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.
The DIS is a registered association with its seat in Berlin. Since December 2018, its main secretariat is located in Bonn. The management of the association is conducted by the secretariat, headed by its secretary general, Dr Francesca Mazza.
The DIS is also governed by a board of directors, consisting of 18 members. An advisory board, consisting of 20 members, assists the board of directors.
The DIS has approximately 1,400 members from Germany and abroad. A frequently updated list of all members is available online at the DIS website (see www.disarb.org). 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 2017, 160 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 €2,000 to €2 billion. In 2017, 44 per cent of the arbitration cases included foreign parties from, for example, China, Europe, Mexico, Russia, Singapore and the United States.
The DIS Arbitration Rules and Supplementary Rules
The DIS Arbitration Rules in effect were adopted on 1 March 2018. In contrast to the DIS Arbitration Rules 1998, the revised rules of 2018 address the international focus and emphasise efficiency and structure combined with a clear service approach of the DIS case management team. Further, the DIS Arbitration Rules 2018 take the demands for a flexible and comprehensive spectrum of conflict resolution methods into account. The DIS Arbitration Rules are available on the DIS website in English and German. Additionally, French, Russian, Spanish, Turkish, Arabic and Chinese translations are available of the DIS Arbitration Rules 1998.
Referring to its article 1.1, the DIS Arbitration Rules apply to international and domestic arbitrations 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 request for arbitration according to article 5.2 of the 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 Arbitration Rules 2018 have reformed the former supplementary rules for expedited proceedings (DIS SREP) and incorporated them as an annex to the DIS Arbitration Rules. Therefore, the DIS Arbitration Rules follow an opt-in model. Parties must specifically agree to expedite proceedings. Further, the DIS Rules for Sports-related Arbitration were adopted on 1 January 2008 and were revised on 1 April 2016 (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 is possible. Sport-related arbitration proceedings administered by the DIS are increasing: there were seven proceedings in 2014, 16 proceedings in 2015 and 27 proceedings in 2017.
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. In 2018, they were modified in order to adapt to the revised DIS Arbitration Rules 2018.
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, is subject to debate and might be addressed in judicial reform in the near future.
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 Bonn, the DIS also has secretariats in Berlin and Munich. Proceedings commence when the request for arbitration is received by the DIS (article 5.1 DIS Arbitration Rules).
According to article 6.1 of the DIS Arbitration Rules, the request for arbitration must contain the following:
- an identification of the parties and designated counsel;
- a specification of the relief sought;
- the amount of any quantified claims and an estimate of the monetary value of any unquantified claims;
- particulars regarding the facts and circumstances that give rise to the claims;
- the arbitration agreement or agreements on which the claimant relies;
- the nomination of an arbitrator if required under the Rules, and any particulars or proposals regarding the seat of the arbitration;
- the language of the arbitration; and
- the rules of law applicable to the merits.
Upon filing the request for arbitration, the claimant must pay the DIS administrative fee within a time limit set by the DIS (article 5.3 DIS Arbitration Rules). The request for arbitration is delivered to the respondent by DIS (article 5.5 DIS Arbitration Rules).
According to article 10.1 of the DIS Arbitration Rules, the parties may agree that the arbitral tribunal shall be comprised of a sole arbitrator, of three arbitrators or of any other odd number of arbitrators. If the parties have not agreed upon the number of arbitrators and do not agree on the arbitral tribunal being comprised of a sole arbitrator, the arbitral tribunal is comprised of three arbitrators (article 10.2 DIS Arbitration Rules). 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 president of the arbitral tribunal (articles 12.1 and 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 (article 11 DIS Arbitration Rules). If the nominating procedure fails, the Appointing Committee of the DIS nominates a substitute arbitrator. The Committee consists of three members and three alternate members who are appointed by the DIS board of directors for a period of three years, whereby the appointment may be renewed once (article 6, Annex 1 DIS Arbitration Rules). Decisions are taken by the three regular members of the Committee. The 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 chair of the arbitral tribunal.
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 professional know-how, as well as previous experience as arbitrator or counsel in arbitration, of persons interested in acting as arbitrators in DIS proceedings. The database is not limited to DIS members.
Arbitrators, upon being nominated, are required to submit a written declaration (articles 9.3 and 9.4 DIS Arbitration Rules) regarding their acceptance and their impartiality and independence as well as regarding the compliance with any agreed qualifications. According to articles 9.1 and 9.6 of the DIS Arbitration Rules, the concepts of impartiality and independence must be adhered to throughout the entire arbitration. Further, the prospective arbitrator must disclose any facts or circumstances that could cause a reasonable person in the position of a party to have doubts as to the arbitrator’s impartiality and independence (article 9.4 DIS Arbitration Rules). The DIS sends each prospective arbitrator’s declaration and potential disclosures to the parties, and gives them the opportunity to comment on the appointment (article 9.5 DIS Arbitration Rules). Following this, the arbitrator is appointed by the DIS (article 13.1 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 could cause a reasonable person in the position of a party to have doubts as to the arbitrator’s impartiality and independence, or if he or she does not possess qualifications agreed to by the parties (article 15.1 DIS Arbitration Rules). The challenge shall be notified and substantiated to the DIS within 14 days of the party learning of the reason for challenge (article 15.2 DIS Arbitration Rules). After circulation of the challenge request to the challenged arbitrator, the other arbitrators and the other party comment within a time limit (articles 15.3 and 15.4 DIS Arbitration Rules), and the Arbitration Council of the DIS decides upon the challenge (article 15.4 DIS Arbitration Rules). The Arbitration Council works as an independent board for each arbitration tribunal, rendering decisions regarding the governance of the arbitration tribunal. Its establishment is one of the most noteworthy innovations under the DIS Arbitration Rules 2018 in contrast to the DIS Arbitration Rules 1998. In comparison, section 18.2 of the DIS Arbitration Rules 1998 allowed the arbitral tribunal to decide on the challenge itself, unless otherwise agreed by the parties.
Conduct of proceedings
After its constitution, the arbitral tribunal holds a case management conference as soon as possible, in principle within 21 days (article 27.2 DIS Arbitration Rules). During this conference, the arbitration tribunal shall discuss the procedural rules to be applied in the proceedings and the procedural timetable. Further, the arbitration tribunal is required to discuss measures for increasing procedural efficiency, expedited proceedings and the possibility of using mediation or another method of amicable dispute resolution (article 27.4 DIS Arbitration Rules). During or after this conference, the arbitral tribunal issues a procedural order and a procedural timetable (article 27.5).
Two core principles of arbitration are fixed in article 21.1 of the 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 (article 28.1 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 (Annex 2, Schedule of Costs). 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 article 25 of the DIS Arbitration Rules, it is confirmed that arbitral tribunals have, unless otherwise agreed by the parties, the authority to order any interim or conservatory 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 must comply with article 21 of the 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, and applicable law
Provided that the parties did not agree on the place of arbitration, it shall be determined by the arbitral tribunal according to article 22.1 of the DIS Arbitration Rules. According to article 22.2 of the 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 where no agreement is reached by the parties does the arbitral tribunal decide.
According to article 23 of the 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 or English. If the parties use another language, the secretariat is entitled to order a translation and to charge the costs to the parties (paragraph 3.7 Schedule of Costs).
The arbitral tribunal shall decide the dispute in accordance with such rules of law as are chosen by the parties and applicable to the substance of the dispute (article 24.1 DIS Arbitration Rules). If the tribunal does not respect the parties’ decision, the award could later be set aside under section 1059 of German Code of Civil Procedure. Notwithstanding, article 24.2 of the DIS Arbitration Rules determines that the arbitral tribunal shall apply the rules of law that it deems to be appropriate, if the parties have not agreed upon the rules of law to be applied to the merits of the dispute. 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 (article 24.4 DIS Arbitration Rules).
The DIS Arbitration Rules 2018 encourage amicable settlements and increases awareness of ADR methods. The parties may request the appointment of a dispute manager, who advises and assists the parties in selecting the appropriate dispute resolution mechanism for resolving the dispute (article 2.2 DIS Arbitration Rules). Further, 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, unless any party objects thereto (article 26 DIS Arbitration Rules). The arbitration tribunal is specifically required to address this during the case management conference (article 27.4 DIS Arbitration Rules). Lastly, the arbitral tribunal may record a settlement in an award by consent at the request of the parties, unless the arbitration tribunal holds that there are serious grounds not to do so (article 41.1 DIS Arbitration Rules). This also applies for a decision arising out of proceedings pursuant to the DIS Mediation Rules, the DIS Conciliation Rules and the DIS Rules on Adjudication (article 41.2 DIS Arbitration Rules).
Closing and terminating proceedings
After the last hearing or the last admitted submission, whichever is later, the arbitral tribunal closes the proceedings by a procedural order (article 31 DIS Arbitration Rules). 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 (article 42 DIS Arbitration Rules).
Further arbitration-related services offered by the DIS
The DIS 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. 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 Centre (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 Centre 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 article 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 that include Germany as one contracting state.
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. 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 of the increasing demand for ADR, the DIS offers two approaches: first, the DIS has specifically emphasised the possibility of using mediation or any other method of amicable dispute resolution in the DIS Arbitration Rules 2018, thus allowing the parties to model the proceedings according to their particular requirements. Secondly, the DIS offers rules regarding the entire spectrum of ‘stand-alone’ ADR proceedings, including conciliation, mediation, expertise, expert determination and adjudication, and administers the proceedings independent from arbitration proceedings. The number of ADR cases administered by the DIS has fluctuated. Although in 2014 a total of 14 cases had been filed according to the DIS ADR rules, in 2016 only six, and in 2017, only five ADR cases were filed.
The basic regime refers to a conflict management proceeding called DIS Conflict Management Rules (CMR). The focus of CMR 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 DIS Mediation Rules (MedR), 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 MedR). 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 MedR).
With respect to conciliation, the DIS-Conciliation Rules 02 (ConR) came into force. The ConR are the transformation of the already existing DIS Mediation/Conciliation Rules, effective on 1 January 2002, now focusing only on conciliation. The ConR also provide the possibility for an appointment of the conciliator by the DIS (section 8 ConR). The ConR leave 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 DIS Rules on Expert Determination for binding expert opinions, and the DIS Rules on Expertise for non-binding expert recommendations on the case. Both regimes were adopted on 1 May 2010. Finally, the DIS Rules on Adjudication (AR) guide the parties who want to establish a dispute board at the beginning of projects, responsible for all disputes during the project development. The AR is effective from 1 July 2010.
Lastly, the DIS provides the Sports Arbitration Rules 2016, which are specifically tailored for sports-related disputes.
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 to young arbitrators. The meetings are more informal and several events have been organised.
In addition, the DIS powers an initiative called the Co-Chairs’ Circle (CCC). The goal of the CCC is the exchange of co-chairs of sister organisations, and to establish networking groups as an opportunity to meet and exchange ideas. Further information can be found at www.co-chairs-circle.com.
Further, the DIS supports young academics in the area of ADR 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 and the number of arbitrators. The required form for the arbitration agreement is determined by the statutory regimes applicable to the arbitration agreement (eg, in section 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.
The following are the contact details for the DIS:German Arbitration Institute (DIS)
Marienforster Strasse 52
Tel: +49 0 228 391 815 200
Fax: +49 0 228 391 815 222