Germany / 23 February 2006 / Germany, Bundesgerichtshof / III ZB 50/05
| Country | Germany |
| Court | Germany, Bundesgerichtshof (Federal Court of Justice) |
| Date | 23 February 2006 |
| Case number | III ZB 50/05 |
| Applicable NYC Provisions | VII | V | VII(1) | V(2)(b) |
| Source | BGH |
| Languages | English |
| Summary | The Parties concluded a contract for the delivery of wood that provided for arbitration pursuant to the Arbitration Rules of the Belorussian Chamber of Industry and Commerce in Minsk. The Defendant did not participate in the proceeding since it considered the arbitration clause to be invalid. The Oberlandesgericht (Higher Regional Court) Karlsruhe rejected the application to declare the award enforceable on the ground of violation of public policy, arguing that the award did not comply with a provision of the Belorussian Arbitration Law providing that in the event of a challenge to its jurisdiction, the arbitral tribunal must rule on its competence in a preliminary award. The Claimant thereafter sought to set aside the decision of the Oberlandesgericht Karlsruhe by a complaint on points of law to the Bundesgerichtshof (Federal Supreme Court). The Bundesgerichtshof held that the Oberlandesgericht Karlsruhe was mistaken in ruling that the award violated public policy. Pursuant to Article VII(1) NYC and the (more favourable) provisions of the German-Soviet Treaty on General Issues of Trade and Maritime Transport of 1958, which was held to apply to Germany's relations with Belorussia, grounds for non-enforcement were more limited than under the NYC, since the Treaty presupposes a violation of international public policy. The Bundesgerichtshof held that the tribunal did not violate international public policy since neither the UNCITRAL Model Law nor the German law required an tribunal to always rule by separate and preliminary award. Because the Parties were not prevented from having the award reviewed by the state courts, their fundamental rights had not been infringed. The Bundesgerichtshof held that the declaration of enforceability could not have been denied on that ground. Yet, it could have been denied on the basis of the absence of a valid arbitration agreement. Since the Oberlandesgericht Karlsruhe did not determine this issue, the matter was referred back to it. |
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Attachment (1)
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