Germany / 27 September 2005 / Germany, Oberlandesgericht Hamm / 29 Sch 01/05
| Country | Germany |
| Court | Germany, Oberlandesgericht Hamm (Higher Regional Court of Hamm) |
| Date | 27 September 2005 |
| Case number | 29 Sch 01/05 |
| Applicable NYC Provisions | VII | V | IV | VII(1) | V(2)(b) | V(1)(a) | IV(2) | IV(1)(a) |
| Source | DIS |
| Languages | English |
| Summary | The parties entered into an agreement which provided that the Applicant, an Iranian citizen, would assist the Respondent, a German company, in resolving certain disputes it had with the Iranian authorities in exchange for a “consulting fee”. The agreement contained the following arbitration clause: “All disputes arising in connection with this Letter of Commitment shall be settled in accordance with the laws of conciliation and arbitration of the Geneva Chamber of Commerce. In case of non-settlement, the dispute will be submitted for a final decision to the arbitrators of the Geneva Court of Justice. The rules of conciliation an arbitration of the said court will be binding for both parties”. Subsequently, the Applicant initiated arbitration proceedings at the Geneva Chamber of Commerce, Industry and Services, Geneva (CCIG), seeking payment of outstanding consulting fees. The Respondent participated in the arbitration proceedings but sought a declaration that there existed no valid arbitration clause, the dismissal of the Applicant’s claims, and that conciliation proceedings be conducted following the constitution of the arbitral tribunal. Conciliation proceedings were conducted with no result and thereafter the arbitral tribunal decided on its jurisdiction in an interim arbitral award. The interim award stated that while the arbitration clause was “pathological”, it was nevertheless valid since the parties’ intent to arbitrate disputes in general, and more specifically to refer disputes to arbitration under the auspices of Geneva’s leading arbitral institution, was clear. The arbitral tribunal awarded part of the Applicant’s claims. The Applicant sought enforcement in Germany, to which the Respondent objected, arguing that the arbitration agreement was not valid because the clause was contradictory, and also that one of the signatories had understood it to be a choice of forum clause. The Respondent further argued that enforcement would be contrary to public policy in Germany because the award was rendered in violation of the Respondent’s right to be heard as the tribunal had failed to hear a witness on the issue of the validity of the arbitration agreement, and moreover, the consulting agreement was illegal because it has been concluded for the purpose of financing the payment of bribes. The Oberlandesgericht (Higher Regional Court) Hamm granted enforcement, finding that the formal conditions for recognition of the award, as set out in Article IV(1)(a) and IV(2) NYC, had been met as the Applicant had provided certified copies and translations of the final and interim awards. It found that it was sufficient that the Applicant had only provided a copy of the arbitration agreement and not the original because, pursuant to the NYC’s more-favorable-right provision in Article VII(1) NYC, the less stringent requirements Section 1064 of the German Civil Procedure Code were applicable instead of those in Article IV(1) NYC. The Oberlandesgericht rejected the Respondent’s argument that the arbitration agreement was invalid (Article V(1)(a) NYC), reasoning that the Respondent had not only agreed to the constitution of the arbitral tribunal, the conciliation proceedings and to the tribunal deciding its jurisdiction in an interim award, but had also subsequently engaged in arguments on the merits without challenging the interim award under Article 190(3) read with 190(2)(b) of the Swiss Federal Act on Private International Law. It held that it would be a contradiction of the principle of fair and good conduct of proceedings if the Respondent were allowed, after such conduct, to question the validity of the arbitration agreement at the enforcement stage. The Oberlandesgericht stated that there was no established case law to the effect that the NYC would bar such a preclusion. It also held that, in any case, the Respondent’s defense regarding the absence of a valid arbitration clause was unfounded. It dismissed the Respondent’s public policy objections under Article V(2)(b) NYC stating that the Respondent itself had failed to call the relevant witness to testify on the issue in question and that the alleged bribery payments to Iranian officials had not been proven by the Respondent. |
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Attachment (1)
 Original Language Adobe Acrobat PDF |
