International arbitration is a well-established and widely recognised method of resolving commercial disputes in Germany, particularly in a cross-border context. While state courts – especially in purely domestic matters – continue to play a central role, German parties are regularly turning to arbitration when dealing with complex, international and/or particularly sensitive disputes. Even in a purely domestic context, arbitration (often ad hoc) is commonly used (eg, in shareholders’ agreements).

This is especially true when contracting with foreign partners and seeking a flexible form of dispute resolution with decisions enforceable worldwide. In such cases, arbitration is often agreed upon in the contract as the preferred dispute resolution mechanism.

Germany is a popular seat of arbitration, most often in disputes where at least one of the parties is German, but also occasionally in disputes with two foreign parties. As a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) and with an arbitration law based on the 1985 UNCITRAL Model Law on International Commercial Arbitration (the “UNCITRAL Model Law”), Germany is considered an arbitration-friendly jurisdiction.

As an industrialised, globally-connected economy, Germany has seen significant international arbitration activity in most, if not all, industries. This has been especially marked in the energy, construction and infrastructure, manufacturing (including automotive) and healthcare sectors.

Germany’s energy transition and its role in the broader European decarbonisation strategy have led to a surge in disputes related to renewable energy projects, grid expansion and regulation, and long-term supply contracts, as well as investment protection claims under international treaties. Russia’s full-scale invasion of Ukraine has also led to many disputes in this sector, for instance regarding gas supply and gas pricing.

Large-scale infrastructure and construction projects, often linked with the aforementioned energy transition, frequently give rise to arbitration proceedings due to their scale and complexity.

Germany’s export-driven economy has also led to sustained international arbitration activity in its manufacturing sector, particularly the automotive industry, as well as in the healthcare industry. This is due to the fact that Germany is home to many global players in these sectors.

In Germany, the most commonly used arbitral institutions for international arbitration are the German Arbitration Institute (DIS) and the International Chamber of Commerce (ICC). The DIS is well respected for its neutrality, efficiency and modern arbitration rules, which were last revised in 2018 to align with international best practices. It is frequently chosen in disputes involving at least one domestic party. The ICC is especially popular for high-value or complex cross-border disputes. Apart from these, German parties also regularly use the Swiss Arbitration Centre, the Vienna International Arbitration Centre (VIAC), and, in investment arbitration, the International Centre for Settlement of Investment Disputes (ICSID).

Section 1062 of the German Code of Civil Procedure (ZPO) governs the jurisdiction of courts in relation to various arbitration-related disputes. It specifically assigns competence to the higher regional courts (Oberlandesgerichte) for decisions concerning:

• the appointment, challenge or removal of arbitrators;
• the granting of interim relief; and
• the recognition, enforcement or annulment of arbitral awards.

Where the arbitration is seated in Germany, the higher regional court specified in the arbitration agreement – or, in the absence of such designation, the court in the district where the seat is located – has jurisdiction over the following:

• appointing arbitrators (Sections 1034 and 1035 ZPO), ruling on challenges (Section 1037) or terminating an arbitrator’s mandate (Section 1038 ZPO);
• determining the admissibility of arbitration (Section 1032(2) ZPO) and confirming the arbitral tribunal’s jurisdiction (Section 1040 ZPO);
• issuing interim measures (Section 1033 ZPO) and providing judicial assistance for evidence-taking or other acts the arbitral tribunal cannot perform itself (Section 1050);
• enforcing, modifying or setting aside interim measures issued by the arbitral tribunal (Section 1041 ZPO); and
• setting aside arbitral awards (Section 1059 ZPO) or declaring them enforceable or not enforceable in Germany (Section 1060 et seq ZPO).

German arbitration law is set out in Sections 1025 to 1066 of the ZPO. It is based on the UNCITRAL Model Law, but differs in several respects. By way of example:

• Applicability of German arbitration law: German arbitration law governs both domestic and cross-border arbitration proceedings – whether commercial or otherwise – provided the arbitration is seated in Germany (Section 1025(1) ZPO). In contrast, the UNCITRAL Model Law is limited to international arbitration (Article 1).
• Early determination of “arbitrability”: Section 1032(2) ZPO enables parties to request a German court to decide on the admissibility of arbitration before the arbitral tribunal is constituted. This mechanism allows for an early judicial determination of jurisdictional issues, a feature not found in the UNCITRAL Model Law.
• Interim relief by arbitral tribunals: Under Section 1041 ZPO, arbitral tribunals seated in Germany are empowered to grant interim measures. This provision mirrors Article 17 of the UNCITRAL Model Law. However, the 2006 amendments to the UNCITRAL Model Law go further by elaborating on interim measures and introducing provisions on preliminary orders (Articles 17-17J), which are not fully reflected in German law.
• Arbitration defence in court proceedings: Similar to Article 8(1) of the UNCITRAL Model Law, Section 1032(1) ZPO allows a party to invoke an arbitration agreement as a defence when court proceedings are initiated. However, the German provision mandates that the court must declare the action inadmissible, whereas the UNCITRAL Model Law instructs courts to refer the parties to arbitration. This distinction means that German courts are required to conduct a full examination of the arbitration agreement’s validity and scope, unlike courts in jurisdictions that apply only a prima facie review.
• Judicial assistance: Section 1050 ZPO, inspired by Article 27 of the UNCITRAL Model Law, grants German courts the authority to assist arbitral tribunals not only in taking evidence but also in performing other judicial acts that require coercive powers. Notably, this assistance is available even when the arbitration is seated outside Germany, whereas the UNCITRAL Model Law limits such support to arbitrations seated within the jurisdiction. Additionally, Section 1050, sentence 3 ZPO – without a counterpart in the UNCITRAL Model Law – explicitly grants arbitrators the right to participate and ask questions in evidentiary proceedings conducted by state courts.

On 26 June 2024, the German Federal Ministry of Justice introduced a legislative proposal aimed at updating the national arbitration framework (the “Draft Bill”). This initiative, designed to modernise procedural rules and align more closely with international standards, was progressing through the legislative process. However, the reform efforts were interrupted due to the dissolution of parliament following early elections in February 2025. As a result, the bill is not expected to be enacted in the immediate future. Nonetheless, if the proposal is revived during the current legislative term and ultimately passed, it would bring several significant innovations to the existing legal regime, including:

• recognising the jurisdiction of the English-speaking Commercial Courts in arbitration-related matters;
• clarifying the enforceability of interim measures issued by foreign arbitral tribunals, including criteria for rejecting enforcement applications;
• permitting arbitral tribunals to publish anonymised versions of awards, subject to party consent;
• enabling arbitral awards to be issued in electronic form;
• allowing dissenting and separate opinions to be included in awards;
• introducing a new procedural remedy for setting aside awards based on criminal law grounds, inspired by the restitution and retrial mechanism in state-court litigation; and
• providing a mechanism for court appointment of co-arbitrators in multiparty disputes when parties on one side fail to agree, and potentially appointing the opposing party’s arbitrator after consultation.

Under the “most favourable law test” set out in Article VII(1) of the New York Convention, an arbitration agreement is enforceable under the laws of Germany if it satisfies the requirements of either German substantive law or German conflict-of-law rules (Federal Court of Justice, 26 November 2020, I ZR 245/19).

Pursuant to Section 1029(1) ZPO, a valid arbitration agreement must:

• reflect the parties’ intention to submit existing or future disputes arising from a defined legal relationship – contractual or otherwise – to arbitration. In practice, this also entails an express exclusion of state court jurisdiction; and
• comply with the requirements of objective arbitrability (Section 1030 ZPO) and formal validity (Section 1031 ZPO).

An arbitration agreement that fails to meet these requirements is ineffective unless the defect is remedied under Section 1027, 1031(6) or 1040(2) ZPO, or the deficiency is immaterial.

Additionally, if the parties proceed with arbitration without raising the defect, it is considered cured.

The arbitration agreement must be in writing, either signed by the parties or evidenced through written communications (eg, email) that document the agreement.

It is not necessary for the arbitration agreement to specify procedural elements such as the seat of arbitration, the number of arbitrators, the applicable arbitration rules, or the language of the proceedings. Nonetheless, it is advisable for parties to address these aspects in the agreement to avoid procedural uncertainty.

Where a contract refers to a separate document containing an arbitration clause, that clause becomes part of the contract unless the reference is timely and expressly objected to.

Under German procedural law, any dispute involving a financial or commercial interest is generally eligible for arbitration. This includes claims for monetary relief, as well as disputes touching on competition law or intellectual property rights. The notion of economic interest is interpreted broadly. Moreover, even matters lacking a direct financial component may be arbitrable if the parties are legally permitted to settle the dispute (Section 1030(1) ZPO).

However, there are statutory exceptions. For instance, disputes concerning the existence of residential leases within Germany fall outside the scope of arbitration (Section 1030(2) ZPO).

The arbitrability of patent-related issues – particularly in the context of licensing agreements – has sparked considerable debate. While the enforceability of patent validity determinations remains contentious, German courts have acknowledged the arbitrability of certain IP-related claims, at least between the parties involved. For instance, the Regional Court of Munich I (25 May 2021, 21 O 8717/20) upheld the arbitrability of a claim involving the transfer of a contested European patent application, along with a related declaratory damages claim.

Corporate disputes have been the subject of a series of landmark rulings by the Federal Court of Justice, known collectively as the Schiedsfähigkeit decisions:

• The court initially rejected the arbitrability of challenges to shareholder resolutions in limited liability companies (GmbH), citing concerns over the binding effect of arbitral awards on non-participating shareholders (29 March 1996, II ZR 124/95, “Schiedsfähigkeit I”).
• The court later reversed its earlier stance, recognising the arbitrability of such disputes, provided the arbitration procedure ensures equivalent protection to that offered by state courts. This includes safeguarding minimum participation rights and ensuring access to legal remedies for all affected parties (6 April 2009, II ZR 255/08, “Schiedsfähigkeit II”).
• The court then extended the procedural safeguards established in Schiedsfähigkeit II to disputes within partnerships (eg, Kommanditgesellschaften), affirming that similar standards apply (6 April 2017, I ZB 23/16, “Schiedsfähigkeit III”).
• The court clarified that these enhanced requirements apply only where the partnership agreement stipulates that disputes over resolution validity are to be resolved with the partnership itself, rather than among individual partners (23 September 2021, I ZB 13/21, “Schiedsfähigkeit IV”).

In assessing which law governs the validity of an arbitration agreement, the Federal Court of Justice follows a structured approach grounded in Article V(1)(a) of the New York Convention, as clarified in its judgment of 26 November 2020 (I ZR 245/19).

As a starting point, if the parties have expressly designated a particular legal system to govern the arbitration clause, that choice will generally be upheld – even if it diverges from the law applicable to the underlying contract.

Where no explicit choice is made, the court will examine the circumstances to determine whether an implied choice of law can be inferred from the agreement or the broader contractual context.

If neither an express nor an implied choice is evident, the fallback rule is to apply the law of the arbitral seat. This default ensures predictability and aligns with international practice, particularly where the seat has a close connection to the arbitration proceedings.

Germany is an arbitration-friendly jurisdiction and arbitration agreements are enforced by courts, as long as they are not null and void (ex tunc invalidity, eg, for lack of the required form), inoperative (ex nunc invalidity, eg, where the arbitration agreement was terminated) or incapable of being performed. Where some provisions of an arbitration agreement are erroneous (eg, where it designates a non-existent arbitration institution), German courts will attempt to give effect to the arbitration agreement by way of supplementary interpretation (ergänzende Vertragsauslegung).

German arbitration law follows the principle of separability, under which the arbitration clause is treated as legally distinct from the main contract (Section 1040(1), second sentence ZPO). This means that the arbitration agreement must be evaluated independently in terms of its existence, validity, and scope. As a result, the arbitration clause does not automatically become invalid if the main contract is found to be void or terminated, and the enforceability of the arbitration agreement remains intact even if the underlying contract ceases to exist. However, the principle of separability does not preclude that both the arbitration agreement and the main contract may be affected by the same underlying defect. In particular, if there is a lack of consent to the main contract (eg, if one of the parties signed the contract following threats), this will generally extend to the arbitration clause contained within it.

Parties are allowed to freely determine the number of arbitrators, the method of their appointment, and the qualifications they should possess. In domestic arbitration proceedings especially, it is not uncommon for professionals such as engineers, accountants or other subject-matter experts to be selected as arbitrators, depending on the technical nature of the dispute.

However, this freedom is subject to safeguards. The most significant limitation concerns the impartiality and independence of arbitrators. They are under a continuing duty to disclose any circumstances that may give rise to justifiable doubts in this regard. While there are no statutory nationality requirements, parties remain free to impose such conditions contractually. Under Section 1036(2) ZPO, an arbitrator may be challenged if circumstances exist that give rise to justifiable doubts regarding their impartiality or independence.

Beyond this, party autonomy may be restricted by public policy considerations. Any appointment mechanism that violates fundamental principles of fairness or procedural equality will be deemed invalid. Section 1034(2) ZPO introduces a corrective mechanism where the arbitration agreement grants one party a dominant role in the appointment process – such as the exclusive right to nominate the sole or presiding arbitrator. In such cases, the disadvantaged party may, within two weeks of becoming aware of the arbitral tribunal’s composition, request the competent court to intervene and appoint a substitute arbitrator.

If there is no agreement between the parties on the appointment procedure, Section 1035(3) ZPO provides a standard procedure. In the case of a three-member arbitral tribunal, each party appoints its own arbitrator, and the two party-appointed arbitrators then appoint the presiding arbitrator.

Should a party fail to appoint its own arbitrator and subsequently fail to do so within one month of a request by the other party, the other party may request the court to make the appointment. If the party-appointed arbitrators fail to agree on the chairperson within one month of their appointment, or if the parties fail to agree on a sole arbitrator, the court will make the appointment upon request of a party.

According to Section 1035(4) ZPO, if the parties have agreed on a procedure for appointing arbitrators and one party fails to act as required, or if the parties or co-arbitrators cannot reach an agreement, the competent court may be called upon to make the appointment. This ensures that the arbitration process is not stalled due to procedural deadlock.

For multiparty arbitrations, the current version of the German Arbitration Act does not provide for any specific rules. The Draft Bill (see 2.2 Changes to National Law) provides that where parties aligned on one side of the dispute fail to reach consensus on a joint arbitrator, the competent court will assume responsibility for the appointment.

In Germany, courts may intervene in the selection of arbitrators, but only under specific conditions and within the framework set out in the ZPO, particularly in Sections 1034 and 1036. This intervention is designed to support, not override, party autonomy, which remains a core principle of German arbitration law.

The courts will intervene to appoint arbitrators where the parties and/or the co-arbitrators fail to do so (Section 1035 (3)-(5) ZPO, see also 4.2 Default Procedures).

Furthermore, Section 1037 ZPO allows a party to request court assistance if a challenge to an arbitrator has been rejected by the arbitral tribunal itself. In such cases, the court will make a final and binding decision on the challenge.

Courts will also intervene where the appointment mechanism violates fundamental principles of fairness or procedural equality (see also 4.1 Limits on Selection).

With regard to challenges, a two-tier system applies:

• A party can file a challenge with the arbitral tribunal (Section 1037 (1)-(2) ZPO).
• If the challenge is dismissed by the arbitral tribunal, the challenging party may apply to the competent higher regional court to decide on the challenge.

Otherwise, the challenging party is generally precluded from invoking the improper constitution of the arbitral tribunal in post-award proceedings that the arbitral tribunal was not properly constituted. The higher regional court is not bound by the decision of the arbitral tribunal or of a third party (such as an institution or an appointing authority). The parties cannot waive recourse to the courts.

Pursuant to Section 1036(2) ZPO, an arbitrator may only be disqualified if circumstances exist that give rise to justified doubts as to their impartiality or independence, or if they do not meet the requirements agreed between the parties.

German arbitration law and the DIS Arbitration Rules do not further qualify the independence and impartiality requirements contained in Section 1036(1) ZPO and Section 9.1 DIS Arbitration Rules. Whether these requirements are fulfilled by a challenged arbitrator is assessed on a case-by-case basis.

The International Bar Association (IBA) Guidelines on Conflicts of Interest in International Arbitration, last updated in 2024 (“IBA Guidelines”), are widely known and used in Germany. Some courts tend to apply the standard applicable to state judges in order to assess whether facts give rise to justifiable doubts as to an arbitrator’s impartiality and independence. In this respect, courts also tend to consider the principles laid down in the IBA Guidelines. Despite that, the courts do not explicitly refer to, or stress that they are not bound by, the IBA Guidelines.

The DIS Arbitration Rules follow an objective approach; ie, the disclosures shall include any facts or circumstances that could cause a reasonable person in the position of a party to have doubts as to the arbitrator’s impartiality and independence (Section 9.4 DIS Arbitration Rules). This disclosure obligation remains for the entire duration of the arbitration (Section 9.6 DIS Arbitration Rules).

An arbitral tribunal’s authority to rule on its own jurisdiction (Kompetenz-Kompetenz principle) is recognised under German law, as codified in Section 1040(1), first sentence ZPO. While arbitral tribunals may render preliminary decisions affirming their jurisdiction, such determinations do not bind the courts. Any attempt by the parties to confer final and binding effect on an arbitral tribunal’s jurisdictional ruling is invalid. However, this does not, in principle, affect the validity of the arbitration agreement itself.

Before the arbitral tribunal is constituted, a party may apply to the competent court for a declaration on the admissibility or inadmissibility of arbitration proceedings, in accordance with Sections 1032(2) ZPO and 1062(1)2 ZPO. Once the arbitral tribunal has been formed, this procedural route is no longer available. This is a special procedure not mirrored in the UNCITRAL Model Law and also applies if the seat of arbitration is outside of Germany (Section 1025(2) ZPO).

In three recent decisions dated 27 July 2023 (I ZB 43/22, I ZB 74/22 and I ZB 75/22), the Federal Court of Justice ruled that a determination of the inadmissibility of arbitration proceedings pursuant to Section 1032(2) ZPO is also permissible for intra-EU arbitration proceedings under the ICSID Convention. The effectiveness of EU law (effet utile) prevails over Article 41 (1) of the ICSID Convention, which states that the tribunal shall determine its competence. This enables the enforcement of the European Court of Justice’s case law on intra-EU arbitration clauses (Achmea judgment) already at the level of admissibility. On 23 July 2024, the German Supreme Court confirmed that the Achmea judgment is constitutional.

If, during the course of the arbitration, the arbitral tribunal asserts jurisdiction, for instance by issuing a preliminary ruling, a party may challenge this assertion by applying to the court within one month of receiving written notice (Section 1040(3) ZPO). The court’s decision on the arbitral tribunal’s jurisdiction is final and binding on the arbitral tribunal.

An award rejecting jurisdiction will be treated as a regular award and it may be set aside by the court on the grounds listed in Section 1059(2) ZPO, though there is no set-aside ground for erroneous refusal to exercise jurisdiction.

Failure to file an application under Section 1040(3), second sentence ZPO within the prescribed timeframe precludes the parties from subsequently invoking the arbitral tribunal’s lack of jurisdiction during set-aside or enforcement proceedings.

So far, the German Arbitration Act does not grant courts the power to review a tribunal’s negative ruling on jurisdiction. The Draft Bill (see 2.2 Changes to National Law) proposes this review competence.

In Germany, parties may go to court to challenge the jurisdiction of the arbitral tribunal either (1) before the arbitral tribunal is constituted (Section 1032(2) ZPO) or (2) within one month after the arbitral tribunal has issued a preliminary ruling affirming its jurisdiction (Section 1040(3) ZPO). A failure to do this precludes the parties from subsequently invoking the arbitral tribunal’s lack of jurisdiction during set-aside or enforcement proceedings (see 5.2 Circumstances for Court Intervention).

When jurisdiction is challenged following the arbitral tribunal’s assertion of competence, the court is not bound by the arbitral tribunal’s factual or legal determinations. Rather, German courts undertake a full de novo review when called upon to assess questions of jurisdiction of an arbitral tribunal. In cases brought under Section 1032(2) ZPO, the court independently evaluates whether a valid arbitration agreement exists and whether the dispute falls within its scope. In practice, German courts follow a pro-arbitration stance and are cautious not to undermine arbitration agreements (see also 3.3 National Courts’ Approach).

The court’s inquiry does not extend to admissibility prerequisites such as the expiry of cooling-off periods, nor does it touch upon the merits of the dispute, both of which remain within the arbitral tribunal’s domain.

If a party initiates court proceedings in breach of an arbitration agreement, the opposing party must invoke its existence prior to the beginning of the oral proceedings (Section 1032(1) ZPO). The party initiating the court proceedings bears the burden of proving the invalidity of the arbitration agreement. The Federal Court of Justice (26 November 2020, I ZR 245/19) has also determined that a motion to stay proceedings based on an arbitration agreement is considered timely if it is submitted in an objection to a default judgment. This applies provided that the default judgment was issued during the preliminary written stage of the proceedings.

This procedure also applies if the seat of arbitration is outside of Germany (Section 1025(2) ZPO). In principle, the courts will make a full review of the validity of the arbitration agreement at this pre-arbitration stage (see also 5.4 Standard of Judicial Review for Jurisdiction/Admissibility). In other jurisdictions, the courts assess the validity of the arbitration agreement only on a prima facie basis. The German approach can save time and costs in case the arbitration agreement was invalid to begin with.

If German law applies to the arbitration agreement, a third party might be bound to it if rights and obligations arising from a main contract containing the arbitration agreement have been validly assigned (in application of Section 401 of the German Civil Code by analogy).

The inclusion of third parties (who are not assignees) in an arbitration agreement is to be established separately, depending on the legal basis for the obligation. Recently, however, the Federal Court of Justice (9 March 2023, I ZB 33/22) confirmed that under German law, the personal scope of an arbitration agreement is generally limited to the contracting parties and their legal successors. An extension of the arbitration agreement to non-parties based on the “group of companies doctrine” does not form part of German arbitration law. Additionally, no distinction is made based on whether the third party is German or foreign.

German arbitration law empowers arbitral tribunals to grant interim measures (Section 1041 ZPO). However, the parties may agree to exclude the arbitral tribunal’s authority to do so (Section 1041(1) ZPO).

Arbitral tribunals enjoy broad discretion in determining the nature and scope of interim relief (eg, attachment, preliminary injunctions), but they lack enforcement powers and cannot compel compliance on their own. To ensure enforceability, judicial assistance is required (Section 1041(2) ZPO). When called upon to enforce such measures, German courts do not reassess the underlying merits of the case, in line with the prohibition of judicial review on the merits (révision au fond).

The validity of ex parte interim measures ordered by the arbitral tribunal remains controversial, but according to the prevailing view, they should be permissible under the same conditions that apply to state courts, including the obligation to grant a subsequent right to be heard to the affected party.

German courts are authorised to issue interim measures both before and during arbitral proceedings, including in cases where the arbitration is seated outside Germany, provided the court has international jurisdiction (Sections 1033 and 1025(2) ZPO). Such relief may be granted ex parte and, depending on the urgency and circumstances, can be issued within 24 hours.

Typical forms of interim protection include pre-award attachments to secure monetary claims, preliminary injunctions to preserve rights or prevent harm, and orders aimed at safeguarding or securing evidence.

Where a party successfully demonstrates that the interim measure was unjustified from the outset, the applicant may be held liable for damages resulting from its enforcement (Sections 945 and 1041(4) ZPO).

German arbitration law does not forbid the use of emergency arbitrators, and decisions of emergency arbitrators will be considered like any other form of interim relief under Section 1041 ZPO. Accordingly, where interim relief is sought in Germany based on a decision rendered by an emergency arbitrator in an arbitration with a foreign seat, deviation from the requirements of Section 1041 ZPO, and, for ex parte relief, the lack of subsequent hearing of the affected party, may pose a problem with the enforcement of the measures by German courts (see also 6.1 Types of Relief).

As emergency arbitrators are not treated differently than the remaining forms of interim relief under Section 1041 ZPO, courts may still intervene once an emergency arbitrator has been appointed.

German arbitration law does not expressly regulate the issue of security for costs. Consequently, if a party applies for such a security, the arbitral tribunal would have the power to grant it, to the extent allowed by the applicable arbitration rules.

Section 110(1) of the Code of Civil Procedure, which requires claimants domiciled outside the European Union or European Economic Area to furnish security for costs upon request in state courts litigation, extends to proceedings seeking the recognition and enforcement of arbitral awards. The Federal Court of Justice (12 January 2023, I ZB 33/22) has given up its previous position and established that Section 110 (1) ZPO applies by analogy to such proceedings.

German arbitration law is set out in Book 10 of the ZPO, ie, in Sections 1025 to 1066.

The procedural steps that must be followed are left to the agreement of the parties and to the arbitration rules they decide to apply (Section 1042(3)). The arbitral tribunal has broad discretion to conduct the proceedings on points where the parties have not reached a procedural agreement or where the arbitration rules are silent (Section 1042(4)). In any case, the arbitral tribunal always has to ensure equal treatment of the parties and the right to be heard (Section 1042(1) ZPO). An arbitral tribunal’s breach of a parties’ procedural agreement can lead to the annulment of an award (Federal Court of Justice, in the so-called Flex-n-Gate v GEA decision).

Under German arbitration law, arbitrators are subject to various duties aimed at ensuring impartiality, procedural fairness and effective case management. These obligations are primarily set out in statutory provisions, for instance:

• Section 1036(1) ZPO requires arbitrators to be impartial and independent, and to disclose any circumstances that may give rise to doubts regarding their impartiality.
• Section 1042(1) ZPO mandates equal treatment of the parties and guarantees their right to be heard.
• Section 1054 ZPO requires arbitrators to render a reasoned award, stating the basis for their decision in fact and law.

While confidentiality is not expressly regulated under German arbitration law, it has been recognised in case law and is reflected in institutional rules, such as Section 44 of the DIS Arbitration Rules.

Section 1042(4) ZPO grants the arbitral tribunal broad discretion to conduct the proceedings, on points where the parties have not reached a procedural agreement or where the arbitration rules are silent (see 7.2 Procedural Steps).

Legal representatives appearing in arbitration proceedings with a German seat do not need to be licensed lawyers.

This is also the case for many arbitration-related procedures in front of state courts, such as applications for the recognition and enforcement of arbitral awards, set-aside proceedings, or even for the appointment of an arbitrator: parties may submit motions or make declarations for the record at the court registry without a lawyer, provided no oral hearing has been scheduled yet.

German arbitration law provides a flexible framework for the collection and presentation of evidence, with no codified rules governing discovery, disclosure or privilege.

Instead, the procedural rules are bespoke. Evidentiary rules are shaped by party agreement, the arbitral tribunal’s discretion (in particular, the special/supplementary procedural rules contained in the first procedural order the tribunal issues), the nature of the dispute and the legal background of the parties. The IBA Rules on the Taking of Evidence in International Arbitration (2020) are used as non-binding guidelines. However, in particular, if German or in general parties from civil jurisdictions are involved, discovery and cross-examination are not necessarily the default rule (see below).

Document production is not a default feature of German-seated arbitrations. In domestic proceedings, it is generally the exception. In international arbitrations involving German parties or governed by German law, there is a discernible trend away from broad document production. Whether production is agreed or ordered depends largely on the parties’ legal and cultural backgrounds and procedural expectations. Notably, German arbitral tribunals are not strictly bound by the principle of party-led production and may investigate facts ex officio (Higher Regional Court Frankfurt, 25 March 2021, 26 Sch 18/20). That document production is not considered the default rule is also set out in Section 27.4(i) and annex 3 to the DIS Arbitration Rules. Under this provision, arbitral tribunals are obliged to address various measures to increase the procedural efficiency of the proceedings during the case management conference; one of them is to address as to whether document production shall take place at all.

Privilege – as known, eg, in England with litigation privilege – only exists in a very limited way. The reason is simple: as document production/disclosure is not part of German domestic court proceedings, no specific rules on privilege (except for attorney-client privilege) exist. However, arbitral tribunals with their seat in Germany are fully aware of the different rules on privilege existing in different jurisdictions and will adopt tailored solutions (eg, applying the strictest standard for all parties involved).

Witnesses play a significant role, though documentary evidence remains central, reflecting domestic litigation practice. In international proceedings, written witness statements are commonly used. Cross-examination is standard in international arbitrations, however, if German parties or civil law traditions are involved, arbitral tribunals often lead the examination, followed by counsel.

Parties may appoint their own experts, and arbitral tribunals may appoint independent experts under Section 1049 ZPO. The arbitral tribunal is responsible for ensuring the impartiality and independence of arbitral tribunal-appointed experts (Sections 1036 and 1049(3) ZPO).

German arbitration law does not prescribe a fixed set of evidentiary rules for arbitral proceedings. Subject to mandatory provisions – such as the right to be heard, equal treatment of the parties, and the right to legal representation – parties are free to agree on the evidentiary framework, including the adoption of institutional rules or bespoke procedures (see above, inter alia, 8.1 Collection and Submission of Evidence).

In the absence of such agreement, arbitral tribunals have broad discretion to determine the rules of evidence, pursuant to Section 1042(4) ZPO. The evidentiary approach typically reflects the legal and cultural backgrounds of the parties and arbitrators, the nature of the dispute, and procedural expectations.

Arbitral tribunals seated in Germany do not possess coercive powers and therefore cannot compel the attendance of witnesses or experts, administer oaths or order third parties to produce documents. However, they may seek the assistance of state courts to carry out such judicial acts pursuant to Section 1050 ZPO.

German arbitration law does not expressly regulate the confidentiality of arbitral proceedings. Nonetheless, the Federal Court of Justice has held that arbitrators are bound by a duty of confidentiality arising from their contractual relationship with the parties, unless otherwise agreed.

The position regarding the parties themselves is less clear. In the absence of an explicit confidentiality clause in the arbitration agreement or the underlying contract, it remains unsettled whether a duty of confidentiality can be implied. As a result, it is common practice for parties and arbitral tribunals to conclude a separate confidentiality agreement at the outset of the proceedings – often incorporated into the terms of reference in institutional arbitrations, such as those conducted under the ICC Rules. Such agreements typically extend to pleadings, expert reports and witness statements.

Unlike the ICC Rules, the DIS Arbitration Rules impose an express duty of confidentiality on parties, counsel and arbitrators (Section 44.1 DIS Arbitration Rules). However, this obligation does not automatically extend to third parties such as experts, witnesses or court reporters, necessitating separate confidentiality undertakings.

As German law does not codify confidentiality obligations, it also does not provide for statutory exceptions. The DIS Arbitration Rules, however, recognise that disclosure may be permitted where required by law, to comply with legal obligations, or in connection with recognition, enforcement or annulment proceedings (Section 44.2). These exceptions are not exhaustive, and additional disclosures may be justified where overriding legitimate interests are at stake. Whether such interests prevail is assessed on a case-by-case basis.

Section 1054 ZPO sets out the formal criteria that an arbitral award must meet to be valid under German law. Specifically:

• the award must be issued in written form;
• the award must bear the signature of the sole arbitrator or, in the case of a three-member arbitral tribunal, of the majority of its members;
• the award must state the reasons for the decision, unless the parties have agreed to dispense with this requirement;
• the award must indicate both the date of the award and the seat of arbitration; and
• a signed copy of the award must be delivered to each party, although German arbitration law does not prescribe a specific method of service.

The Draft Bill (see 2.2 Changes to National Law) proposes that awards may also be rendered in electronic form, provided they are signed using the qualified electronic signatures of the arbitrators. As with written awards, the electronic version must be delivered to the parties, but no particular form of transmission is mandated.

It is also worth noting that an arbitral tribunal’s procedural decision asserting jurisdiction, such as a preliminary ruling, is not considered an arbitral award within the meaning of Section 1054 ZPO. It therefore does not need to comply with the formal requirements applicable to final awards (Higher Regional Court Stuttgart, 10 June 2021, 1 SchH 1/21).

German arbitration law does not impose a statutory deadline for the issuance of an arbitral award. However, Section 1042(3) ZPO permits the parties to agree on a specific timeframe, such as in expedited or fast-track proceedings, between the constitution of the arbitral tribunal and the rendering of the final award.

Such time limits, while contractually valid, must be approached with caution. If the agreed period lapses without an award being rendered, the arbitral tribunal may be deemed functus officio, thereby losing its mandate to decide the dispute. Moreover, failure to adhere to procedural timelines agreed upon by the parties may expose the award to annulment under Section 1059(2) No. 1(d) ZPO (Higher Regional Court Frankfurt, 17 February 2011, 26 Sch 13/10).

German arbitration law imposes no inherent restrictions on the types of remedies that may be granted in a final award. In the absence of limitations agreed upon by the parties, arbitral tribunals are empowered to award any relief that a competent state court could grant in comparable proceedings. This includes but is not limited to compensatory damages, orders for specific performance, declaratory relief and interim measures.

Punitive damages, however, are contrary to ordre public and may not be awarded by a Germany-seated arbitral tribunal, even when applying the substantive law of another state.

The arbitral tribunal’s authority is confined to the scope of the claims submitted by the parties. Relief granted beyond the bounds of the pleadings constitutes an ultra petita ruling, which may expose the award to annulment or refusal of enforcement under Section 1059(2) No. 1(c) ZPO and Article V(1)(c) of the New York Convention.

Under Section 1057 of the Code of Civil Procedure, arbitral tribunals in Germany are vested with broad discretion to allocate the costs of the proceedings, unless the parties have agreed otherwise. In exercising this discretion, arbitral tribunals are expected to consider all relevant circumstances, with particular emphasis on the outcome of the dispute. In practice, the prevailing approach among German arbitration practitioners is to apply the “costs follow the event” principle.

However, arbitral tribunals increasingly factor in additional considerations when determining cost allocation. These may include procedural conduct such as obstructive tactics, the handling of jurisdictional objections, excessive document production requests or non-compliance with procedural orders. As a result, a party may be ordered to bear a portion of the arbitration costs – including arbitrator fees and legal expenses – regardless of the substantive outcome.German arbitration law is silent on the question of interest. If and to what extent interest will be awarded depends on the substantive law applicable to the dispute.

Section 1059(2) ZPO provides an exhaustive catalogue of grounds on the basis of which an arbitral award may be annulled. These grounds, which mirror those found in Article V of the New York Convention, include:

• lack of capacity of a party to conclude the arbitration agreement or invalidity of the agreement under the applicable law (Section 1059(2) No. 1(a));
• failure to provide proper notice of the proceedings or denial of the opportunity to assert defence (Section 1059(2) No. 1(b));
• the award addressing matters beyond the scope of the arbitration agreement, although the setting aside may be limited to the incriminated parts of the award if these are separable (Section 1059(2) No. 1(c));
• procedural irregularities or improper constitution of the arbitral tribunal that likely affected the outcome (Section 1059(2) No. 1(d));
• non-arbitrability of the subject matter under German law (Section 1059(2) No. 2(a)); and
• violation of German public policy (ordre public) (Section 1059(2) No. 2(b)).

German courts interpret these grounds narrowly, and successful annulment applications remain rare, reflecting the German jurisdiction’s pro-arbitration stance.

Two categories of grounds need to be distinguished: the grounds under Section 1059(2) No. 1 have to be invoked by a party in its application for annulment, whereas grounds under No. 2 – if there are indications – will be addressed by the courts ex officio.

Core principles of German competition law, such as the prohibition of abuse of dominance or anti-competitive agreements, form part of public policy and are hence a ground addressed by the court ex officio. The Federal Court of Justice (27 September 2022, KZB 75/21) opined that if violations of competition law are alleged in the annulment stage, the prohibition of the révision au fond does not apply.

If the procedural rules (eg, institutional rules) chosen by the parties require objections, such as a breach of the right to be heard, to be raised promptly and in writing during the proceedings, failure to do so precludes reliance on that ground at the annulment stage (Section 1027 ZPO).

Applications to set aside an award must be filed within three months of receipt of the award, unless the parties have agreed otherwise (Section 1059(3) ZPO). However, even if this deadline lapses, parties may still raise objections under Article V(1) of the New York Convention during enforcement proceedings.

Finally, a party that unconditionally satisfies an arbitral award forfeits its right to challenge it. Whether a payment is deemed unconditional must be assessed from the creditor’s perspective, taking into account the parties’ communications prior to payment.

Under German arbitration law, the right to seek annulment of an arbitral award cannot be waived entirely or in advance. Parties may only waive specific grounds for setting aside – excluding those listed in Section 1059(2) No. 2 ZPO (public policy and lack of arbitrability) – and only after the award has been rendered.

In set-aside proceedings, the court may not review the merits of an award beyond the ground of violation of ordre public (prohibition of the révision au fond). Its review is limited to the grounds listed in Section 1059(2), which mirror those found in Article V of the New York Convention (see 11.1 Grounds for Appeal).

Germany is a contracting state to the New York Convention and has adopted its provisions without reservation. Specifically, Germany has not entered either the commercial or reciprocity reservations permitted under Article I(3) of the Convention. Pursuant to Section 1061(1) of the Code of Civil Procedure, the recognition and enforcement of foreign arbitral awards in Germany are governed directly by the Convention.

To initiate enforcement proceedings in Germany, the applicant must submit a written application or make a formal declaration at the court registry (Section 1063(4) ZPO). The application must be accompanied by the arbitral award or a certified copy thereof (Section 1064(1) ZPO). Unlike the stricter documentary requirements under Article IV of the New York Convention, German courts apply the more liberal standard permitted by Article VII(1), meaning that a translation, typically of the dispositive part, is submitted in practice, though not strictly required.

German courts may refuse enforcement on any of the grounds listed in Article V of the New York Convention (ie, for invalidity of the arbitration agreement, lack of proper notice or inability to present one’s case, excess of jurisdiction, irregular composition of the arbitral tribunal or procedure, award not yet binding or set aside, subject matter not arbitrable under German law, or recognition or enforcement would be contrary to ordre public).

The Federal Court of Justice (12 January 2023, I ZB 33/22) has given up its previous position and found that Section 110 (1) ZPO providing for security for costs applies to the recognition and enforcement proceedings by analogy.

Additionally, awards rendered in the form of a consent award (ie, awards on agreed terms) in foreign arbitral proceedings are enforceable under Section 1061 ZPO, as confirmed by the Bavarian Superior Court (20 November 2023, 102 Sch 173/23e).

The Federal Court of Justice (9 March 2023, I ZB 33/22) has held that a foreign court’s refusal to annul an award does not preclude German courts from independently assessing enforceability. Where set-aside proceedings are pending at the seat, German courts may suspend enforcement proceedings in accordance with Article VI of the New York Convention. This discretionary power is exercised on a case-by-case basis, taking into account the likelihood of annulment and the interests of procedural efficiency.

Under German law, a state or state entity may only invoke sovereign immunity successfully if the enforcement measure would interfere with sovereign (as opposed to commercial) activity. The burden lies with the state to demonstrate that the act in question qualifies as acta iure imperii.

The Higher Regional Court (Kammergericht) of Berlin (4 June 2012, 20 Sch 10/11) ruled on the sovereign immunity defence in enforcement proceedings and established that states have no general immunity in enforcement proceedings. In particular, the state waives its sovereign immunity when concluding an arbitration agreement to the extent of the agreement.

German courts adopt a pro-enforcement stance towards arbitral awards, both domestic and foreign. In practice, the grounds for refusing recognition and enforcement under Article V of the New York Convention are interpreted narrowly. German courts have frequently declined to find that a defence exists, even in cases where foreign courts have exercised discretion to deny enforcement. In the enforcement context, only violations of international public policy (those that offend Germany’s most fundamental legal principles) will justify refusal. In particular, German courts adopt a strict interpretation of the prohibition of judicial review of the merits of an arbitral award by state courts (révision au fond).

Where a party invokes a defence under Article V(1) of the New York Convention, German courts may still assess whether the same facts give rise to a violation of procedural public policy under Article V(2)(b) of the New York Convention. This is particularly relevant in cases involving the absence of a valid arbitration agreement or a breach of the right to be heard.

Group or class action arbitration is not explicitly regulated under German arbitration law. Arbitration is typically individual, and multiparty arbitration typically requires specific agreement by all parties involved.

Counsel and arbitrators who are registered as lawyers at a German bar association must follow the professional and deontological obligations stipulated inter alia in the Federal Lawyers’ Act (BRAO) and in the Professional Code of Conduct for Lawyers (BORA).

German law does not prohibit third-party funding in arbitration proceedings seated in Germany. However, the involvement of a non-party funder may raise concerns regarding the confidentiality traditionally associated with arbitration. In this context, the legitimate interests of the opposing party must be duly considered. To mitigate the risk of unauthorised disclosure, it is standard practice to require funders to enter into confidentiality agreements, thereby ensuring that sensitive information remains protected throughout the proceedings.

German arbitration law does not contain express statutory provisions governing the consolidation of separate arbitral proceedings. Instead, the issue is typically addressed either through the parties’ arbitration agreement or by reference to the applicable institutional rules.

For instance, Article 10 of the ICC Rules of Arbitration provides a framework for consolidation under specific conditions. Similarly, Section 8.1 of the DIS Arbitration Rules permits the consolidation of two or more arbitrations conducted under the DIS Rules into a single proceeding, provided that all parties to the arbitrations concerned consent to the consolidation upon request.

Under German arbitration law, the binding effect of an arbitration agreement or award is generally confined to the parties that have expressly consented to it, typically the signatories of the agreement and their legal successors. However, there are limited circumstances in which third parties may also be bound.

If the rights and obligations under a contract containing an arbitration clause are validly assigned, the assignee may also be bound by the arbitration agreement. This is based on an analogous application of Section 401 of the German Civil Code, which governs the transfer of claims.

Regarding other third parties, the extension of an arbitration agreement to non-signatories must be assessed on a case-by-case basis, depending on the specific legal grounds for such inclusion. However, the Federal Court of Justice has made it clear that, as a rule, arbitration agreements do not extend beyond the original parties and their legal successors. In particular, the so-called “group of companies doctrine” – which in some jurisdictions allows non-signatory affiliates within a corporate group to be bound – is not recognised under German arbitration law (9 March 2023, I ZB 33/22).

German courts have the ability to bind foreign third parties to the same extent as German parties, to the extent that they are competent to act in arbitration matters pursuant to German arbitration law. However, the execution of these decisions may prove more challenging.