Model Clause: German Institution of Arbitration

Arbitration Clause

The German Institution of Arbitration advises all parties wishing to make reference to DIS Arbitration in their contracts to use the following arbitration clause:

"All disputes arising in connection with the contract (... description of the contract ...) or its validity shall be finally settled according to the Arbitration Rules of the German Institution of Arbitration e.V. (DIS) without recourse to the ordinary courts of law."

It is recommended to supplement the arbitration clause by the following provisions:

- The place of arbitration is ...;

- The arbitral tribunal consists of ... (number of) arbitrators;

- The substantive law of ... is applicable to the dispute;

- The language of the arbitral proceedings is .......

Form of the agreement pursuant to the German arbitration law of 1998

An arbitration agreement, which in principle must be in writing, is required if a dispute is to be settled according to the present Arbitration Rules. According to international norm, this requirement is fulfilled if the arbitration agreement is contained in a contract signed by the parties or contained in letters, telefaxes or telegrams exchanged between the parties. The form of an arbitration agreement under German Law is governed by § 1031 ZPO (Code of Civil Procedure, CCP) since 1 January 1998:

Section 1031 CCP

1. The arbitration agreement shall be contained either in a document signed by the parties or in an exchange of letters, telefaxes, telegrams or other means of telecommunication which provide a record of the agreement.

2. The form requirement of subsection 1 shall be deemed to have been complied with if the arbitration agreement is contained in a document delivered from one party to the other party or by a third party to both parties and - if no objection was raised in good time - the contents of such document are considered to be part of the contract in accordance with common usage.

3. The reference in a contract complying with the form requirements of subsection 1 or 2 to a document containing an arbitration clause constitutes an arbitration agreement provided that the reference is such as to make that clause part of the contract.

4. An arbitration agreement is also concluded by the issuance of a bill of lading, if the latter contains an express reference to an arbitration clause in a charter party.

5. Arbitration agreements to which a consumer is a party must be contained in a document which has been personally signed by the parties. No agreements other than those referring to the arbitral proceedings may be contained in such a document; this shall not apply in the case of a notarial certification. A consumer is a natural person who, in respect of the transaction in dispute, is acting for a purpose which can be regarded as being outside his trade or self-employed profession ("gewerbliche oder selbständige berufliche Tätigkeit").

6. Any non-compliance with the form requirements is cured by entering into argument on the substance of the dispute in the arbitral proceedings.