{"id":131538,"date":"2026-03-09T13:22:46","date_gmt":"2026-03-09T13:22:46","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=131538"},"modified":"2026-03-09T13:22:46","modified_gmt":"2026-03-09T13:22:46","slug":"germany-investment-treaty-arbitration","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/germany-investment-treaty-arbitration\/","title":{"rendered":"Germany: Investment Treaty Arbitration"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-131538","comparative_guide","type-comparative_guide","status-publish","hentry","guides-investment-treaty-arbitration","jurisdictions-germany"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Gleiss Lutz<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2023\/05\/Untitled-2-7.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Gleiss Lutz<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2023\/05\/Untitled-2-7.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Investment Treaty Arbitration laws and regulations applicable in Germany<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your home state signed and \/ or ratified the ICSID Convention? If so, has the state made any notifications and \/ or designations on signing or ratifying the treaty?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) on 27 January 1966 and ratified it on 18 April 1969, entering into force for Germany on 18 May 1969. Germany has not entered any territorial exclusions or reservations upon ratification.<\/p>\n<p>Germany implemented the ICSID Convention through the Law on the Convention of 18 March 1965 for the Settlement of Investment Disputes between States and Nationals of Other States (<em>InvStreit\u00dcbkG<\/em>), which entered into force on 26 February 1969 and remains the governing statute for ICSID enforcement proceedings.<\/p>\n<p>No special interpretative declarations were made on ratification. However, as discussed below, German courts have in recent years interpreted the Convention in light of EU law constraints in intra-EU disputes, significantly affecting its practical application.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your home state signed and \/ or ratified the New York Convention? If so, has it made any declarations and \/ or reservations on signing or ratifying the treaty?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany signed the New York Convention on 10 June 1958 and ratified it on 30 June 1961. The Convention entered into force in Germany on 28 September 1961.<\/p>\n<p>Germany originally signed the Convention subject to the reciprocity reservation under Article I(3), which limited application of the Convention to awards made in the territory of another Contracting State, though in 1998, Germany withdrew its reciprocity reservation. As a result, German courts will now also enforce awards made in states that are not parties to the New York Convention. Germany has not made the commercial reservation under Article I(3).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your home state have a Model BIT? If yes, does the Model BIT adopt or omit any language which restricts or broadens the investor's rights?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany has a model bilateral investment treaty, most recently updated in 2008, which contains the following core protections:<\/p>\n<ul>\n<li>Fair and equitable treatment (Article 2);<\/li>\n<li>Full protection and security (Article 2);<\/li>\n<li>Protection against arbitrary or discriminatory measures (Article 2);<\/li>\n<li>National treatment (NT) and most-favoured-nation (MFN) treatment (Article 3), though noting that measures taken for reasons of public security and order shall not be deemed less favorable treatment;<\/li>\n<li>Protection against unlawful expropriation (Article 4);<\/li>\n<li>Free transfer of payments (Article 5); and<\/li>\n<li>Umbrella clause (Article 7.2).<\/li>\n<\/ul>\n<p>Article 8 of the 2008 Model BIT extends the application of the treaty to investments made prior to the entry into force of the relevant treaty. The 2008 Model BIT provides for both state-to-state dispute settlement (Article 9) and investor-state dispute settlement (Article 10).<\/p>\n<p>However, since 2009, treaties concerning foreign direct investment have been directly negotiated and concluded by the European Union, rather than by individual EU Member States, following the Treaty of Lisbon entered into force, which requires the EU Parliament\u2019s approval of new trade deals. It should be noted that no BITs have been concluded on the basis of the 2008 revision to the Model BIT.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please list all treaties facilitating investments (e.g. BITs, FTAs, MITs) currently in force that your home state has signed and \/ or ratified. To what extent do such treaties adopt or omit any of the language in your state's Model BIT or otherwise restrict or broaden the investor's rights? In particular: a) Has your state exercised termination rights or indicated any intention to do so? If so, on what basis (e.g. impact of the Achmea decisions, political opposition to the Energy Charter Treaty, or other changes in policy)? b) Do any of the treaties reflect (i) changes in environmental and energy policies, (ii) the advent of emergent technology, (iii) the regulation of investment procured by corruption, and (iv) transparency of investor state proceedings (whether due to the operation of the Mauritius Convention or otherwise). c) Does your jurisdiction publish any official guidelines, notes verbales or diplomatic notes concerning the interpretation of treaty provisions and other issues arising under the treaties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany has entered into bilateral investment treaties with 147 states from all over the globe, including partners in Europe, the Middle East, Southeast Asia, Latin America, and the Caribbean. Of these, 113 BITs are currently in force, with several intra-EU BITs having been terminated in recent years. Many of these cover substantive protections such as FET, full protection and security, non-discrimination, and dispute settlement mechanisms.<\/p>\n<p>Despite terminations stemming from the effects of Achmea and Komstroy, as well as the withdraw from the ECT, Germany continues to be party to BITs with third countries (non-EU parties), and investors often still invoke these treaties to bring claims.<\/p>\n<p><strong>a. Has your state exercised termination rights or indicated any intention to do so? If so, on what basis (e.g. impact of the Achmea decisions, political opposition to the Energy Charter Treaty, or other changes in policy)?<\/strong><\/p>\n<p>Intra-EU BITs: The ECJ&#8217;s 2018 Achmea decision has cast significant doubts as to the validity of intra-EU BITs. Following Achmea, EU Member States, including Germany, signed a declaration in January 2019 and subsequently concluded a termination agreement in May 2020, pursuant to which 23 EU Member States agreed to terminate their intra-EU BITs. Recently, the German Federal Court of Justice (Bundesgerichtshof, BGH) has expanded the prohibition of intra-EU investment arbitration to refuse the enforcement of cost awards in intra-EU arbitrations, although it remains unclear whether this should also apply where the host state is awarded costs when the arbitral tribunal declines jurisdiction based on the Achmea-doctrine.<\/p>\n<p>Energy Charter Treaty: Germany notified its withdrawal from the ECT in late 2022, with the withdrawal becoming effective on 20 December 2023. The withdrawal followed broader political opposition to the ECT within the EU, particularly given concerns about the treaty&#8217;s compatibility with EU climate objectives and the desire to move away from investor-state dispute settlement mechanisms in the energy sector. However, pursuant to the sunset clause in Article 47(3) of the ECT, existing investments will continue to enjoy protection for 20 years following the date of withdrawal, meaning the ECT will continue to provide protection for investments made before the withdrawal took effect until 20 December 2043.<\/p>\n<p><strong>b. Do any of the treaties reflect (i) changes in environmental and energy policies, (ii) the advent of emergent technology, (iii) the regulation of investment procured by corruption, and (iv) transparency of investor state proceedings (whether due to the operation of the Mauritius Convention or otherwise).<\/strong><\/p>\n<p>Corruption, transparency, and climate change have not been explicitly addressed in Germany\u2019s older BITs. More recently concluded investment treaties between the EU and non-EU states address these issues more clearly. In addition to the aforementioned German BITs, EU treaties are also binding upon Germany as a member state. For example, the EU-New Zealand Free Trade Agreement, signed on 9 July 2023 (not yet in force), expressly stresses the urgent need to address climate change and contains an entire article (Article 19.6) on &#8220;trade and climate change&#8221;. Similarly, the EU-United Kingdom Trade and Cooperation Agreement, in force since 1 May 2021, contains provisions on &#8220;trade and climate change&#8221;.<\/p>\n<p>The EU has developed a new approach to dispute settlement, introducing an investment court system in free trade agreements such as CETA (with Canada) and investment protection agreements with Singapore and Vietnam. These agreements provide for public hearings, publication of pleadings and judgments, and an appellate body to ensure consistency and accuracy of decisions.<\/p>\n<p><strong>c. Does your jurisdiction publish any official guidelines, notes verbales or diplomatic notes concerning the interpretation of treaty provisions and other issues arising under the treaties?<\/strong><\/p>\n<p>Germany does not maintain a centralized, official interpretative guide covering all its investment treaties. However, its Federal Ministry for Economic Affairs and Climate Action (Bundesministerium f\u00fcr Wirtschaft und Klimaschutz) publishes guidance on treaty implementation and legal issues, such as notices on the inadmissibility of intra-EU ISDS under EU law. These materials provide practical interpretive insight into how treaties are understood in the context of evolving legal frameworks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your home state have any legislation \/ instrument facilitating direct foreign investment. If so: a) Please list out any formal criteria imposed by such legislation \/ instrument (if any) concerning the admission and divestment of foreign investment; b) Please list out what substantive right(s) and protection(s) foreign investors enjoy under such legislation \/ instrument; c) Please list out what recourse (if any) a foreign investor has against the home state in respect of its rights under such legislation \/ instrument; and d) Does this legislation regulate the use of third-party funding and other non-conventional means of financing.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany does not have specific legislation protecting foreign investments. The laws applicable to domestic investors and domestic investment apply equally to foreign investors and investment, both with regard to regulation and to possible subsidies. Certain guarantees encapsulated in the German Constitution (Grundgesetz or GG), such as Article 14 on the protection of property rights and prerequisites for lawful expropriation, equally apply to foreign investments.<\/p>\n<p><strong>a. Please list out any formal criteria imposed by such legislation \/ instrument (if any) concerning the admission and divestment of foreign investment;<\/strong><\/p>\n<p>Germany has a liberal foreign direct investment regime with no general formality requirements for the admission of foreign investments. However, the German Foreign Trade and Payments Act (Au\u00dfenwirtschaftsgesetz or AWG) and the Foreign Trade and Payments Ordinance (Au\u00dfenwirtschaftsverordnung or AWV) provide for a screening system through which certain foreign investments can be blocked or restricted for public order or national security reasons. The Federal Ministry for Economic Affairs and Climate Action (Bundesministerium f\u00fcr Wirtschaft und Klimaschutz or BMWK) administers this screening mechanism.<\/p>\n<p>At the EU level, EU Regulation 2019\/452 (effective 11 October 2020) established a European screening mechanism for foreign direct investment, creating a unified framework with cooperation requirements while allowing Member States to maintain their own screening mechanisms on security or public order grounds.<\/p>\n<p><strong>b. Please list out what substantive right(s) and protection(s) foreign investors enjoy under such legislation \/ instrument;<\/strong><\/p>\n<p>Foreign investors in Germany benefit from general constitutional protections under the Grundgesetz, including protection of property rights and equal treatment. Investment protection is primarily provided through Germany&#8217;s network of BITs and multilateral treaties<\/p>\n<p><strong>c. Please list out what recourse (if any) a foreign investor has against the host state in respect of its rights under such legislation \/ instrument; and<\/strong><\/p>\n<p>Foreign investors may resort to domestic judicial review of actions through German administrative or civil courts, seeking annulment proceedings, injunctions, and damages claims under national law principles. While they may generally seek the same remedy as German nationals, they are unable to file constitutional complaints. Investors can also invoke investment treaties (where applicable and valid) to arbitrate against Germany in international forums such as ICSID or under UNCITRAL rules, provided the investment is covered and procedural requirements are met.<\/p>\n<p><strong>d. Does this legislation regulate the use of third-party funding and other non-conventional means of financing.<\/strong><\/p>\n<p>Third-party funding is permissible in Germany, and there is a substantial market of potential funders. However, lawyers admitted to the German Bar are generally not permitted to fund proceedings themselves under Section 49b para. 2 Federal Code for Lawyers (Bundesrechtsanwaltsordnung). Foreign counsel may derogate from these restrictions to the extent permitted in their home jurisdiction. The domestic legislation does not specifically regulate the use of third-party funding in investment treaty arbitration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has your home state appeared as a respondent in any investment treaty arbitrations? If so, please outline any notable practices adopted by your state in such proceedings (e.g. participation in proceedings, jurisdictional challenges, preliminary applications \/ objections, approach to awards rendered against it, etc.)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany has been respondent in seven known treaty cases over the past decades:<\/p>\n<table width=\"628\">\n<tbody>\n<tr>\n<td><strong>Case<\/strong><\/td>\n<td><strong>Treaty<\/strong><\/td>\n<td><strong>Status<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Ashok Sancheti v. Germany<\/td>\n<td>Germany-India BIT (1995)<\/td>\n<td>Terminated<\/td>\n<\/tr>\n<tr>\n<td>Vattenfall AB, Vattenfall Europe AG, Vattenfall Europe Generation AG v. Germany (ICSID Case No. ARB\/09\/6, Vattenfall I)<\/td>\n<td>ECT<\/td>\n<td>Settled<\/td>\n<\/tr>\n<tr>\n<td>Vattenfall AB and others v. Germany (ICSID Case No. ARB\/12\/12, Vattenfall II)<\/td>\n<td>ECT<\/td>\n<td>Settled<\/td>\n<\/tr>\n<tr>\n<td>Strabag SE, Erste Nordsee-Offshore Holding GmbH and Zweite Nordsee-Offshore Holding GmbH v. Germany (ICSID Case No. ARB\/19\/29)<\/td>\n<td>ECT<\/td>\n<td>Decided in favor of investor<\/td>\n<\/tr>\n<tr>\n<td>Mainstream Renewable Power Ltd and others v. Germany (ICSID Case No. ARB\/21\/26)<\/td>\n<td>ECT<\/td>\n<td>Pending<\/td>\n<\/tr>\n<tr>\n<td>Klesch and Raffinerie Heide v. Germany (ICSID Case No. ARB\/23\/49)<\/td>\n<td>ECT<\/td>\n<td>Pending<\/td>\n<\/tr>\n<tr>\n<td>AET v. Germany (ICSID Case No. ARB\/23\/47)<\/td>\n<td>ECT<\/td>\n<td>Pending<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>As only one adverse award has been rendered to date against Germany and given that it has decided to challenge this award by filing rectification and annulment applications, little can be said about its attitude towards enforcement of awards. However, it can be noted that Germany has participated in proceedings, represented by both external counsel and officials from the Federal Ministry of Economics.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Have any significant court decisions\/arbitral awards been issued in the last year involving your country (as a party or interested party)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>Domestic Court Jurisprudence on Intra-EU Arbitration:<\/strong> German courts have been at the forefront of applying the Achmea-doctrine articulated by the CJEU, which holds that investor-state arbitration clauses in intra-EU BITs and proceedings arising from the ECT are incompatible with EU law.<\/p>\n<p>Following this jurisprudence, the German Federal Constitutional Court (Bundesverfassungsgericht, BVerfG) dismissed constitutional challenges against domestic courts\u2019 application of the doctrine, reinforcing that the termination of intra-EU BITs by EU Member States effectively precludes continued reliance on investor\u2013state arbitration clauses in those treaties. Courts have also extended this reasoning to ICSID arbitrations initiated under the ECT when both investor and host state are based within the EU; for instance, the Higher Regional Court of Berlin declared an ICSID arbitration against Spain under the ECT inadmissible, applying Achmea\/Komstroy reasoning and holding there was no valid arbitration agreement in the intra-EU context.<\/p>\n<p>The German Federal Court of Justice (Bundesgerichtshof, BGH) further clarified that ICSID exclusivity does not preclude domestic court scrutiny of arbitration agreements in the special case of intra-EU disputes given EU law\u2019s primacy.<\/p>\n<p><strong>Extra-EU BIT Enforcement:<\/strong> In contrast, German courts have distinguished between intra-EU and extra-EU BIT cases. For example, in Deutsche Telekom v India, the German Federal Court of Justice (Bundesgerichtshof, BGH) upheld enforcement of an arbitral award arising from an arbitration under the Germany-India BIT, explicitly holding that the Achmea-doctrine and EU law concerns underpinning the Achmea-doctrine do not apply to extra-EU BITs. The court reasoned that the principle of mutual trust embedded in Achmea pertains only to intra-EU relations and does not extend to treaties between a Member State and a third country, confirming that extra-EU BIT arbitration clauses remain effective and enforceable under the New York Convention.<\/p>\n<p><strong>Arbitral Awards Against Germany:<\/strong> The Strabag SE v Germany award represents a watershed moment as the first ICSID award ever rendered against Germany arising from alleged regulatory expropriatory measures affecting offshore wind investments under the ECT. Strabag has filed a petition in a US court to recognize and enforce the award. Meanwhile, Germany initiated ICSID annulment proceedings (under Article 52 of the ICSID Convention). Pending a decision on the annulment, the final outcome remains uncertain.<\/p>\n<p>&nbsp;<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Has jurisdiction been used to seat non-ICSID investment treaty proceedings? If so, please provide details.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany has been used as a seat for non-ICSID investment treaty arbitration proceedings and is generally considered an arbitration-friendly jurisdiction.<\/p>\n<p>A notable example is Raiffeisen Bank International AG and Raiffeisen Bank Austria d.d. v. Republic of Croatia (II) (PCA Case No. 2020-15), a UNCITRAL arbitration seated in Frankfurt arising under the Austria-Croatia BIT. Before the tribunal was fully constituted, Croatia invoked Section 1032(2) German Code of Civil Procedure to seek a declaration from the Higher Regional Court of Frankfurt that the arbitration was inadmissible. In February 2021, the court declared the arbitration inadmissible, holding that the BIT\u2019s arbitration clause was invalid under the ECJ\u2019s Achmea judgment. The German Federal Court of Justice (Bundesgerichtshof, BGH) confirmed this ruling in November 2021, and the case was subsequently discontinued.<\/p>\n<p>The Raiffeisen II decision was the first time an EU court extended Achmea beyond the specific BIT at issue to all intra-EU BITs. This procedural mechanism under Section 1032(2) German Code of Civil Procedure has since been invoked in relation to ICSID arbitrations as well. In July 2023, the German Federal Court of Justice (Bundesgerichtshof, BGH) ruled that Section 1032(2) German Code of Civil Procedure applies in the intra-EU context even to ICSID arbitrations, declaring three such arbitrations inadmissible. For non-intra-EU investment treaty arbitrations, Germany remains a viable and arbitration-friendly seat. However, for intra-EU disputes, the Raiffeisen II line of cases indicates that selecting Germany as a seat carries substantial risks, as German courts will apply Achmea to declare such arbitrations inadmissible.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please set out (i) the interim and \/ or preliminary measures available in your jurisdiction in support of investment treaty proceedings, and (ii) the court practice in granting such measures.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>German arbitration law provides that arbitral tribunals may issue interim measures (Section 1041(1) German Code of Civil Procedure), which may also include security for costs. Interim arbitral measures \u2013 whether in domestic or foreign arbitral proceedings \u2013 may under certain circumstances be declared enforceable by state courts and thus be subject to enforcement.<\/p>\n<p>In addition, German state courts remain competent under the general rules and may issue interim orders. If and to the extent that German courts have international jurisdiction, German courts may also issue interim measures in support of foreign arbitral proceedings. The requirements are governed by German law, whereby generally high standards apply and anticipation of the merits is impermissible.<\/p>\n<p>Furthermore, arbitral awards may be subject to provisional enforcement (Section 1063(3) German Code of Civil Procedure). The requirements for this are very high, such that in practice they will only be met in few cases.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please set out any default procedures applicable to appointment of arbitrators and also the Court's practice of invoking such procedures particularly in the context of investment treaty arbitrations seated in your home state.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>German arbitration law contains default procedures for the appointment of arbitrators in Sections 1034 et seq. German Code of Civil Procedure. These rules apply only to arbitrations seated in Germany.<\/p>\n<p>If a party fails to appoint an arbitrator within one month of receiving a request to do so from the other party, or if the two party-selected arbitrators fail to agree on the presiding arbitrator within one month of their appointment, the appointment shall be made by the court upon request of a party.<\/p>\n<p>If the arbitration agreement grants preponderant rights to a party with respect to the composition of the arbitral tribunal that places the other party at a disadvantage, the disadvantaged party may seize the court to restore balance.<\/p>\n<p>The Higher Regional Courts (Oberlandesgerichte) have jurisdiction over court assistance in arbitration matters.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In the context of awards issued in non-ICSID investment treaty arbitrations seated in your jurisdiction, please set out (i) the grounds available in your jurisdiction on which such awards can be annulled or set aside, and (ii) the court practice in applying these grounds.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 1059 German Code of Civil Procedure, an arbitral award may be set aside only if the conditions for refusing enforcement are met. These grounds are congruent with Article 34 of the UNCITRAL Model Law and Article V of the New York Convention.<\/p>\n<p>The grounds include:<\/p>\n<ul>\n<li>Incapacity of a party or invalidity of the arbitration agreement;<\/li>\n<li>Lack of proper notice of appointment of an arbitrator or of the arbitral proceedings, or inability to present one&#8217;s case;<\/li>\n<li>The award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration;<\/li>\n<li>The composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or the law;<\/li>\n<li>The subject matter of the dispute is not capable of settlement by arbitration under German law; and<\/li>\n<li>The award conflicts with the public policy of Germany.<\/li>\n<\/ul>\n<p>An application to set aside an arbitral award must be made within three months of the date on which the party making the application received the award.<\/p>\n<p>German courts apply a high threshold for setting aside awards and generally do not conduct a full review of the factual and legal aspects of an arbitral award (the prohibition of <em>r\u00e9vision au fond<\/em> applies). A <em>r\u00e9vision au fond<\/em> is only permissible where the award violates public policy. For instance, in a recent judgment, the German Federal Court of Justice (<em>Bundesgerichtshof<\/em>, BGH) held that state courts can conduct a full review of alleged violations of competition law if the relevant rules belong to public policy.<\/p>\n<p>The parties may waive their right to invoke a particular ground for setting aside the award, except for grounds considered <em>ex officio,<\/em> such as violation of public policy. However, a general waiver of grounds for setting aside declared prior to the notification of the award is void.<\/p>\n<p>The state court can set aside an arbitral award in whole or in part but cannot modify it. If an award is set aside, the court has discretion in certain cases to remand the dispute back to the arbitral tribunal.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In the context of ICSID awards, please set out: (i) the grounds available in your jurisdiction on which such awards can be challenged and (ii) the court practice in applying these grounds.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The German legal framework for ICSID awards, articulated in the InvStreit\u00dcbkG and relevant provisions of the German Code of Civil Procedure, provides a distinctive enforcement regime. Under Article 54 of the ICSID Convention, Contracting States (including Germany) commit to treating an ICSID award as binding and enforceable as a domestic judgment. Consequently, German courts will not entertain domestic annulment or set-aside grounds for ICSID awards.<\/p>\n<p>They may only defer enforcement if the award has been annulled under Article 52 of the ICSID Convention, or if enforcement is stayed under Articles 50\u201352. German courts have no authority to apply general domestic grounds to refuse recognition or enforcement. However, it remains to be seen whether and to what extent the Achmea case law will have significance in the enforcement of ICSID arbitral awards in intra-EU situations. To date, no decision by a German court is known that has refused to declare an intra-EU ICSID arbitral award enforceable.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent can sovereign immunity (from suit and\/or execution) be invoked in your jurisdiction in the context of enforcement of investment treaty awards.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Germany follows international law rules on restrictive immunity. The legal basis for the doctrine of sovereign immunity in Germany is customary international law. It applies directly pursuant to Article 25 of the German Basic Law (Grundgesetz), which provides that the general rules of international law are an integral part of federal law and take precedence over other laws.<\/p>\n<p>Foreign states do not enjoy immunity from suits in respect of non-sovereign acts (acta jure gestionis). The decisive characteristic for distinguishing between acta jure imperii and acta jure gestionis is &#8220;the nature of the act of the state or of the underlying legal relationship&#8221;.<\/p>\n<p>Pursuant to the jurisprudence of the German Federal Court of Justice (Bundesgerichtshof, BGH), a state&#8217;s submission to the jurisdiction of an arbitral tribunal in a BIT is generally deemed a waiver of immunity for the purposes of proceedings for the declaration of enforceability of any arbitral award before German courts.<\/p>\n<p>Germany also follows customary international law regarding immunity from execution. Accordingly, immunity from execution will be granted with respect to property in use or intended for use for sovereign or public purposes, subject to the previously mentioned waiver application.<\/p>\n<p>Importantly, a waiver of immunity from suit (for purposes of the recognition and enforcement proceedings) does not extend to the execution proceedings stage. For execution proceedings, i.e., compulsory enforcement measures, a separate explicit or implicit waiver is required. Thus, notwithstanding that a party may have obtained a declaration of enforceability, it may still face sovereign immunity defences when attempting actual execution against state property.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please outline the grounds on which recognition and enforcement of ICSID awards can be resisted under any relevant legislation or case law. Please also set out any notable examples of how such grounds have been applied in practice.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Because Germany is a Contracting State to the ICSID Convention and has implemented the treaty in domestic law, recognition and enforcement of ICSID awards is almost automatic once an award is presented for enforceability under the <em>InvStreit\u00dcbkG<\/em> and relevant German Code of Civil Procedure provisions. German courts do not entertain general domestic grounds for refusal at the recognition stage; these grounds are not applicable to ICSID award enforcement because of Article 54\u2019s binding nature. As set out above, it remains to be seen whether and to what extent the <em>Achmea<\/em> case law will have significance in the enforcement of ICSID arbitral awards in intra-EU situations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please outline the practice in your jurisdiction, as requested in the above question, but in relation to non-ICSID investment treaty awards.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the New York Convention regime in Germany, foreign arbitral awards are enforced through the German Code of Civil Procedure\u2019s enforcement mechanism. Applicants must submit the award and required documentation to the competent Higher Regional Court, which assesses whether the award is valid, final, and not subject to any Article V refusal grounds to be considered ex officio.<\/p>\n<p>German courts approach these enforcement proceedings with a pro-arbitration stance, upholding awards. Formal requirements, such as translation or certified award copies, are procedural rather than substantive, and courts are generally reluctant to refuse enforcement solely on public policy grounds unless there has been a clear violation of due process or fundamental legal norms. This practice provides a secure enforcement environment for investors holding non-ICSID treaty awards.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">To what extent does your jurisdiction permit awards against states to be enforced against state-owned assets or the assets of state-owned or state-linked entities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>German law differentiates between state assets (<em>i.e.<\/em>, state-owned assets) and indirectly state-owned assets held through state-owned enterprises (<em>i.e.<\/em>, assets of state-owned or state-linked entities). Where an arbitral award has been rendered against the state, German law generally permits enforcement only against state-owned assets, with assets used for sovereign purposes remaining exempt \u2013 meaning the state enjoys immunity from execution in this regard. German law does not recognize an <em>alter ego<\/em>-doctrine, which is why enforcement of an arbitral award rendered against the state against assets of state-owned or state-linked entities is generally precluded. Reverse piercing of the corporate veil likewise does not occur or would, in any case, be subject to very high thresholds.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please highlight any recent trends, legal, political or otherwise, that might affect your jurisdiction's use of arbitration generally or ISDS specifically.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Currently, legislative initiative is proposed to modernize German arbitration law. The reforms aim to align German arbitration law with current needs and strengthen Germany\u2019s attractiveness as a venue for dispute resolution in general and arbitration in particular. Key reform proposals include:<\/p>\n<ul>\n<li>Arbitration agreements will no longer need to be concluded in writing; instead, they may also be concluded by other means of communication, in particular electronic communication (draft section 1031(1) German Code of Civil Procedure).<\/li>\n<li>Arbitral proceedings may be conducted as video hearings (draft section 1047 German Code of Civil Procedure), unless the parties have agreed otherwise. This provision is clarificatory in nature.<\/li>\n<li>Arbitral awards may be issued in electronic form (draft section 1054 German Code of Civil Procedure). This change is far-reaching and is intended to make arbitral proceedings more efficient, less resource-intensive, and faster. Though, it remains to be seen whether electronic awards will gain acceptance in practice.<\/li>\n<li>Documents may be submitted in English in arbitration-related state court proceedings, including in proceedings for the recognition and enforcement, or the setting aside, of arbitral awards.<\/li>\n<li>Proceedings for the recognition and enforcement, or the setting aside, of arbitral awards, as well as the other proceedings listed in section 1062(1) German Code of Civil Procedure, may be conducted entirely in English where certain requirements are met.<\/li>\n<\/ul>\n<p>The federal state governments will be empowered to establish, by ordinance, the jurisdiction of the commercial courts for the proceedings specified in section 1062(1) German Code of Civil Procedure.<\/p>\n<p>Further, as set out above, several EU-level initiatives are shaping the ISDS landscape for Germany. Germany has significantly restructured its investment treaty framework in response to EU jurisprudence and German courts have developed a substantial body of case law addressing the interaction between EU law and investment arbitration.<\/p>\n<p>While Germany\u2019s role as an ISDS respondent remains limited, German investors are among the most active ISDS claimants globally. Recent notable cases include Wintershall v. Russia.<\/p>\n<p>The Act to Strengthen Germany as a Forum for Litigation entered into force on 1 April 2025, providing the basis for the establishment of specialized Commercial Courts and Commercial Chambers that may conduct proceedings in English. This development is expected to strengthen Germany\u2019s attractiveness as a dispute resolution venue, including for arbitration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please highlight any other investment treaty related developments in your jurisdiction to the extent not covered above (for e.g., impact of the Achmea decisions, decisions concerning treaty interpretation, appointment of and challenges to arbitrators, immunity of arbitrators, third-party funding and other non-conventional means of financing such proceedings).<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For European investors, including German investors, the <em>Achmea<\/em> and <em>Komstroy<\/em> decisions of the CJEU continue to have a significant impact in practice and have the potential to decrease Germany\u2019s attractiveness as a place for investment. Following these decisions, foreign investors are more often than not interested in advice on how to structure their investments so that they are not considered European investors for purposes of intra-EU investment arbitration. This trend is not alleviated by the fact that arbitral tribunals have, in several instances, expressly declined to follow the jurisprudence of the CJEU. Nonetheless, awards rendered in intra-EU arbitral proceedings remain capable of enforcement outside the European Union, according to prevailing jurisprudence in other non-EU jurisdictions. In any event, this further increases the need for a tailor-made investment strategy on a case-by-case basis.<\/p>\n<p>The upfront planning and structuring of investments has also become the focus of attention due to geopolitical developments leading to shifts by countries towards protectionism and a trend in investment arbitration towards non-voluntarily compliance with awards by states. Accordingly, investors must consider not only the availability of treaty protections but also the practical enforceability of any resulting award in their investment strategy. As a result, German investors plan their foreign investments more carefully and with greater attention to treaty protection risks, political risks and enforcement risks.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">5263<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/131538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=131538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}