Arbitrator Agreement
The arbitrator agreement is a special type of contract in German civil law that governs the legal relationship between an arbitrator and the parties involved in an arbitration proceeding. This agreement is of central importance for conducting private dispute resolution procedures outside state courts, particularly in the context of arbitral proceedings. The following will comprehensively explain the structure, legal classification, formation, content, as well as the duties and rights of the parties involved.
Legal Classification of the Arbitrator Agreement
Definition and Distinction
An arbitrator agreement forms the personal and substantive basis for an individual to act as arbitrator in a specific arbitration proceeding. It is a contractual agreement between the arbitrator and the parties to the arbitration. The arbitrator agreement must be differentiated from the arbitration agreement: The arbitration agreement obligates the parties to submit their dispute to an arbitral tribunal, whereas the arbitrator agreement directly concerns the legal relationship between the parties and the arbitrator.
Legal Nature of the Arbitrator Agreement
According to prevailing opinion, the arbitrator agreement is usually considered a service contract in the sense of §§ 611 et seq. BGB, since the arbitrator renders an intellectual, instruction-free service as an independent and neutral entity—the decision-making in the arbitration process. Occasionally, contractual elements of work contracts or a unique contract type are discussed, but the arbitrator agreement is generally subject to the rules of service contract law.
Formation of the Arbitrator Agreement
Conclusion
The arbitrator agreement is generally formed by the acceptance of the appointed arbitrator by the parties or an arbitral institution. Mere appointment is not sufficient; the arbitrator must expressly or implicitly accept the appointment. The agreement can be concluded without formal requirements, though written agreements are common in practice, especially in institutionalized arbitration proceedings.
Particularities in Multi-Person Relations
In proceedings with multiple arbitrators (e.g., a three-member arbitral tribunal), the arbitrator agreement is concluded between each individual arbitrator and the parties (“multi-party agreement”). The relationship among the arbitrators themselves (internal relationship) is further governed by rules of procedure or procedural regulations.
Content of the Arbitrator Agreement
Main Obligations
- Duty to Act: The arbitrator is obliged to conduct the proceedings impartially, independently, and with due diligence, as well as to render a decision (arbitral award).
- Rules of Procedure: The basis is often the agreed or statutory arbitration rules (such as those of the German Institution of Arbitration (DIS)) or an individually agreed set of procedural rules.
- Duty of Confidentiality: Arbitrators are obligated to maintain confidentiality regarding both the content of the proceedings and other confidential information.
Secondary Obligations
- Duty to Disclose Incompatibility and Recusal: Arbitrators must disclose any circumstances that may raise doubts about their independence and impartiality; if there are concrete grounds for bias, they are obligated to resign from office.
- Duty of Documentation: Careful documentation and record-keeping of the course of proceedings and relevant decisions.
Remuneration and Expenses
The remuneration of the arbitrator, including reimbursement of expenses, is regularly part of the agreement. The parties are jointly and severally liable for the remuneration unless otherwise agreed regardless of fault. The amount is determined by party agreement, arbitration rules, or a remuneration schedule for arbitrators. If not expressly agreed, the usual remuneration is deemed agreed upon (§ 612 BGB).
Rights and Obligations of the Parties Involved
Rights and Obligations of the Parties
- Right to Proper Proceedings: The parties are entitled to proper, neutral, and legal proceedings as well as to a decision by qualified and independent arbitrators.
- Duty of Cooperation: The parties are obligated to cooperate in the proceedings, such as naming evidence and paying the remuneration.
Rights and Obligations of the Arbitrator
- Right to Remuneration: The arbitrator may demand reasonable remuneration for his or her services as well as reimbursement of necessary expenses.
- Right of Withdrawal and Resignation: The arbitrator may resign from office for good cause, for instance in the event of conflicts of interest or persistent obstruction of duties by the parties. Resignation without valid reason may result in liability for damages.
- Liability: The liability of the arbitrator is generally limited to intent and gross negligence. State legal remedies apply to the arbitral award itself, such as setting aside the award for procedural errors.
Termination of the Arbitrator Agreement
Contractual and Statutory Reasons for Termination
- Regular Termination: With the pronouncement of the arbitral award, the arbitrator agreement generally ends automatically unless subsequent tasks (e.g., correction or interpretation of the arbitral award) are contractually agreed.
- Extraordinary Termination: The agreement may be terminated without notice by any party or the arbitrator for good cause, for example in cases of conflicts of interest, ongoing obstruction of proceedings, or illness of the arbitrator.
- Death or Permanent Incapacity: Upon the death or permanent incapacity of the arbitrator, the agreement terminates automatically.
Consequences of Termination
- Fulfillment of Outstanding Obligations: Outstanding remuneration or documentation duties may remain.
- New Arbitrator: The parties or the competent arbitral tribunal appoint a substitute arbitrator after termination in accordance with the rules of arbitration or pursuant to §§ 1034, 1035 ZPO.
Statutory Foundations of the Arbitrator Agreement
The legal provisions governing the arbitrator agreement are not codified, but arise from various sources:
- Service Contract Law: §§ 611 ff. BGB (German Civil Code)
- Arbitration Law: §§ 1025 ff. ZPO (Civil Procedure Code)
- Institutional Rules: Rules of procedure and rulebooks of various arbitral institutions (e.g., DIS, ICC, etc.)
- General Principles: BGB, especially §§ 125, 134, 138 concerning the form, legality, and morality of contracts.
Special Features and Issues of Distinction
Difference from a Mediation Agreement
The arbitrator agreement regulates legal obligations in binding dispute resolution, while the mediation agreement aims for a consensual solution. The arbitrator is authorized to make a decision, whereas the mediator is not.
Application in National and International Context
In international arbitration, the rights and duties of arbitrators are often governed, in addition to national law, by institutional or international rules such as the UNCITRAL Arbitration Rules or the ICC Rules. The basic principles of the arbitrator agreement apply accordingly.
Summary
The arbitrator agreement constitutes the legal foundation for the activity of arbitrators in civil law disputes and regulates requirements for independence, conduct of proceedings, remuneration, and the rights and obligations of all parties involved. The special features of this contract result from the special function of the arbitrator as a private decision-maker and the tension between providing a service and exercising independent decision-making authority. The legal basis comprises service contract law, arbitration law, and the relevant procedural rules of arbitral institutions. Adherence to statutory and contractual requirements is essential for a lawful and fair arbitration procedure.
Frequently Asked Questions
How is an arbitrator agreement classified legally?
Legally, an arbitrator agreement is considered neither a pure employment contract nor a typical service contract. In jurisprudence, it is usually classified as an “atypical service contract.” This means that the arbitrator undertakes, on behalf of an association or organizer, to exercise sporting leadership or oversight without entering into a personal dependency as is characteristic of employment. The decisive feature is that the arbitrator is not integrated into the organizational structure of the principal, but rather acts essentially independently and in accordance with the rules of sports law. Nevertheless, contractual rights and obligations exist, such as proper management of the game, neutrality, or confidentiality concerning confidential information.
What are the obligations of the arbitrator under the agreement?
By entering into the arbitrator agreement, the arbitrator commits to conduct a match impartially, objectively, and in accordance with the applicable regulations. The arbitrator must observe the relevant sports rules and the instructions of the organizing bodies. Furthermore, duties of care and loyalty apply, such as ensuring one’s own physical and mental condition for proper officiating, adhering to deadlines for arrival, as well as obligations in dealing with players and officials. Secondary activities must be reported if they could result in a conflict of interest. The arbitrator is also responsible for the proper documentation of the match (e.g., match report).
What rights does the arbitrator have?
On the basis of the arbitrator agreement, the arbitrator in particular may claim the agreed remuneration as well as reimbursement of expenses and costs (such as travel expenses, additional subsistence costs). These claims are generally directed against the organizer, association, or referring institution. In addition to the right to remuneration, there is a claim for support and protection by the organizer, for example in the case of disputes, disciplinary proceedings, or threats from third parties (e.g., spectators, involved clubs). Legally relevant is also the right to be heard in legal or sports disciplinary proceedings in the event of complaints.
What liability issues must be considered with arbitrator agreements?
The arbitrator is generally liable only for grossly negligent or intentional conduct in connection with his or her activity. Erroneous decisions made in the course of normal officiating usually do not give rise to civil liability because they are part of the sporting risk and are handled under sports law principles. However, liability may arise if an arbitrator clearly violates rules or safety requirements and causes damage as a result. Injuries to athletes resulting from failure to control the field or failure to comply with minimum medical standards may result in liability in individual cases. It is advisable to review existing insurance arrangements, as many associations have taken out liability insurance for their arbitrators.
Can an arbitrator agreement be terminated at any time?
The arbitrator agreement is usually limited in time to officiating one or more specific matches or events and ends automatically with the conclusion of the respective match or tournament. Ordinary termination during an ongoing event is only legally possible in exceptional cases, for example, in cases of serious breaches of contract or for good cause such as health impairments of the arbitrator. Otherwise, only the right to extraordinary termination exists if the relationship of trust is irreparably damaged. Early cancellation by the arbitrator generally requires timely notification, especially if the cancellation could cause organizational problems.
What special data protection obligations apply to arbitrators?
As part of an arbitrator agreement, personal data (e.g., name, date of birth, contact details of the arbitrator, but also match data and sanctions) is processed. Arbitrators are subject to the data protection requirements of the General Data Protection Regulation (GDPR). They are obliged to treat as confidential any personal information made available to them in the course of officiating (for example, about players, coaches, or officials) and not to disclose it to third parties without authorization. Associations and organizers must inform the arbitrator about the nature, scope, and purpose of data processing. Violations of data protection obligations may result in employment and sports law consequences as well as possible fines.
