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Evolution of German Arbitration: The Code of Civil Procedure Overhaul and the Influence of UNCITRAL Model Law

Evolution of German Arbitration: The Code of Civil Procedure Overhaul and the Influence of UNCITRAL Model Law

The Tenth Book of the Code of Civil Procedure was completely replaced with a new text based on the UNCITRAL Model Law on International Commercial Arbitration in 1998, marking a significant shift in Germany's arbitration laws. Due to its extensive usage in business and industry, Germany, a nation with a long history of arbitration, must make this adjustment. The competition between arbitration and judicial procedures available worldwide—will be the main topic of discussion. The emphasis will be on alternative dispute resolution (ADR), which includes conciliation and arbitration. The German jurisdiction is renowned for being arbitration-friendly.[1]

Ad-hoc arbitration, which is created by the parties or arbitrators, and institutionalized arbitration, which is offered by private organizations, are the two primary forms of arbitration. German arbitration is distinguished by its conduct, quality, and adaptability. The parties may designate a mediator from the industry that gave rise to the disagreement, sometimes referred to as a "commercial man," who may provide procedural guidelines based on their business acumen or administer the regulations of specialized arbitration organizations. Arbitrators frequently call the parties in for a first conference when a thorough schedule is reviewed and decided upon. Governments may use the UNCITRAL Model Law on Arbitration, adopted by the UN in 1985, as a reference when enacting new laws or amending existing ones dealing with international commercial arbitration.[2]

Scotland has adopted the Model Law, the Russian Federation, Bulgaria, and Cyprus as a model for modern arbitration rules in Europe. Following its unification, Germany had a boom in commercial and financial activities and became the entry point to Eastern Europe. This development ushered in a new era for international arbitration in the nation with the founding of the German Arbitration Institution (DIS) in 1992. Even if the title still seems strange, it is now more accurate and consistent, indicating that the legislation has had a significant impact. Due to Austrian courts' longstanding citation of German philosophy and jurisprudence, Germany's contributions to arbitration law are particularly noteworthy. The working group producing the first draft of the Austrian statute took into account the experiences Germany had with its recently overhauled arbitration system. However, there are a few issues that might limit the parties' options in Austrian arbitration.[3]

Terms of reference, discovery, and the presentation of an excessive number of evidence sources are a few examples of problematic aspects. In written submissions, parties are used to mentioning the supporting documentation in Germany. The tribunal will next issue a written order (Überraschungseffekt) specifying which of these measures are important for deciding the case. The arbitrator facilitates the conversation, asks probing questions, and points the parties toward certain factual points. This upholds the inquisitorial system, even when other countries prefer the adversarial method.[4] An award cannot select a topic that was not previously considered or based on the "Überraschungseffekt." Because German arbitrators form their judgments on the case, it is also easier for them to base their decisions on relevant facts and legal factors. Austrian arbitration may be carried out more successfully and impartially thanks to this tactic.

References 

[1] Simms, Daniel Paul. "Arbitrability of intellectual property disputes in Germany." Arbitration International 15.2 (1999): 193-197.

[2] Semler, Franz-Jörg. "German Arbitration Law The 1998 Reform and Recent Case Law." Journal of International Arbitration 18.5 (2001).

[3] Trappe, Johannes. "Arbitration in Germany–some aspects and comparison of law." SchiedsVZ, S 3 (2013).

[4] Böckstiegel, Karl-Heinz. "An introduction to the new German arbitration act based on the UNCITRAL model law." Arbitration International 14.1 (1998): 19-32.

  • Germany's Tenth Book overhaul to UNCITRAL Model Law signifies a major legal shift, prioritizing modern arbitration needs.
  • With a historical leadership role since 1877, Germany maintains its arbitration prowess by incorporating UNCITRAL Model Law principles.
  • German arbitration influences Austria via the UNCITRAL Model Law, yet challenges in Austrian law pose flexibility constraints.

BY : Vaishnavi Rastogi

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