Author: Andreas Respondek*
Published: December 2014
Despite the fact that Germany only has some 80 million inhabitants, the size of German exports ranks third worldwide after China and the U.S., countries with much larger populations. Germany’s great focus on exports makes the country automatically closely intertwined with the world economy. As a consequence of the size of German exports and the multitude of economic international relationships of German companies, inevitably commercial disputes are bound to come up. It comes therefore as no surprise that German parties form a large percentage of claimants or respondents in international arbitration proceedings.
While many international contracts to which German corporations are a party stipulate international arbitral institutions outside Germany like the International Chamber of Commerce (“ICC”), London Court of International Arbitration (“LCIA”), and Singapore International Arbitration Centre (“SIAC”) as arbitral institutions, there is a noticeable increase in arbitration clauses that stipulate Germany as the venue.
International parties are discovering Germany as a suitable place for arbitration. As this summary will try to show, Germany compares favorably with its international competitors and there are good reasons for considering Germany as a venue for international arbitrations.
II. GERMANY’S LONG ARBITRATION HISTORY
For 130 years, Germany has taken a favorable approach to arbitration. Arbitration was codified in Germany for the first time in 1877 in the 10th Book of the Zivilprozessordnung (“ZPO”) (Code of Civil Procedure). The guiding principles of this early codification were the respect for far-reaching party autonomy and a minimum of judicial intervention.
While these principles are widely recognized today, at the time when the first German arbitration law entered into force, this favorable attitude toward arbitration was in stark contrast to the skepticism with which arbitration was treated in other legal systems.
**Attorney at Law, Respondek & Fan PTE LtD; Chartered arbitration (FCIArb).