Germany / 20 November 2003 / Germany, Bayerisches Oberstes Landesgericht (Bavarian Highest Regional Court) / 4 Z Sch 17/03
| Country | Germany |
| Court | Germany, Bayerisches Oberstes Landesgericht (Bavarian Highest Regional Court) |
| Date | 20 November 2003 |
| Case number | 4 Z Sch 17/03 |
| Applicable NYC Provisions | V | V(2)(b) |
| Source |
DIS |
| Summary | The Parties concluded a supply contract providing for the arbitration of disputes at the Court of International Commercial Arbitration at the Chamber of Commerce and Industry of the Russian Federation (ICAC). The Claimant commenced arbitration and at arbitral tribunal's suggestion, the Parties entered into settlement negotiations and agreed that the Claimant would withdraw proceedings if the Defendant paid the amounts in dispute. The Defendant duly paid the amounts, but the Claimant did not terminate the proceedings (concealing the Parties' settlement) and obtained a favorable award. The Claimant then sought enforcement in Germany. The Bayerisches Oberstes Landesgericht (Bavarian Supreme Court) denied enforcement pursuant to Article V(2)(b) NYC. It reasoned that even under the less stringent requirements of international public policy, the concealment of a settlement agreement constitutes a gross violation of the basic principles of German law. The jurisprudence of the Federal Supreme Court holding that a party is estopped from raising objections against the award that should have been raised in the course of the arbitration does not apply to public policy objections under Article V(2)(b) NYC. The violation in this case went beyond a mere procedural defect. The Court reasoned that if the award were enforced, the principle of contractual good faith would be violated in a manner that is inconsistent with the German legal system. |
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Attachment (1)
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