Germany / 14 April 1988 / Bundesgerichtshof / III ZR 12/87
| Country | Germany |
| Court | Germany, Bundesgerichtshof (Federal Court of Justice) |
| Date | 14 April 1988 |
| Case number | III ZR 12/87 |
| Applicable NYC Provisions | V | I | V(2)(b) | V(1)(e) | V(1)(d) | V(1)(b) | I(1) |
| Source | Original decision obtained from the registry of the Bundesgerichtshof |
| Languages | English |
| Summary | The prevailing party in an International Chamber of Commerce (ICC) arbitration seated in Belgium sought enforcement of the award in Germany. The Landgericht (Regional Court) Stuttgart declared the award enforceable, but its decision was reversed by the Oberlandesgericht (Higher Regional Court) Stuttgart on appeal. The decision of the Oberlandesgericht was appealed before the Bundesgerichtshof (Federal Supreme Court). The Bundesgerichtshof reversed the Oberlandesgericht’s decision and reinstated the decision of the Landgericht, which had declared the award enforceable. It found that the NYC was applicable since the award had been rendered within the territory of another contracting state as per Article I(1) NYC. The Bundesgerichtshof held that the formal prerequisites set forth by Article IV NYC had been met and there were no grounds to refuse enforcement of the award under Article V NYC. First, it held that the award had become binding within the meaning of Article V(1)(e) NYC since it was not subject to appeal before a higher arbitral tribunal or a state court . Second, although the tribunal had exceeded the time limit for rendering its award under the ICC Rules, according to the Bundesgerichtshof, this would not constitute grounds for non-enforcement under Article V(1)(d) NYC. In this respect, it noted that under the ICC Rules an arbitral tribunal does not become functus officio unless it is substituted by a different tribunal, even if it fails to render its award within the prescribed time limit; thus, the extension of the time limit for rendering the award had nothing to do with the “composition of the arbitral authority.” Third, it ruled that not giving a party the opportunity to comment on the extension of the time limit for the issuance of the award did not constitute a ground for refusing enforcement under Article V(1)(b) NYC, recalling that this provision merely required that the parties be informed of the constitution of the arbitral tribunal and the existence of arbitral proceedings. The Bundesgerichtshof also dismissed the argument that the enforcement of the award would violate German public policy pursuant to Article V(2)(b) NYC, since the unsuccessful party had failed to make use of the possibility to comment on the extension of the time limit, thus the ICC Court’s failure to explicitly ask for the parties’ comments regarding the extension of the time limit for rendering of the arbitral award did not constitute a violation of German public policy. |
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Attachment (1)
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