Originally from American Review of International Arbitration - ARIA

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I. BACKGROUND

The Federal Republic of Germany plays a leading role in world trade. Trade statistics clearly bear this out: in 1987, about 527 billion Deutsche Marks (DM) worth of goods and services were exported from the Federal Republic (about U.S, $250 billion at the September 1989 exchange rate); this represented approximately 28% of the West German gross national product.1 The export trade thus supports almost one out of three German employees. Imports for the same year totaled about U.S. $200 billion. By the beginning of 1987, German investments abroad had reached a peak of almost U.S. $70 billion, and foreigners had invested about U.S. $45 billion in the Federal Republic.

Though it is an elephant in international trade, the Federal Republic of Germany surprisingly is only a dwarf in international arbitration. German enterprises are certainly no less litigious, adversarial, antagonistic, and disputatious than their counterparts in other countries. Their share in international arbitration is substantial and presumably corresponds to their share in international trade. Yet international arbitration proceedings very rarely take place in the Federal Republic.2

The statistics speak for themselves. In 1988, the International Court of Arbitration of the International Chamber of Commerce in Paris — one of the world’s leading international arbitration institutions — either confirmed or fixed 222 West European seats of arbitration.3 Out of this number, seventy-nine arbitration seats were located in France, sixty-six in Switzerland, twenty in the United Kingdom, eleven in Belgium and only ten in the Federal Republic of Germany. Thus, the Federal Republic could attract only 12.7% of the international arbitration proceedings that France, for example, had attracted.

This low number warrants investigation, but first a closer look at the present state of German arbitration law is necessary.