[Guozun International Lawyers] German Lawyer’s Analysis: German International Arbitration Laws and Regulations for 2025

Arbitration is a common method of dispute resolution in Germany. The relevant rules for ad hoc arbitration are contained in Book 10 of the German Code of Civil Procedure. In order to promote the development of domestic and international arbitration, the German legislature has incorporated substantial portions of the UNCITRAL Model Law. As a result, the arbitration rules applicable in Germany are broadly consistent with those of other major arbitral seats around the world.

Germany is a contracting state to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (the New York Convention). Germany has also signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States of March 18, 1965, the European Convention on International Commercial Arbitration of April 21, 1961, and the Protocol on Arbitration Clauses of September 24, 1923. In addition, Germany has concluded numerous bilateral treaties concerning international arbitration.

Germany does not have a separate standalone arbitration statute specifically for international arbitration.

Germany’s principal arbitral institution is the German Arbitration Institute (DIS). The DIS has issued arbitration rules, including specific provisions for expedited proceedings and corporate disputes. ICC Germany is the German representation of the International Chamber of Commerce and serves as a permanent liaison between members of the Chamber and its international headquarters.

I. Arbitration Agreement

The parties may agree to arbitration either through an arbitration clause in the main contract or through a separate arbitration agreement. Under current statutory law, both must be concluded in writing in order to be valid and binding. The arbitration agreement entered into by the parties does not need to be contained in a single document. For business-to-business transactions, a proposed reform of German arbitration law set out in the draft of June 26, 2024 provides that arbitration agreements would no longer need to satisfy a written-form requirement. However, whether that proposal will be implemented by the next German government remains to be seen.

The minimum content of arbitration clauses and agreements follows from their definition. The parties agree to submit to an arbitral tribunal all or certain disputes that have arisen or may arise between them in connection with a specific contractual or non-contractual legal relationship. Model arbitration clauses of the ICC, the DIS, the LCIA, and other arbitral institutions are widely used.

In principle, any claim under property law may be the subject of arbitration. Non-monetary claims are also arbitrable, provided the parties are entitled to settle the dispute over the relevant subject matter. There are certain restrictions on the arbitrability of disputes relating to shareholder resolutions.

The provisions of the German Code of Civil Procedure on ad hoc arbitration do not contain specific rules on joinder of third parties or consolidation of arbitrations, and it is generally considered that the relevant rules applicable in court proceedings do not apply to arbitration. Multiple claimants or respondents bound by an arbitration agreement may participate in the arbitration from the time the proceedings are initiated. Any later joinder or consolidation will generally require the consent of all parties and the arbitrators.

The DIS Arbitration Rules distinguish between multi-contract arbitrations and multi-party arbitrations. A multi-contract arbitration is one involving disputes arising out of or in connection with more than one contract, while a multi-party arbitration involves claims concerning multiple parties. If all parties to the arbitration agree, disputes arising from multiple contracts may be resolved in a single arbitration. This also applies where claims are brought under several arbitration agreements, provided those agreements are compatible with one another. Multi-party arbitration is permitted where there is an arbitration agreement binding all parties to resolve the claims in a single arbitration, or where all parties have otherwise agreed to that effect. Multi-contract arbitration and multi-party arbitration may also be combined.

The DIS Arbitration Rules also contain provisions on joinder of parties. Before the appointment of any arbitrator, any party wishing to join an additional party to the arbitration may submit a request for arbitration against that additional party to the DIS. The additional party must then, within the period set by the DIS, submit its comments on the constitution of the arbitral tribunal and its response to the request for arbitration. The arbitral tribunal will then apply the rules on multi-party arbitration, and, where claims are based on multiple contracts, the rules on multi-contract arbitration, in order to decide whether claims against or by the additional party may be resolved in the pending arbitration.

Since 2024, the DIS has introduced the Supplementary Rules for Third-Party Notices (DIS-TPNR), which parties may incorporate into any arbitration clause. These rules are based on the model of third-party notice under the German Code of Civil Procedure. Where a party believes that, if the dispute is decided against it, it may have a claim against a third party, or fears that a third party may assert a claim against it, agreement on the Supplementary Rules for Third-Party Notices can ensure that the award rendered in the original arbitration will have effect in a later dispute between that third party and one of the original parties to the arbitration, for example in contractor-subcontractor or supply chain situations. However, this is only possible if the third party agrees to the application of those rules.

The arbitral tribunal has the authority to decide on its own jurisdiction, including the existence and validity of the arbitration agreement. For this purpose, the arbitration clause is to be treated as an agreement separate from the other terms of the contract. If the tribunal finds that it has jurisdiction, it should in principle rule on jurisdictional objections raised by the parties through an interim award. In that case, each party has the right to request a court decision. While such a request is pending, the arbitral tribunal may continue the arbitration and may render an award.

II. Arbitral Proceedings

As a rule, arbitral proceedings are commenced by the claimant filing a request for arbitration. In ad hoc arbitration, the request is submitted to the opposing party; in institutional arbitration, it is submitted to the relevant arbitral institution. For ad hoc arbitration, the request must identify the parties, specify the subject matter of the dispute, and refer to the arbitration agreement. The DIS Arbitration Rules also set out additional minimum requirements, such as the specific relief sought, the quantified amount of the claim or an estimate of the monetary value of an unquantified claim, a nomination of arbitrator, and specific proposals regarding the seat of arbitration, the language of arbitration, and the law applicable to the merits.

In practice, the claimant may either submit a short request for arbitration satisfying only the minimum requirements or a full statement of claim. The advantage of the former is that it allows the constitution of the tribunal to begin and limitation periods to be interrupted without the need to spend time drafting a detailed and substantiated statement of claim.

Once the arbitral tribunal has been constituted, it should convene a case management conference as soon as possible to discuss procedural rules and the procedural timetable. The DIS Arbitration Rules contain a list of matters that the tribunal should address at the case management conference in order to improve efficiency. For example, with the consent of all parties, the tribunal may give non-binding assessments of factual or legal issues. The Rules encourage parties to participate in the case management conference.

The provisions of the German Code of Civil Procedure on ad hoc arbitration do not provide for expedited proceedings, whereas Annex 4 to the DIS Arbitration Rules states that the final award should be rendered no later than six months after the case management conference. To accelerate the proceedings, each party may submit only one written submission in addition to the request for arbitration and the answer. The tribunal holds only one oral hearing, including the taking of evidence.

In both ad hoc arbitration and arbitration under the DIS Arbitration Rules, oral hearings may be held outside the seat of arbitration unless the parties have agreed otherwise.

The provisions on taking evidence in both the German Code of Civil Procedure and the DIS Arbitration Rules are relatively brief, and the matter is primarily left to party agreement. In the absence of agreement, the arbitral tribunal determines how evidence is to be taken. Common forms of evidence include witness examination, expert examination, party examination, expert reports, documentary evidence, and tribunal inspection of physical evidence. The only specific rule in the German Code of Civil Procedure on evidence concerns expert reports and provides that the tribunal may appoint experts to report on specific issues determined by it. The tribunal may require a party to provide information to the expert or to produce documents or objects relevant to the proceedings. If a party requests it, or if the tribunal considers it necessary, the expert must attend a hearing. At the hearing, the parties may question the expert and may present their own experts to give opinions on the disputed issues.

The DIS Arbitration Rules provide that the arbitral tribunal shall ascertain the facts relevant to deciding the dispute and is not limited to considering only the evidence presented by the parties. Accordingly, the tribunal may decide on its own initiative to appoint experts, question factual witnesses not called by the parties, and order a party to produce or provide documents or data.

In domestic arbitration cases, the taking of evidence typically follows the model of court proceedings and is based primarily on the principle that each party bears the burden of proving the facts on which it relies, while the possibilities of obtaining documents from the opposing party are limited. As a rule of thumb, a party may request the production only of specific documents that it can identify with sufficient precision and for which it can show relevance to the outcome of the dispute. By contrast, requests for all documents relating to the disputed issues, or for documents whose existence has not yet been established, are not permitted. Compared with international arbitration, arbitral tribunals in domestic arbitration hearings are also generally more active in examining witnesses or experts, rather than leaving questioning primarily to party cross-examination.

In international arbitration, arbitral tribunals and parties often adopt procedural features from other jurisdictions, such as limited document production, witness cross-examination, or expert conferencing. This may include reference to the IBA Rules on the Taking of Evidence in International Arbitration.

The arbitral tribunal, or a party with the tribunal’s consent, may request court assistance in taking evidence or performing other acts that fall within judicial authority and cannot be carried out by the tribunal itself. The court must deal with such request in accordance with its own procedural rules. Arbitrators are entitled to attend court hearings for the taking of evidence and to ask questions.

Pre-trial disclosure is not recognized under German law. As a result, issues of legal privilege are not as significant in Germany as they are in some other jurisdictions. In principle, German law recognizes a lawyer’s right to refuse to testify on matters covered by professional confidentiality obligations. That “privilege” also extends to documents held by the lawyer, but not to documents held by other parties, including the lawyer’s client, even if those documents were prepared by the lawyer. However, where parties agree in arbitration to produce documents, they will usually also agree on the protection applicable to such documents.

The German Code of Civil Procedure does not expressly provide for confidentiality in ad hoc arbitration. Since there is academic and practical debate over whether arbitration clauses or agreements inherently contain a duty of confidentiality, and the majority view tends to reject such implication, parties wishing to keep confidential the information discussed during ad hoc arbitration, or even the fact that arbitration is taking place, should make an express agreement to that effect, or choose institutional rules that expressly provide for confidentiality, such as the DIS Arbitration Rules. More recently, the Federal Constitutional Court’s 2022 decision concerning a sports arbitration agreement in the Pechstein case sparked broad discussion about the principle of confidentiality in arbitration. According to that decision, in certain circumstances, an arbitration agreement may be regarded as invalid if it does not provide for a right to a public hearing. The decision emphasized the principle of openness of judicial proceedings guaranteed by the German Constitution and the European Convention on Human Rights, which may only be waived by the voluntary agreement of both parties.

There are no specific German legal provisions implementing the LCIA Notes or IBA Guidelines. However, the parties are generally free to choose the arbitration rules of foreign arbitral institutions. This freedom is limited only by certain mandatory provisions of German law, especially the principles of equal treatment, the right to a fair hearing, and the right to legal representation.

Disclaimer

Laws and procedures may change. This article provides general information only and does not constitute legal advice. If you encounter a legal dispute overseas, please contact us immediately to consult a professional foreign-related lawyer.