Germany / 31 January 2007 / Oberlandesgericht Dresden / 11 Sch 18/05
| Country | Germany |
| Court | Germany, Oberlandesgericht Dresden (Higher Regional Court of Dresden) |
| Date | 31 January 2007 |
| Case number | 11 Sch 18/05 |
| Applicable NYC Provisions | V | V(1)(e) |
| Source | Original decision obtained from the registry of the Oberlandesgericht Dresden |
| Languages | English |
| Summary | The Applicant, a U.S. company, entered into a sales contract with a manufacturer of tractors owned by the Belarusian state. The contract provided for arbitration at the Belarusian Chamber of Commerce and Industry in Minsk. A dispute arose and the Applicant initiated arbitration proceedings. An award was rendered in favor of the Applicant, which was set aside by the Supreme Commercial Court of Belarus upon application by the Belarusian company. The Applicant sought enforcement of the award before the Oberlandesgericht (Higher Regional Court) Dresden against the Respondent, a German subsidiary of the Belarusian company. The Respondent opposed enforcement, arguing that, inter alia, the award had been set aside in Belarus and moreover, that it had only been signed by two of the three arbitrators. The Applicant contended that the annulment decision by the Supreme Commercial Court of Belarus should not be recognized because Belarus was a dictatorship and the Supreme Commercial Court had acted to protect the financial interests of the head of state rather than the legal order. The Applicant further submitted that the enforcement of the award was subject to the European Convention on International Commercial Arbitration of 1961 (the “ECICA”), Article 9 of which provided that the annulment of an award would only constitute a ground for refusal of enforcement in a contracting state if arbitration agreement was invalid or if the arbitration proceedings were not in accordance with the agreed arbitration rules. The Applicant argued that neither of these conditions had been met. The Applicant stated that the ECICA was applicable even though only Belarus, but not the United States, was a party to the ECICA. It reasoned that the trade agreement signed between Belarus and the United States provided that each contracting party was to treat the other contracting party no less favorably than any other state with which the contracting party had entered into a treaty. The Oberlandesgericht refused to declare the award enforceable. It held that the enforceability of the award was subject to Section 1061 of the German Civil Procedure Code in conjunction with the NYC and the ECICA. The Oberlandesgericht found that the application of the ECICA was not hindered by the fact that the United States and Belarus were both parties to the NYC. It further noted that Article 9 ECICA limited the application of Article V(1)(e) NYC to only those cases of setting aside which were enumerated in Article 9 ECICA. The Oberlandesgericht found that the ECICA was applicable on the basis of the most favorable treatment principle contained in the trade agreement between the United States and Belarus. The Oberlandesgericht noted that, as compared to the NYC, the ECICA accords a greater degree of deference to the autonomy of economic agents who submit their disputes to arbitration. It noted that this promoted the free exchange of goods, which was an objective of the most favored nation principle. Finally, the Oberlandesgericht found that the annulment of the award in Belarus was in compliance with the annulment grounds under the ECICA and the annulment decision therefore had to be accepted. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
