Germany / 10 August 2006 / Germany, Kammergericht / 20 Sch 07/04
| Country | Germany |
| Court | Germany, Kammergericht |
| Date | 10 August 2006 |
| Case number | 20 Sch 07/04 |
| Applicable NYC Provisions | VII | V | IV | III | V(1)(e) | V(2)(a) | VII(1) | V(1)(a) | IV(2) | IV(1)(b) |
| Source |
Original decision obtained from the registry of the Kammergericht |
| Languages | English |
| Summary | In relation to a joint venture contract for the exploration of Lithuanian oil fields, a tribunal constituted under the Rules of the International Chamber of Commerce (“ICC”), seated in Copenhagen, ordered the Respondents, a foreign state and a company incorporated under the laws of that state, to pay damages to the Applicant as joint and several debtors. The foreign state issued a resolution stating that it did not consider it appropriate to seek annulment of the award at the seat of the arbitration. The Applicant applied for enforcement of the award in Germany. The foreign state opposed enforcement before the Kammergericht (Higher Regional Court Berlin) arguing that (i) it was not a party to the arbitration agreement, (ii) the arbitration agreement did not encompass disputes regarding the oil fields, (iii) this was a dispute about natural resources which were in the public law domain and thus not susceptible to arbitration, and (iv) that it had not been fully granted the right to be heard. The foreign state further argued that its resolution did not constitute a waiver of the right to seek an annulment of the award and that the time limit for seeking annulment had not yet passed. In addition, it sought that the arbitral tribunal’s factual findings be fully reassessed by the Kammergericht. The Respondent company opposed enforcement of the award, stating that (i) the Applicant had not fulfilled the formal requirements for enforcement as it had not submitted a notarized translation of the arbitration agreement, (ii) that the application for enforcement would constitute an abuse of law as the Applicant was not willing to comply with the award issued for the counter claims raised by the Respondent company, and (iii) that the recognition and enforcement of the award would be contrary to German public policy. It further argued that it did not have any attachable assets in Germany due to which the Kammergericht did not have jurisdiction over it. The Kammergericht declared the award enforceable against the Respondent state but not the company. It found that the application met the formal requirements for a declaration of enforceability and that pursuant to Section 1064 paras 1 and 3 of the German Civil Procedure Code the Applicant need only provide a certified copy of the arbitral award. It held that while Articles IV(1)(b) and IV(2) NYC required submission of the original arbitration agreement or a certified copy, and a certified translation of the award, under the more-favorable-right provision at Article VII(1) NYC, the less stringent requirements of German law would be applicable. The Kammergericht noted that this interpretation was also in line with Article III NYC according to which the recognition of foreign awards could not be subject to substantially more onerous conditions than the recognition of domestic awards. On the merits, the Kammergericht concluded that the Respondent state was precluded from raising objections since it had previously, by way of its resolution, abstained from seeking annulment of the award at the arbitral seat, even though the award could only be set aside at the seat. According to the Kammergericht, for the Respondent state to object to enforcement now was in contradiction to its previous stance and against good faith. With respect to the Respondent company, the Kammergericht refused to declare the award enforceable, finding that the application was inadmissible since the company did not own assets in Germany. The Kammergericht concluded that its finding of inadmissibility was not barred under the NYC as it did not involve a decision on the merits of the dispute and the NYC did not address general admissibility requirements in addition to the specific requirements stipulated in the NYC. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
