An arbitral award is invalid if it is not signed by all arbitrators or if a note of inability is inadequate. This was decided by the OLG Frankfurt (Ref. 26 Sch 14/22).
An arbitration proceeding can offer several advantages over a court proceeding. Especially in international disputes, an arbitral award is often easier to enforce than a judgment of a national court, according to the commercial law firm MTR Legal Rechtsanwälte, which also supports its national and international clients in litigation and arbitration.
However, a prerequisite for a valid arbitral award is that it must be personally signed by all arbitrators. If an arbitrator is unable to personally provide the signature, at least a note of inability must be provided, indicating both the fact and the reason for the inability. Otherwise, an arbitral award is not valid, as shown by the decision of the OLG Frankfurt on April 27, 2023.
The case was based on the following facts: In the course of a planned corporate acquisition, the defendant sold several business divisions to the plaintiff. Both parties agreed on an arbitration clause. The buyer demanded damages in an arbitration claim because the defendant had not disclosed all relevant costs during the transaction. The arbitral tribunal, consisting of three arbitrators, dismissed the claim.
However, only two of the three arbitrators signed the arbitral award. Next to the preprinted name of the third arbitrator, there was only a note that the signature could not be obtained. The plaintiff applied for the annulment or the declaration of invalidity of the arbitral award due to this formal defect.
The OLG Frankfurt declared the arbitral award invalid due to the missing signature. It reasoned that an arbitral award must, in principle, be signed personally and by hand by the arbitrators. This is to ensure that the arbitrators take personal and legal responsibility and confirm the proper issuance of the arbitral award. If an arbitrator is unable to provide the signature, a note of inability stating the fact of prevention and the reason must be provided, as in a civil trial.
Since no reason was given here, the arbitral award is invalid, according to the OLG.
At MTR Legal Rechtsanwälte, experienced attorneys also advise in arbitration proceedings.
