In arbitral proceedings, the jurisdiction of the state courts is limited (Section 1026 Code of Civil Procedure; Zivilprozessordnung, ZPO). On the one hand, while the arbitral proceedings are ongoing, the courts have powers to assist during the arbitral proceedings by deciding on the appointment and the challenge of arbitrators (Sec 1035 to 1039 ZPO). They can also to step in where the arbitral tribunal lacks jurisdiction and support the taking of evidence (Section 1050 ZPO). On the other hand, the state courts are competent to review the legality of the arbitral proceedings and the award once the proceedings have been concluded (Section 1059 ZPO).
The issue before the Munich Court of Appeals (Oberlandesgericht) earlier this year was whether a dispute between parties to an arbitration about the effectiveness of an arbitrator’s appointment can be decided during the arbitral proceedings on the basis of Sec 1035 para. 4 ZPO, or whether such a decision has to wait until the arbitral proceedings have been concluded and an award has been made.
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