In the case before the court (Docket No. 34 SchH 008/10), the claimant, an ice hockey team, was a shareholder of the respondent, a limited liability company which engages in the promotion and development of professional ice hockey. The articles of association contained an arbitration clause and, with regard to the bias of an arbitrator, a reference to sections 1036 and 1037 ZPO. The clause provided for five potential arbitrators who would rotate to compose the three-member arbitral tribunal.

After insolvency proceedings had been initiated against the claimant, the respondent refused to extend the claimant's playing licence and terminated its existing club licence with immediate effect. The claimant initiated court proceedings and at the same time filed for arbitration against these decisions, while contesting the competence of the arbitral tribunal. After the arbitral tribunal affirmed its jurisdiction in an interim decision, the claimant challenged the arbitrators citing the following reasons which allegedly raised reasonable doubts as to the impartiality and independence of the arbitrators:

The fact that the arbitral tribunal's decision on the validity of its appointment was made without taking evidence, despite the arbitrators' personal and economic interest in acting as arbitrators, was also identified as an indication of bias.

The arbitral tribunal rejected the challenge as unfounded, and the claimant requested a judicial review of the arbitral tribunal's decision. The Higher Regional Court of Munich declared that the motion was admissible but rejected it. According to the court, the motion was unfounded as there were no justifiable doubts as to the arbitrators' impartiality or independence (sections 1036 and 1037 ZPO). The same standard that applies to determining whether state court judges are biased (section 42(2) ZPO) generally applies to arbitrators. Justifiable doubts exist if, from the perspective of the parties, there are objective grounds that raise doubts in the mind of a circumspect and reasonable person. Purely subjective concerns are not sufficient.

The court held that the claimant had failed to put forward any such objective grounds. According to the court, the mere fact that the arbitrators did not issue a "declaration of independence" did not provide sufficient grounds for a challenge. Pursuant to section 1036(1) ZPO, an arbitrator must disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. However, the court held that there is no legal basis for an obligation to declare that no such circumstances exist. Moreover, an arbitrator is not required to disclose the duration of his activity as an arbitrator or the place of his office.

The court also rejected the further grounds for challenge raised by the claimant for the arbitral tribunal's failure to take evidence with regard to its competence. The court made it clear that except where it can be shown that dismissal of the motion for the taking of evidence was arbitrary, the challenge of an arbitrator cannot be used as an instrument to contest the reasoning of the arbitral tribunal.

The decision helpfully clarifies the obligation contained in section 1036 ZPO as to which circumstances have to be disclosed. Because of the domestic nature of the case, the court did not refer to the IBA Guidelines on Conflicts of Interest in International Arbitration.