Arbitration: Formal requirements for the validity of arbitral awards in light of the OLG Frankfurt decision of 28.03.2023
The importance of formal requirements in arbitration proceedings is regularly underestimated, although they are a central prerequisite for the recognition and enforcement of arbitral awards. In particular, a recent decision by the Higher Regional Court (OLG) of Frankfurt am Main (decision dated 28.03.2023, Az.: 26 Sch 14/22) shows how strictly courts handle the requirements for the signing of an arbitral award and for the proper documentation of any grounds for obstruction. The decided case leads to practical implications that require particular care from both parties and arbitral tribunals.
Principle of joint signing
According to § 1054 para. 1 sentence 1 ZPO, arbitral awards must be signed by all members of the arbitral tribunal. This principle underscores the collective responsibility of the entire tribunal for the decision. An exception is only provided for if an arbitrator is genuinely prevented and this is explicitly and comprehensibly stated in the award. Case law emphasizes that the signatures are not merely a formality, but serve as an important element in the decision-making process. If a required signature is missing, the entire award is generally void, provided there is no sufficient statement of prevention.
Need for individual documentation
The statement of prevention only fulfills its function if it clearly shows why an arbitrator was unable to sign. General, meaningless phrases or subsequent explanations are not sufficient. Rather, the documentation must be recognizable in the award itself, or at least by clear references. In the case before the OLG Frankfurt, it was merely stated that one of the arbitrators was prevented for health reasons—a justification the court found insufficient.
Consequences of inadequate form
Failure to observe these formal requirements has serious consequences. If an award is issued without the signature of all arbitrators and without a sufficient statement of prevention, it is formally invalid and has no legal effect. As a result, recognition and enforcement of such an award under § 1060 ZPO can be denied by state courts. Likewise, any state court proceedings based on such an award are open to challenge. This legal consequence is in line with the fundamental aim of ensuring legal certainty in arbitration.
Implications for national and international arbitration
This case law is especially relevant in the context of cross-border disputes. The recognition and enforcement of foreign arbitral awards depends crucially on compliance with the underlying formal requirements in the state of origin. Deficiencies such as a missing statement of prevention or improper signature can, therefore, lead to significant difficulties in an international context. Due to the close interconnection of various legal systems in commercial transactions, arbitral tribunals and parties alike must strictly ensure compliance with these formalities.
Practical guidance for avoiding errors
Even though no specific procedures or strategies are set out here, the case law makes it clear how important it is to consider formal hurdles in arbitration from the outset. Above all, companies, investors, or wealthy individuals should pay attention in arbitration not only to the substantive outcome, but also to the formal safeguarding of the decision. In the absence of these requirements, the arbitral award is legally vulnerable, which may pose a considerable economic risk.
Conclusion
The OLG Frankfurt decision once again emphasizes that formal errors in arbitration cannot be remedied retroactively. For parties to arbitration, it is therefore important to ensure complete and comprehensible documentation during the proceedings. In view of complex national and international rules, a legal review of the validity of an arbitral award may be advisable in individual cases.
For further information and legal questions on arbitration and the validity of arbitral awards, the Rechtsanwälte at MTR Legal, as a nationally and internationally active business law firm, are happy to assist you.
