Arbitration is an old concept that first appeared in the German Commercial Code and was renewed in 1998 when the country adhered to the UNCITRAL (United Nations Commission on International Trade Law) Model Law on international commercial arbitration. The regulatory body for arbitration is the German Institution of Arbitration (Deutsche Institution für Schiedsgerichtsbarkeit, DIS).
According to the German arbitration law the parties agreeing with arbitration in a commercial dispute should first sign an arbitration agreement, decide on the place, the language and how many arbitrators will judge the case. In German arbitration cases there are usually three arbitrators. Also, according to the arbitration rules in Germany, parties can select the arbitrators, otherwise a lawyer will be appointed to conduct the arbitration proceedings. After the parties have agreed on the place, the language and arbitrators, they must submit in writing all evidence they consider useful to their cause and must make sure the number of copies suffices for all participants in the arbitration process.
Once the documents are submitted, they will begin to be delivered to all parties involved in the arbitration. At the beginning of the arbitral procedures, the claimant must submit a statement that will contain the names of the parties, the amount of money desired, the motives that led to the arbitration, a succinct description of the arbitration agreement and details about when, where and how the arbitration should take place. Once the statement has been received it will be sent to the other party engaged in the arbitration process, called a respondent that will then have the right to file a statement of defense. Once all the proceedings have been concluded and the arbitral tribunal has judged the case and gave its ruling, the arbitral award must be rendered.
The arbitration agreement is concluded between parties in case they do not want to settle their dispute in a court of law. According to the German arbitration law, a court must deny to trial an arbitration case because it does not fall under its jurisdiction. Also, the arbitration agreement in Germany will be treated separately from the disputed contract or cause. Another provision of the German arbitration law is that arbitration agreements can be written and signed by both parties or can be recorded through any other means of communication.
The advantages of German arbitration are:
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