management TechniquesThe ICC Commission on Techniques for Controlling Time and Costs in international arbitration
72What differentiates an international arbitration from a domestic arbitration ? Different legal regimes (lex fori) lead to unexpected standards the participants to an arbitration have to comply withExample: Settlement discussions„Best practice“, lex fori and applicable substantive law may lead to discrepancies which have to be bridgedDifferent legal cultures lead to different expectationsOn part of the parties to the arbitrationOn part of the arbitratorsLack of certainty as to the procedure followed may lead to unpredictability
73Some elements of the common law approach to arbitration Civil law approachThe „relative truth“Common law approachThe search for „real truth“ (US) or the „truth“ (UK)Documents vs oral testimonyConcept of materiality and relevanceElectronically Stored Information (ESI)Procedure driven by Counsel rather than by the judgesWitness statements; cross-examination; re-crossBattle of the experts
74The IBA Rules on the Taking of Evidence in International Arbitration Revised in 2010Try to bridge different approaches in civil law and common lawScope „Guidelines for international arbitration“Fairness and good faith as implied guidelinePreparation by the tribunalDocument production (Art 3)E-document productionWitness and expert depositionPrivileges
75Other elements of „best practice“ Case Management(E-)Document productionWitness testimonyUse of ExpertsAssistance to the tribunalDeliberations„Relationstechnik“ ?Drafting of the awardDissenting opinionsMore „Softlaw“ or is there enough already ?
76The true „best practice“ No „one size fits all“Expectation ManagementTailormade arbitrationLex foriWhat do the parties expect ?In case of discrepancies: Accommodate the needs of the partiesDiscussion, Agreement or Order ?
77The Making of the Award Decision making (Sec 1052 CCP) Deliberations and voting (Sub 1)Refusal of an arbitrator to participate (Sub 2)Formalities (Sec 1054 CCP)In writingSigned by the arbitral tribunal (majority)Specify the place and date of arbitrationShall state the reasons on which the award is based
78The making of the award (2) Contents of the awardRecitalsProcedural historyFacts of the caseReasonsDispositive sectionsPlace and dateSignature of the arbitratorsDissenting OpinionDelivery of the award
79Effect of the awardSame effect between the parties as a final and binding court judgment (Sec 1055 CCP)Possibility to make certain corrections and interpret the awards pursuant to Sec 1058 CCPRes iudicata (limited to dispositive section and to the parties)No agreement to appeal permissible under German lawExceptions from the binding effectIf the award is set aside (Sec 1059 CCP)Foreign awards are binding only to the extent they have become final under the lex arbitri
80Types of awards Final awards Partial awards Interim/interlocutory awardsDecision on jurisdictionAward on claim in principle
81Settlement No need for tribunal to promote settlement discussions Settlement by means of a consent award (Sec Sub 2 CCP)AlternativeTermination of proceeding pursuant to Sec 1053 Sub 1 CCP
82Decision on costsTribunal has to mandatorily decide on costs (Sec 1057 CCP)Except if parties have agreed otherwiseThe decision has to state the exact amountsIt is possible to decide costs in a separate cost awardCosts include administrative costs of institute (if applicable), the fees and expenses of the tribunal and the costs of the partiesIn case of a separate cost award the decision can be contested separately too
83Recourse against the award Application for setting aside (Sec 1059 CCP)Constitutionally required control of the arbitration processIn line with effect of Sec 1055 CCPLargely in the disposition of the parties to the arbitrationLimiting function: only by an application for setting aside in accordance with Sub 2 and 3, i.e. no review on the meritsNo waiver permissible in advance but after award has been renderedObject of setting aside proceedingOnly awardsOnly domestic awards (i.e. with seat of arbitration in Germany)To be treated separately from proceeding to declare domestic award enforceable (Sec 1060 CCP)
84Recourse against the award (2) Setting aside proceedings have to brought within three months (Sec 1059 Sub 3 CCP)To appeals court (Sec 1063 CCP) hearing mandatory,Grounds for setting aside: (Sec 1059 Sub 2 CCP)Literally taken from Model Law and Art V of New York ConventionSub 1: grounds to be pleaded by partiesSub 2: grounds to be taken into account ex officioSub 1:Lack of valid arbitration agreementViolations of the right to be heardExcess of authorityFlaws in the composition of the tribunal or the procedure
85Recourse against the award (3) Sub 2 (ex officio)Non-arbitrabilityConflict with public policy (ordre public)“if the award led to a result that obviously violates basic principles of German law, especially if it is inconsistent with constitutional rights”Form of decisionOrder, appealable to Federal Supreme CourtConsequence of a setting asideArbitration agreement becomes operable again (Sec 1059 Sub 3)Consequence of a rejection to set asideDetermination with res iudicata that alleged defects do not exist (Sec 1060 Sub 2 CCP)
86Recognition and enforcement of arbitral awards in Germany (Domestic Award) German approach different from Model Law and NYC 1958 since it differentiates between domestic and foreign awardsDomestic awards (Sec 1060 CCP) are considered final and binding per se (Sec 1055 CCP) unless it is set aside pursuant to Sec 1059 CCP (application only permissible within three months period)Pursuant to Sec 1060 CCP the award is not per se enforceable but has to be declared enforceableDeclaration will be granted in the absence of a reason to set aside in Sec 1059 Sub 2 CCPApplication requiredProcedure regulated in Sec 1063, 1064 CCPAppealable to Fed Supreme Court
87Recognition and enforcement of arbitral awards in Germany (Foreign award) For the recognition and enforcement of foreign arbitral awards Sec 1061 CCP directly refers to the New York Convention of 1958Recognition occurs automatically provided that no grounds to resist enforcement existRequest to Appeals Court where debtor or assets are located (Sec 1062, 1063 CCP)Foreign award is defined pursuant to NYC 1958Grounds to refuse EnforcementLack of a valid arbitration agreement (Art V (1)(a) NYC 1958Violations of the right to be heard (Art V (1)(b) NYC 1958Excess of Authority (Art V (1)(c) NYC 1958Irregularities in the Constitution of the Tribunal (Art V (1)(d)
88Recognition and Enforcement of arbitral awards in Germany (Foreign awards 2) Lack of a final and binding award (Art V (1)(e)Ground that have to be considered “ex officio”Lack of objective arbitrability (Art V (2)(a)Violation of public policy (Art V (2) (b)Annulment of the award in its country of origin constitutes a ground to refuse the declaration of enforceability (Art V (1) (e)