Section 1063(2) and (3) of the German Code of Civil Procedure (Zivilprozessordnung, ZPO) provides:

The dispute concerned two long-term business partners dealing with the production and sale of sugar beet seeds. The parties had concluded cooperation agreements (dating back as far as 1957) for the cultivation of sugar beet seeds and the development of new varieties. When the cooperation ran into difficulties in 2013, the parties concluded an agreement providing for arbitration in Brussels under the Belgian Centre for Arbitration and Mediation (CEPANI) Arbitration Rules 2013.

In 2015, the tribunal rendered a final award, ordering, amongst other things, that the respondent:

The claimant initiated enforcement proceedings in the Higher Regional Court of Braunschweig. The respondent objected, arguing that the final award violated public policy as it implemented provisions emanating out of a 2006 cooperation agreement between the parties which violated antitrust law.

In order to overcome prolonged enforcement proceedings, the claimant made an application under section 1063(3) of ZPO for provisional enforcement of the final award, arguing that there was a danger that the respondent would frustrate execution. The purpose of the requested provisional enforcement was mainly to secure the sugar beet seed material.

The presiding judge of the Higher Regional Court rejected the application under section 1063(3). This was appealed by the claimant to the German Federal Court of Justice.

The Federal Court of Justice held that it was not competent to decide on the appeal, as the decisions made by the presiding judges of higher regional courts, under section 1063(3), are not appealable, regardless of whether the application was granted or rejected.

In a carefully reasoned decision, the court found that this follows from the wording of the relevant provisions, as well as the purpose of section 1063(3) which is to provide interim relief within arbitration. The court reasoned that section 1063(3) is a special provision in the scheme of provisions on interim measures. After reviewing various provisions dealing with interim relief in arbitration, as well as in court proceedings, the court found that decisions on interim relief generally are not appealable to the Federal Court of Justice. The court reasoned that this was in line with the provisional character of such rulings, which are typically rendered in expedited proceedings. Taking into account that time is of the essence in such proceedings, protracted appeal proceedings to the Federal Court of Justice are not compatible with the goal of reaching fast (and provisional) decisions on interim measures.

The Federal Court of Justice therefore declined to hear the appeal.

This decision is a welcome reminder for the international arbitration practitioner enforcing a foreign award in Germany. It reminds parties that the presiding judge of the competent higher regional court has the power to grant provisional enforcement measures under section 1063(3). This can be particularly helpful if the other party opposes enforcement by raising setting aside grounds, which can prolong the enforcement proceedings by as much as a year. The Federal Court of Justice has now held that this easily overlooked power, to grant provisional enforcement under section 1063(3), is non-appealable. If such provisional enforcement is granted, the enforcing party can secure execution of the award, without having to fear that enforcement will be further delayed by lengthy appeal proceedings on provisional enforcement.

Docket No. I ZB 90/15 (German Federal Court of Justice).