Arbitration

Arbitration is a private arbitration process to resolve a legal dispute.

In arbitration, the parties to a legal dispute agree to conduct the dispute before a private arbitration tribunal, in which one or more private arbitrators make an award that is binding on both parties. Regulations for national arbitration proceedings can be found in Sections 1025 ff. ZPO. An agreement on arbitration requires a simplified written form, cf. § 1028? ZPO. If there is an effective agreement on arbitration, the state courts generally have no jurisdiction, see Section 1032 ZPO.

In arbitration, the parties have access to a number of permanent arbitration courts or arbitration institutions (e.g. at the Chambers of Commerce and Industry), but they can also organize the arbitration proceedings completely themselves (ad hoc arbitration tribunal).

Arbitration is often chosen by merchants in order to take into account the interest of a quick legal settlement and to avoid lengthy state court proceedings. In practice, international arbitration is particularly important, which is primarily due to the better and faster enforceability of arbitration awards at the international level. International arbitration is based on the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958.