Originally from American Review of International Arbitration - ARIA

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I. PREFACE

By way of initial disclaimer, I am neither a German speaker nor a specialist in German Law. My knowledge of the German legal system is limited to a general comparative acquaintance. Nonetheless, I undertook this comment upon a recent German Supreme Court case because I found the language of the Court's opinion, as reported in summary through unofficial translations, to have a potentially revolutionary impact upon arbitration law. After completing the analysis, I did find the opinion extraordinary. I remain a steadfast supporter of arbitration, but I am firmly convinced that the opinion and the decisional law to which it can be aligned constitute a wrong-headed approach to arbitration and to the definition of its relationship to the law and of its role in the legal order.

It should also be underscored at the outset that the opinion is characteristically civilian: anonymous as to the parties, cryptic in the reporting of facts and in elucidating the Court's reasoning, and containing no indicia of counterpoint or dissent. Moreover, in terms of the procedural status of the decision, the opinion is merely a remand of the case to the lower appellate court for reconsideration in light of the higher court's admonitions. In a formal sense, the opinion is not a decision establishing doctrine.

I believe, however, that the mere pronouncement of these views by such an elevated tribunal, regardless of the qualified language of the opinion and its instructional character, gives them precedential value. They fit perfectly into the trend of eliminating all legal constraints on arbitration and parallel recent, equally radical developments in U.S. law. Procedural and technical considerations aside, this is a landmark opinion once it is integrated into the transborder context of the world law on arbitration.[1]