In a decision dated 30 November 2011 and published in 2012, the Federal Court of Justice held that a German court requested to enforce a foreign arbitral award may specify costs and interest in order to make an arbitral award enforceable in Germany, just as a corresponding German judgment would be (see Legal update, Federal Court of Justice decision on specification of foreign arbitral award in enforcement proceedings concerning decision on costs and interest). In doing so, the Federal Court of Justice clarified that German courts requested to enforce a foreign arbitral award have a duty to specify a cost and interest decision by a foreign arbitral tribunal, insofar as this is possible by taking evidence on the foreign law in order to make such an award executable in Germany. If it becomes necessary for a German court to take evidence on foreign law, this will of course prolong enforcement proceedings and make them more costly. Therefore, it is advisable for parties to ensure that an arbitral award is clear in its operative part, including setting out issues which are self-evident under national law.

In a rare decision, the Higher Regional Court of Frankfurt am Main set aside a domestic arbitral award under section 1059(2) No. 1(d) ZPO (corresponding to Article V(1)(d) of the New York Convention). In this case, the arbitral tribunal had not followed the agreed procedure regarding the content of briefs and terms of reference for an expert that the court held had been agreed by the parties as set out in procedural orders by the tribunal (see Legal update, German court sets aside award where tribunal did not adhere to what the court held to be the parties' agreed procedure). The decision has implications for arbitrations with their seat in Germany and was confirmed by the Federal Court of Justice at the end of 2012.

The decision is surprising, in that the tribunal had followed international standard procedure in discussing procedural orders and terms of reference for the expert with the parties and in recording the parties' agreement with the content of these procedural rules in those documents. The court held that, by doing so, the tribunal was bound by party agreement and no longer had the discretion to deviate from those procedural rules later in the proceedings, even if this meant that a tribunal had no means of preventing one of the parties from obstructing the proceedings indefinitely.

This makes it necessary for arbitral tribunals with their seat in Germany to adjust the wording in procedural orders which are discussed and agreed on with the parties in line with international best practice. The wording of the procedural order should make clear that the procedure is being ordered by the tribunal "after consultation with the parties" and not as a "procedural order by consent". Alternatively, the tribunal might add language to a "procedural order by consent" allowing it to deviate from the agreed procedure where necessary, at its reasonable discretion. This gives the tribunal the necessary flexibility to react to obstructive behaviour by one of the parties.

In an eagerly awaited decision dated 10 May 2012, the Higher Regional Court of Frankfurt am Main confirmed the interim award on jurisdiction in the arbitration proceedings between Eureko BV and the Slovak Republic (PCA Case No. 2008-13, UNCITRAL). The court held that the arbitration clause in the Netherlands and Slovakia bilateral investment treaty (BIT) was valid and did not violate EU law (see Legal update, Higher Regional Court of Frankfurt confirms validity of arbitration clause in dispute between investor and EU Member State). Accordingly, Slovakia's application to set aside the arbitral tribunal's interim award on jurisdiction was dismissed. Slovakia has filed a notice of appeal against the decision.

The court took a rather pragmatic approach to Slovakia's unsuccessful argument concerning Article 344 of the Treaty on the Functioning of the European Union (TFEU) and to some of the rather intricate questions of the interplay between EU law, BITs and international public law. For the time being, investment treaty arbitration under an intra-EU BIT is obviously not prepared to surrender to the EU Commission's desire to remove such disputes from this forum in order to avoid investment treaty awards potentially violating EU law. This ruling undermines the so-called "intra-EU jurisdictional objection" and will certainly also lend support to ICSID arbitral tribunals in their reasoning against such an objection.