History and structure of the DIS
The German Institution for Arbitration (DIS) is the most important organisation for arbitration in Germany. It was established on 1 January 1992 as a result of the merger of the German Arbitration Committee and the German Arbitration Institute. The DIS is closely linked to the German Association of Chambers of Industry and Commerce and the German Chambers of Industry and Commerce, which are members of the DIS and refer to the DIS Arbitration Rules as the basis for their arbitration proceedings in general.
The primary goal of the DIS is to promote arbitration and, in a wider sense, alternative dispute resolution (ADR) as well as to support all arbitration-related matters across Germany. Therefore, the DIS offers arbitration as well as mediation and conciliation rules and rules for conflict management, adjudication and expert opinion, administrates and facilitates arbitration as well as mediation and conciliation proceedings, offers arbitration-related services, organises conferences, seminars and other events related to arbitration (eg, the Petersberger Schiedstage or the Karl-Heinz Böckstiegel lectures) annually, and supports the publication of literature, court decisions and articles referring to arbitration or ADR, or both.
The DIS is a registered association with its seat in Berlin. Its main secretariat is located in Cologne. The management of the association, in particular the administration of arbitral proceedings, is conducted by the executive committee, headed by its secretary general, Dr Francesca Mazza.
The DIS is also governed by a board of directors, consisting of 19 members. An advisory board, consisting of 21 members assists the board of directors.
The DIS has approximately 1,100 members from Germany and abroad. A frequently updated list of all members is available online (see www.dis-arb.de). The membership-related benefits include free and unrestricted access to the full text version of the online database on arbitration-related German court decisions, an online directory of all members with an opportunity for the members to include their curriculum vitae and subscription of the German Arbitration Journal.
In 2015, 134 new arbitration cases were administered by the DIS. In previous years, on average, 130 cases per year were filed under the DIS Arbitration Rules and processed as well as managed by the DIS. The amount in dispute ranged from €30 to €2 billion. According to statistics, about 15 per cent of the cases end before the arbitral tribunal has been appointed, about 55 to 60 per cent of the remaining cases result in a settlement and 40 to 45 per cent end with a final award. In 2015, 28.8 per cent of the arbitration cases included foreign parties from, for example, China, Europe, India, Israel, Russia, Ukraine and the United States.
The DIS Arbitration Rules and Supplementary Rules
The DIS Arbitration Rules in effect were adopted on 1 July 1998. The appendix to section 40.5 DIS Arbitration Rules (Schedule of Costs) was revised with effect to 1 January 2005. The DIS Arbitration Rules are available on the DIS website (www.dis-arb.de) in English, German, French, Russian, Spanish, Turkish, Arabic and Chinese.
Referring to its section 1.1, the DIS Arbitration Rules apply to all disputes that, pursuant to an agreement concluded between the parties, are to be decided by an arbitral tribunal ‘in accordance with the Arbitration Rules of the German Institution of Arbitration (DIS)’.
The DIS Arbitration Rules do not provide for a compulsory prima facie review of the validity of the arbitration agreement that must be submitted when filing a statement of claim according to section 6.2 DIS Arbitration Rules. Therefore, even if the reference to the applicability of the DIS Arbitration Rules is ambiguous or non-existent, the DIS will not refuse to administer the proceedings. It will, however, draw the claimant’s attention to possible problems in respect of the validity or scope of the arbitration agreement. If the respondent objects to the competence of the arbitral tribunal, the decision on the validity of the arbitration clause remains with the arbitral tribunal.
In addition, the DIS provides supplementary rules for expedited proceedings (DIS-SREP), which were adopted in April 2008 and are available in German, English, French and Russian. The DIS Arbitration Rules remain applicable to proceedings conducted under the DIS-SREP to the extent that these rules do not contain more specific provisions. The duration of DIS-SREP proceedings should be no longer than six months (in the case of a sole arbitrator) or nine months (in the case of a three-member tribunal) after the filing of the statement of claim.
Further, the DIS Rules for Sports-related Arbitration were adopted on 1 January 2008 (see: www.dis-sportschiedsgericht.de). Similarly, the DIS founded together with the German National Anti Doping Agency the German Court of Arbitration for Sport according to the requirements of the UNESCO Anti Doping Convention. In all doping-related disputes, appeal to the International Court of Arbitration for Sport (CAS) is possible. Sport-related arbitration proceedings administered by the DIS are increasing: there were seven proceedings in 2014 and 16 proceedings in 2015.
In 2009, the DIS transferred the strict guidelines as decided by the German Federal Court of Justice for shareholder resolution disputes into practice by the adoption of the DIS Supplementary Rules for Corporate Law Disputes (DIS-SRCoLD), available in German and English. The Federal Court of Justice decided on 29 March 1996 (case No. II ZR 124/95) and 6 April 2009 (case No. II ZR 255/08) that shareholder resolutions passed by the shareholders’ meeting may also be submitted to arbitration. However, strict requirements apply: basically it must be ensured that the arbitral proceeding offers the same legal protection as a state court proceeding. The DIS-SRCoLD, which also supplements the DIS Arbitration Rules, entered into force on 15 September 2009.
The DIS-SRCoLD are especially suitable for limited liability companies under German law. They are, generally, also applicable for partnerships. However, arbitration agreements included in the statutes of a stock corporation listed on the stock exchange are considered inadmissible because of the mandatory requirements applicable to the statutes of a stock corporation. Whether this also applies for a ‘small’ stock corporation with a limited number of shareholders, and which is not listed on the stock exchange, has not yet been decided.
General characteristics of DIS arbitration proceedings
The arbitration procedure offered by the DIS Arbitration Rules is very flexible, combining a high degree of party autonomy with full independence of the arbitral tribunal in the conduct of the proceedings.
Commencement of proceedings
The statement of claim must be filed with a DIS secretariat. Apart from the main DIS secretariat in Cologne, DIS also has secretariats in Berlin and Munich. Proceedings commence when the statement of claim is received by the DIS (section 6.1 DIS Arbitration Rules). According to section 6.2 DIS Arbitration Rules, the statement of claim must contain an identification of the parties, a specification of the relief sought, particulars regarding the facts and circumstances that give rise to the claims, a reproduction of the arbitration agreement and a nomination of the arbitrator (unless the parties have agreed on a decision by a sole arbitrator). It is, however, under the DIS Arbitration Rules, generally not expected that the statement of claim already contains all details regarding the facts and circumstances that are relevant to the claims, including the offer for evidence. The facultative content of a statement of claim is listed in section 6.3 DIS Arbitration Rules, and includes:
- the amount in dispute;
- the proposal for the nomination of an arbitrator (where the parties have agreed on a decision by a sole arbitrator);
- details regarding the place of arbitration;
- the language of the arbitral proceeding; and
- the rules applicable to the substance of the dispute.
Upon filing the statement of claim, the claimant has to pay the DIS administrative fee as well as a provisional advance on the costs of the arbitrators (section 7.1 DIS Arbitration Rules). The statement of claim is delivered to the respondent by DIS (section 8 DIS Arbitration Rules).
Unless otherwise agreed by the parties, the arbitral tribunal consists of three arbitrators (section 3 DIS Arbitration Rules). Its wording is similar to section 1034(1) of the German Code of Civil Procedure. Considering the advantages and disadvantages of choosing an arbitral tribunal with three arbitrators (eg, expertise in different areas, higher quality of arbitration, but also higher costs) on the one hand, and choosing a sole arbitrator on the other hand, the DIS decided reasonably and like the UNCITRAL Model Law that, as a general rule and in the absence of a respective agreement between the parties, an arbitral tribunal according to the DIS Arbitration Rules consists of three arbitrators.
In the case of a three-member panel, each party nominates one arbitrator and these two arbitrators jointly nominate the chairman of the arbitral tribunal (section 12.2 DIS Arbitration Rules). If the parties have agreed that the tribunal shall consist of one arbitrator, the parties jointly nominate the sole arbitrator (section 14 DIS Arbitration Rules). The time limit for the nomination of a sole arbitrator, for the nomination of the respondent’s arbitrator and for the nomination of the chairman is likewise 30 days and may be extended upon application.
If the nominating procedure fails, nomination of a substitute arbitrator by the Appointing Committee of the DIS can be requested by a party. The Appointing Committee of the DIS consists of three members and three alternate members who are appointed by the DIS board of directors for a period of two years. Decisions are taken by the three regular members of the Appointing Committee. The Appointing Committee nominates arbitrators upon proposal of the Executive Committee. If the Appointing Committee adopts the proposal of the Executive Committee by at least a majority of the votes, the proposed person is confirmed as arbitrator pursuant to section 17.2 DIS Arbitration Rules. The DIS Appointing Committee is rarely called upon to nominate an arbitrator (only in about 10 per cent of all cases). Most often the DIS Appointing Committee has to nominate a sole arbitrator or a chairman of the arbitral tribunal.
The persons are selected on the basis of the circumstances of each individual case, having regard to its legal and factual specifics and the requirements for the arbitrator resulting therefrom. For the selection of arbitrators, the DIS maintains a strictly confidential database of information on the professional know-how as well as previous experience as arbitrator or counsel in arbitration of persons interested to act as arbitrators in DIS proceedings. The database is not limited to DIS members.
Arbitrators, upon being nominated, are required to submit a written declaration (section 16.1 DIS Arbitration Rules) regarding their acceptance and their impartiality and independence as well as regarding the compliance with any agreed qualifications. According to section 15 DIS Arbitration Rules, the concepts of ‘impartiality’ and ‘independence’ are formulated broadly in order to cover all possible circumstances, which might justify challenge from a party of the arbitration. An arbitrator may only be confirmed in office after having submitted such declaration. If the declaration does not reveal grounds, which may give rise to doubts as to an arbitrator’s impartiality or independence, the DIS Secretariat confirms the arbitrator in office upon receipt of the declaration (section 17.1 DIS Arbitration Rules). As soon as all three arbitrators or the sole arbitrator are confirmed in office, the arbitral tribunal has been constituted.
Challenge of arbitrators
An arbitrator may be challenged if circumstances exist that give rise to justifiable doubts as to his or her impartiality or independence, or if he or she does not possess qualifications agreed to by the parties (section 18.1 DIS Arbitration Rules). A party may challenge an arbitrator nominated by him or her, or in whose nomination he or she has participated, only for reasons of which he or she becomes aware after the nomination has been made. The challenge shall be notified and substantiated to the DIS Secretariat within two weeks of being advised of the constitution of the arbitral tribunal or of the time at which the party learns of the reason for challenge (section 18.2 DIS Arbitration Rules). The limitation of grounds to challenge an arbitrator according to the DIS Arbitration Rules reflects the high degree of autonomy that parties have in selecting their arbitrators. Once a nomination of an arbitrator is made, he or she cannot be withdrawn at will. Only grounds of which the party was not aware at the time of nominating the arbitrator can be raised in challenge proceedings by that party.
Conduct of proceedings
After its constitution, the arbitral tribunal sets a time limit for the respondent to file the statement of defence (section 9 DIS Arbitration Rules). This implies that the DIS Arbitration Rules do not provide for a fixed time limit for the filing of the statement of defence and instead give the arbitral tribunal the discretion to determine an appropriate period. The arbitral tribunal has to take into account the date on which the respondent received the statement of claim. In addition, the arbitral tribunal has to consider the complexity of the case and the volume of the file at the time when the decision is made.
Two core principles of arbitration are fixed in section 26.1 DIS Arbitration Rules: equal treatment of the parties and the right to be heard. Both principles are mandatory statutory law under the German Arbitration Law. DIS arbitral tribunals are aware of these principles and generally very sensitive if the ‘right to be heard’ principle could become relevant. They will try to avoid even the slightest risk that the award may later be challenged on that ground.
Additionally, the arbitral tribunal shall establish the facts underlying the dispute (section 27.1 DIS Arbitration Rules). It has the discretion to give directions and to hear witnesses or experts as well as to order the production of documents. The DIS Arbitration Rules are guided by the notion of an arbitrator as an active and investigative case manager and not the one of a passive judge who only listens to the parties.
Costs of proceedings
The DIS administrative fee and the fees of arbitrators are calculated by reference to the amount in dispute for greater transparency and predictability (Schedule of Costs, Appendix to section 40.5 DIS Arbitration Rules). With effect of January 2005, the DIS has also issued guidelines for the reimbursement of the expenses of arbitrators. Further, the DIS website provides the possibility to calculate the prospective costs of filing a claim with the DIS as well as the costs of the entire proceeding. This service should support parties and arbitrators without constituting a binding calculation of the costs.
Interim measures of protection
Through section 20 DIS Arbitration Rules it is confirmed that arbitral tribunals have – unless otherwise agreed by the parties – the authority to order any interim measures of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute. The arbitral tribunal may require any party to provide appropriate security in connection with such measure. The measures to be ordered by the arbitral tribunal include, in particular, interim injunctions and arrests in rem. Regarding the proceeding, the arbitral tribunal has to comply with section 24.1 DIS Arbitration Rules (ie, it must apply the mandatory laws at the place of arbitration, the DIS Arbitration Rules and the additional rules agreed between the parties).
Place and language of arbitration, applicable law
Provided that the parties did not agree on the place of arbitration, it shall be determined by the arbitral tribunal according to section 21.1 DIS Arbitration Rules. According to section 21.2 DIS Arbitration Rules, the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for an oral hearing, for hearing witnesses, experts or the parties, for consultation among its members or for inspection of property or documents. The DIS model clause contains a provision inviting the parties to determine the place of arbitration. Only in rare cases when no agreement is reached by the parties does the arbitral tribunal decide.
According to section 22.1 DIS Arbitration Rules, it is clarified that the parties’ freedom to choose the language in which the arbitration will be conducted is a generally accepted principle for the DIS. An official mandatory court language does not exist in DIS arbitrations. Instead, the parties can choose the ruling language on the arbitration, and only in absence of such agreement does the tribunal decide. The DIS Secretariat is able to administer arbitration proceedings conducted in German, English or French. In the case of the parties using another language, the Secretariat is entitled to order a translation and to charge the costs to the parties (No. 19 of Appendix to section 40.5 – Schedule of Costs).
The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties and as applicable to the substance of the dispute (section 23.1 DIS Arbitration Rules). If the tribunal does not respect the parties’ decision, the award could later be set aside under section 1059 German Code of Civil Procedure. Further, section 23.1 DIS Arbitration Rules determines that any choice of law clause must be interpreted as a choice of the respective substantive law, excluding any conflict of laws rules. Section 23.2 DIS Arbitration Rules imposes the duty on the arbitral tribunal to determine the applicable law if the parties have not reached a respective agreement. In addition, the arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so (section 23.3 DIS Arbitration Rules).
At every stage of the proceedings, the arbitral tribunal should seek to encourage an amicable settlement of the dispute or of an individual issue in dispute (section 32.1 DIS Arbitration Rules). If the parties settle the dispute, the arbitral tribunal shall terminate the proceedings. If requested by the parties, the arbitral tribunal shall record the settlement in the form of an arbitral award on agreed terms, unless the contents of the settlement are in violation of public policy (section 32.2 DIS Arbitration Rules). Although the wording of section 32.1 DIS Arbitration Rules must not be misunderstood to mean that the main task of the arbitral tribunal is to cause a settlement of the dispute, the arbitral tribunal should consider that a settlement might be in the best interests of both parties and should address this possibility if it has the impression that it is appropriate. The content of section 32 DIS Arbitration Rules is similar to section 278 of the German Code of Civil Procedure.
Closing and termination of proceedings
The arbitral tribunal may set a time limit if it is convinced that the parties have had sufficient opportunity to present their case (section 31 DIS Arbitration Rules). The proceedings are terminated by the final award rendered by the arbitral tribunal, or by a termination order of the arbitral tribunal or of the DIS, if the claim is withdrawn or if the proceedings end otherwise before the rendering of a final award (section 39 DIS Arbitration Rules).
Further arbitration-related services offered by the DIS
The DIS performs the functions of a national committee of the International Chamber of Commerce (ICC) with respect to ICC arbitrations. The DIS proposes arbitrators at the request of the ICC Court of Arbitration and participates in the ICC Commission on Arbitration and its sub-committees.
The DIS also acts as Appointing Authority under the UNCITRAL Arbitration Rules where the parties have so agreed or at the request of the Permanent Court of Arbitration (PCA). In addition, the DIS also nominates arbitrators in ad hoc proceedings (domestic or international) if the parties have so agreed.
The DIS and the Frankfurt Chamber of Industry and Commerce have jointly founded the Frankfurt International Arbitration Center (FIAC) in 2005. It is located on the site of the Frankfurt Chamber of Industry and Commerce. Frankfurt is a suitable and easily assessable location for investment arbitration proceedings, being Germany’s leading banking and finance centre. FIAC provides hearing and meeting room facilities particularly equipped for arbitrations as well as services in connection with the conduct of hearings at its venue. FIAC also organises conferences and other events related to arbitration. Further information is available at www.fiac-arbitration.de.
The International Center for Settlement of Investment Disputes (ICSID) and the DIS signed a cooperation agreement regarding the conduct of arbitrations under the ICSID Arbitration Rules. ICSID, an affiliate of the World Bank, offers member states and private investors the opportunity to settle disputes arising from international investment projects by way of mediation or arbitration. Pursuant to section 63 of the ICSID Convention, in principle proceedings take place at the seat of ICSID. If the proceedings are to be conducted at any other place, approval of ICSID is required. The cooperation agreement makes it possible to conduct the proceedings at the FIAC premises, without requiring specific approval. The DIS website publishes a broad collection of bilateral investment protection treaties (BITs) that include Germany as one contracting state.
In May 2005, the DIS founded the Arbitration Documentation and Information Center eV (ADIC). The main goal of ADIC is the documentation of arbitral awards, the library for literature referring to arbitration and other forms of ADR, the education of arbitrators and mediators (eg, preparation for international moot court competitions or conducting summer courses in international commercial law with relevance to arbitration), research in the area of arbitration as well as online services. Further details on ADIC can be found at www.adic-germany.de.
The DIS also provides advisory and organisational support to arbitral tribunals and parties, mainly but not restricted to DIS arbitrations. In addition, the DIS provides its online database on arbitration law. This database contains the cases of German courts related to arbitration. The decisions are indexed by case numbers, the date of the decision, a bibliographical reference and by a list of keywords (in German) to facilitate the search. English summaries of the key decisions are provided. The database is generally accessible. DIS members and participants in DIS arbitral proceedings (arbitrators and counsel) receive a user ID and can undertake a full text search.
DIS activities in other ADR proceedings
The parties often have an interest in pursuing an amicable resolution of the dispute by means of separate proceedings conducted before an independent and impartial third party who is not authorised to decide the dispute finally. Because the increasing demand for ADR, the DIS dedicated the year 2010 to the implementation of several ADR rules and published a booklet including the rules and standards as relevant for DIS-administered ADR proceedings. The number of ADR cases administered by the DIS has fluctuated. In 2013, 11 ADR cases were administered by the DIS and by the end of December 2014, a total of 14 cases had been filed according to the DIS ADR rules. However, in 2015, only 6 ADR cases were filed.
The basic regime refers to a conflict management proceeding and is called Konfliktmanagementordnung (DIS-KOM). The focus of DIS-KOM is the support of the parties to decide on the best available proceeding for the concrete dispute. The goal is to find the most effective proceeding for each dispute in order to meet the parties’ economic, legal and further interests. The parties are supported by a conflict manager who has no decision-making power but provides proposals regarding the best choice for a proceeding.
Further, the DIS also administers mediation and conciliation proceedings. Effective from 1 May 2010, the DIS provides separate mediation rules, Mediationsordnung (DIS-MedO), which consider all relevant factors of mediation proceedings. The mediator is described as an independent and impartial person who shall be allowed to provide proposals to the parties if the parties agree mutually (section 3.4 DIS-MedO). The mediation rules can be used for domestic as well as in international disputes. Persons of any nationality can be appointed as mediators by the parties. If the parties cannot agree, they can ask the DIS to appoint a mediator and to administer the mediation proceeding (section 4.5 DIS-MedO).
With respect to conciliation, the Schlichtungsordnung (DIS-SchlO) came into force. The DIS-SchlO is the transformation of the already existing DIS Mediation/Conciliation Rules, effective on 1 January 2002, now focusing only on conciliation. The DIS-SchlO provides also the possibility for an appointment of the conciliator by the DIS (section 8, DIS-SchlO). The DIS-SchlO leaves it up to the parties and the conciliator to frame the proceeding. The conciliator is allowed to submit a non-binding decision if the parties ask for one.
The ADR rule set also includes rules for a binding or non-binding expert opinion, namely the Schiedsgutachtensordung (DIS-SchG) for binding expert opinions and the Gutachtensordnung (DIS-GO) for non-binding expert recommendations on the case. Both regimes were adopted on 1 May 2010. Finally, the DIS adjudication rules (DIS-AVO) guide the parties who want to establish a dispute board at the beginning of projects, responsible for all disputes during the project development. The DIS-AVO is effective from 1 July 2010.
DIS services for young arbitrators
In summer 2002, the DIS initiated DIS40, the German Initiative of Young Arbitrators. Membership of DIS40 is possible for any person under the age of 40 interested in arbitration. The aim of DIS40 is to enhance the experience of young arbitrators and to discuss questions that are of interest especially for young arbitrators. The meetings are more informal and several events have been organised.
In addition, the DIS powers an initiative, which is called the Co-Chairs’ Circle (CCC). The goal of CCC is the exchange of co-chairs of sister organisations and to found networking groups as opportunity to meet and exchange ideas. Further information can be found at www.dis-arb.de/ccc/index.html.
Further, the DIS supports young academics in the area of alternative dispute resolution with an award for outstanding academic work, which is awarded every two years.
DIS model clause
The DIS provides a model clause for parties interested in using DIS arbitration. This model clause is a comprehensive arbitration clause, including all disputes arising ‘in connection with’ a contract. This model clause also contains an explicit exclusion of the competence of state courts as it is required by some national jurisdictions. It also serves as a reminder to less experienced parties that arbitration is a fully fledged alternative to the jurisdiction of state courts and not a preliminary procedure.
The model clause contains some recommended additions, such as the place of arbitration and the language of the proceedings, the substantive law applicable to the dispute or the number of arbitrators. The required form for the arbitration agreement is determined by the statutory regimes applicable to the arbitration agreement (eg, insection 1031 German Code of Civil Procedure). Pursuant to widespread statutory rules and international custom, the arbitration agreement may be contained in a contractual clause or in a separate agreement.
Contact details for the DIS:German Institution of Arbitration (DIS)
Tel: +49 221 285520
Fax: +49 221 28552222
* The content of this chapter is accurate as at January 2016.