Arbitrability of Corporate Law Disputes: A German Perspective
Dr. iur. Nils Schmidt-Ahrendts,
Alessandro Covi
In Germany, as in most other developed and developing countries, arbitration has become the business communities’ preferred means of dispute resolution. Thus, it comes by no surprise that «corporate law disputes» between German or between German and foreign entities are, as a general rule, resolved by means of arbitration. It has always been beyond doubt that the vast majority of these disputes is arbitrable. However, with regard to corporate law disputes which require a binding decision on all shareholders, for example, actions for the annulment of shareholder resolutions, the German arbitration law has undergone a remarkable development.
This development is predicated on two landmark cases of the German Federal Supreme Court. In 1996, the German Federal Supreme Court established that arbitral awards could not be binding on all shareholders. In 2009, the German Federal Supreme Court reversed this finding and acknowledged that arbitral awards can have such an “erga omnes” effect, subject to the condition that the arbitral proceedings are functionally equivalent to state court proceedings.
The aim of the present article is to delineate the aforementioned landmark cases by analyzing the holdings, the underlying facts, the case history and the reasoning of the German Federal Supreme Court. This analysis is followed by a comprehensive overview of the “DIS- Supplementary Rules for Corporate Law Disputes” that the German Institution of Arbitration enacted in the aftermath of the second Decision of the German Federal Supreme Court on the arbitrability of actions for the annulment of shareholder resolutions. The final part of this contribution addresses the application of the “DIS-Supplementary Rules for Corporate Law Disputes” in practice until today.