An Introduction to the New German Arbitration Act Based on the UNCITRAL Model Law

Abstract

A FUNDAMENTAL and radical change of the arbitration law in Germany is taking place in 1998. The Tenth Book of the Code of Civil Procedure (ZPO) which has contained the German arbitration law since the coming into force of the ZPO as long ago as 1879, is being fully replaced by a new text based on the UNCITRAL Model Law on International Commercial Arbitration. Thus, after the institutional framework for national and international arbitration in Germany has been newly shaped in 1992 by the concentration of the former institutions at the Federal level within the German Institution of Arbitration ( Deutsche Institution fur Schiedsgerichtsbarkeit, DIS),1 the legal framework for national and international arbitration in Germany is now modernized into an internationally co-ordinated form. This is of high relevance and practical importance in a country which has a long tradition of arbitration and where today arbitration is used widely in the practice of industry and commerce in their business relations and contracts both to other German enterprises as well as to private and public enterprises in foreign states. Germany being one of the major participants in international commerce and investment, this preference of German enterprises for arbitration specifically in their international business relations and contracts has led to thousands of arbitration agreements and clauses being concluded by German enterprises every year. But this has not led to a great number of international arbitration proceedings in Germany itself. The usual practice in international business relations being that the place of arbitration is chosen not to be in the home state of either party, these arbitrations involving German enterprises led normally to places of arbitration outside Germany. On the other hand, in spite of the long arbitration tradition and the preference for arbitration in Germany, foreign enterprises did not develop a preference for …