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Germany / 08 August 2007 / Oberlandesgericht Thüringen / 4 Sch 03/06

Country	Germany
Court	Germany, Oberlandesgericht Thüringen
Date	08 August 2007
Case number	4 Sch 03/06
Applicable NYC Provisions	V | V(1)(b) | V(2)(b)
Source	Original decision obtained from the registry of the Oberlandesgericht Thüringen
Languages	English
Summary	A Japanese company and two German companies entered into agreements allowing the German companies to use certain glass production technologies of the Japanese company and also regulating the three companies’ joint development of certain new technologies. The Japanese company subsequently initiated arbitration proceedings in Zurich, under the rules of the International Chamber of Commerce (“ICC”), alleging that the German companies had made unauthorized use of the Japanese companies’ know-how. The arbitral tribunal issued, inter alia, an interim award which was partly in favour of the Japanese company and partly in favour of the German companies. The German companies sought, unsuccessfully, to annul the interim award before the Schweizer Bundesgericht (Swiss Federal Supreme Court), alleging that the interim award violated public policy. Subsequently, the parties turned to the Oberlandesgericht (Higher Regional Court) Thüringen for the recognition and enforcement of those parts of the interim award which were favourable to each. With respect to the portions favourable to the Japanese company, the German companies opposed enforcement, contending that the relevant portions of the interim award violated public policy since the arbitral tribunal (i) had not considered the German companies’ substantive defences, or had considered them insufficiently at best, and (ii) had not examined, in sufficient detail, the possible violation of Article 81(2) EC in connection with German competition law. The Oberlandesgericht declared the interim award enforceable. It clarified that the interim award was capable of being recognized and enforced since it contained binding determinations on the merits of the dispute and not just decisions on procedural questions which would not be capable of recognition and enforcement. The Oberlandesgericht also rejected the German companies’ objection under Article V(2)(b) NYC. It first noted that under the NYC foreign arbitral awards could generally not be reviewed on the merits, and that potential errors in a foreign arbitral award were generally to be accepted, as was the case in relation to errors in a foreign court judgment. According to the Oberlandesgericht, recognition and enforcement proceedings were only meant to prevent misapplication of arbitrators’ powers, and not to relegate arbitral tribunals to mere preliminary decision-makers. If a state allowed arbitration proceedings, it must also be willing to accept, short of a violation of public policy, arbitration awards which might violate mandatory law. The Oberlandesgericht clarified that not all provisions of mandatory law constituted public policy, rather, public policy comprised only those provisions of mandatory law which affected the foundations of public and economic life and basic ideas of justice, including basic rights under the German Constitution, good morals, all fundamental principles of German law, and basic guarantees of procedural justice, such as the right to be heard. The Oberlandesgericht found that the German companies had been accorded the right to be heard to a sufficient degree, as stated by the Schweizer Bundesgericht in its decision denying annulment. The Oberlandesgericht found that it could use the finding of the Schweizer Bundesgericht on on this issue since the scope and content of the right to be heard were identical under Swiss and German law. The Oberlandesgericht further stated that the Schweizer Bundesgericht’s conclusions were generally binding on the Oberlandesgericht and that it was not the function of the Oberlandesgericht to thwart them as long as they were not obviously false or deficient. Moreover, the Oberlandesgericht stated that the German companies’ allegations of a violation of EU competition law did not fall under public policy within the meaning of Article V NYC. It agreed with the arbitral tribunal that the license agreement between the parties did not fall within the ambit of EU competition law and did not, moreover, limit competition. The Oberlandesgericht finally noted that the arbitral tribunal’s findings in this respect were to be accepted and were not subject to a comprehensive review in light of the prohibition of a review on the merits.
see also :	I / 2. ANALYSIS (I) / ARTICLE I(1) / c. Interim or partial awards / §34
Link to the record	https://newyorkconvention1958.org/index.php?lvl=notice_display&id=1311&opac_view=6

Attachment (1)

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Germany / 08 November 2004 / Oberlandesgericht Thüringen / 4 Sch 4/03

Country	Germany
Court	Germany, Oberlandesgericht Thüringen
Date	08 November 2004
Case number	4 Sch 4/03
Applicable NYC Provisions	V | IV
Source	Original decision obtained from the registry of the Oberlandesgericht Thüringen
Languages	English
Summary	The parties entered into a contract containing a clause providing for arbitration before one or more arbitrators appointed either under the rules of the Vilnius Court of Commercial Arbitration or the UNCITRAL Arbitration Rules. A dispute arose and the Seller initiated arbitration before the Vilnius Court of Commercial Arbitration, obtaining a favorable award, which it sought to enforce in Germany. The Respondent opposed its enforcement arguing, in particular, that it had not been granted the right to be heard and that the award violated German public policy because it had been obtained by fraud. The Oberlandesgericht (Higher Regional Court) Thüringen declared the award enforceable, holding that the Seller’s application met the formal requirements of Article III NYC and that there were no grounds to refuse enforcement under Article V NYC. It held that the Respondent had been granted the right to be heard as it had been informed of the arbitral proceedings and the oral hearing in a timely manner. It found that the relevant notices had been delivered to a person whom the Applicant could rightly have assumed to be the Respondent’s representative, as that person had previously held such a role and the Respondent had failed to correct such impression. It thus considered that the Respondent had properly been notified. Moreover, the Oberlandesgericht found that the Respondent had made statements in the arbitration and that the Respondent’s arguments were also discussed in the award. The Oberlandesgericht also dismissed the Respondent’s argument that the enforcement of the award violated German public policy, stating that although an arbitral award that was obtained fraudulently violated German public policy, a high standard applied to such allegations, which were admissible at the enforcement stage only to the extent the Respondent had not defended itself in the arbitral proceedings, since court review of a foreign arbitral decision was limited. The Oberlandesgericht noted that, while the Respondent had participated in the arbitration, it had raised allegations of fraud only in the present enforcement proceedings, which the Oberlandesgericht found to be belated. It thus considered Respondent’s fraud allegations to be precluded and additionally held that the allegations had also not been sufficiently substantiated and proven.
Link to the record	https://newyorkconvention1958.org/index.php?lvl=notice_display&id=1327&opac_view=6

Attachment (1)

Original Language Adobe Acrobat PDF