The 2018 DIS Arbitration Rules
Dr. Jan Kraayvanger
Ana Hadnes Bruder
On 1 March 2018, new arbitration rules of the German Institution of Arbitration ("DIS") will come into force. The DIS announced in January 2017 that it will be revising its Arbitration Rules ("DIS Rules"), which have been in force since 1998, to meet new demands and other changes in arbitral practice. The revised DIS Rules are designed to suit the needs of both domestic and international parties. They also aim to enhance the efficiency of arbitration, providing proceedings that are non-bureaucratic, flexible and open to party autonomy. The DIS Rules will apply to any arbitration starting on or after 1 March 2018.
The key amendments to the current DIS Rules include the following:
Procedural provisions
Submission format. The revised DIS Rules aim to simplify and unify the transmission of submissions. Therefore, all written submissions of the parties and the arbitral tribunal to the DIS shall be sent in electronic form, either by email or on a storage device. However, the request for arbitration as well as counterclaims or extensions of claims and their attachments have to be submitted in paper form in addition to electronic form until the arbitral tribunal has been constituted.
Deadlines. The revised DIS Rules set out a number of new deadlines aiming to make arbitration faster and more efficient:
Under Article 7.1 of the revised DIS Rules, the respondent shall notify the DIS of any proposals regarding the seat of the arbitration, the language of the proceedings and the rules of law applicable to the merits within 21 days after receipt of the request for arbitration.
If the tribunal consists of three arbitrators, the respondent shall also nominate its co-arbitrator within 21 days.
In its submission, the respondent may also request an extension of the deadline to submit the answer to the request for arbitration ("answer").
In general, the deadline for the respondent's answer is 45 days following its receipt of the request for arbitration. The respondent may also request that the deadline be extended up to a maximum of 30 days.
The DIS will request that the co-arbitrators, once appointed, jointly nominate the president of the arbitral tribunal ("president") within 21 days (instead of 30 days under the current DIS Rules). If they fail to do so, the DIS Appointing Committee selects and appoints the president.
Further rules for more efficiency
The revised DIS Rules establish further new requirements for more efficiency in arbitration. Article 27 establishes some of these measures. For example, a case management conference has to be held within 21 days from the constitution of the arbitral tribunal. In that conference, the tribunal shall discuss with the parties the procedural timetable, which of the measures set forth in the new Annex 3 to the DIS Rules should be applied in the proceedings, whether the expedited rules should be applied, and the possibility of using mediation or any other method of amicable dispute resolution. Annex 3 also outlines a set of measures – such as the limitation of submissions and witness testimonies, the issuance of partial awards and document production – that shall be discussed at a future case management conference.
Increased involvement of the DIS
The revised DIS Rules furthermore provide for an increased involvement of the DIS in the arbitration by strengthening the competences of the institution. Thus, in order to enhance efficiency in the proceedings and ensure the application of the new provisions, the DIS Rules require the tribunal to keep the DIS informed by transmitting to the DIS, inter alia, a copy of the procedural timetable and all procedural orders.
Arbitration with multiple parties and/or under multiple contracts and consolidation
The DIS Rules also set out provisions for arbitration proceedings involving more than two parties and arbitration proceedings based on multi-contract claims as well as joinder.
Claims arising out of or in connection with multiple contracts may be decided in a single arbitration (multi-contract arbitration), provided that all parties to the dispute have agreed thereto. If such an agreement is disputed, it is on the arbitral tribunal to decide the admissibility of such a multi-contract arbitration.
Also, claims between more than two parties may be decided in a single arbitration (multi-party arbitration) if there is an arbitration agreement that binds all of the parties to have their claims decided in a single arbitration or if all of the parties have so agreed in a different manner. It is on the arbitral tribunal to decide the admissibility of a multi-party arbitration if a dispute arises regarding whether the parties have agreed on such an arbitration.
Furthermore, the DIS Rules allow a party to submit a request for arbitration to the DIS in order to join an additional party after the arbitration has started. The party can only do so prior to the appointment of any arbitrator. Again, it is on the arbitral tribunal to decide the admissibility of such a joinder if a dispute arises over whether claims made by or against the additional party may be resolved in the pending arbitration.
Upon the request of one party and if all parties agree, the DIS may consolidate several arbitration proceedings into a single arbitration proceeding.
Appointment and challenge of arbitrators
If an arbitrator is challenged, the DIS informs the arbitrators and the other party of the challenge and sets a reasonable time limit for comments from the challenged arbitrator, the other arbitrators and the other party. Under the current DIS Rules, the other arbitrators do not comment on the challenge, as it is they who decide on the challenge of the arbitrator. Under the revised DIS Rules, this competence will now shift to the DIS, and a newly established body, the Arbitration Council, will decide on the challenge once the arbitrators and the other party have submitted their comments.
The revised DIS Rules furthermore aim to enhance the neutrality of arbitral tribunals. If the co-arbitrators do not nominate the president within the time limit set, the DIS Appointing Committee will elect and appoint an arbitrator of a different nationality than the parties unless the parties are of the same nationality or have agreed otherwise.
Article 12.2 of the DIS Rules now allows for the co-arbitrators to consult with the parties regarding the selection of the president.
Furthermore, the DIS Rules now contain a more elaborate provision on interim measures. The current DIS Rules already state that unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject matter of the dispute. The revised DIS Rules explicitly state in Article 25 that the arbitral tribunal may also amend, suspend or revoke any such measure. The new provision also sets out the procedure once a party has requested an interim measure. In general, the arbitral tribunal submits the request to the other party for comments. The arbitral tribunal may refrain from doing so if submitting the request for interim relief and hearing the other party would risk frustrating the purpose of the measure. However, in such a case, the arbitral tribunal has to notify the other party of the request no later than when ordering the measure. The arbitral tribunal shall promptly grant the other party a right to be heard. Thereafter, the arbitral tribunal has to confirm, amend, suspend or revoke the measure.
Overall, the DIS Rules should create more efficiency in arbitration. The new rules for more efficiency oblige the tribunal and the parties to discuss and agree on the procedure at an early stage of the arbitration. The new rules furthermore offer a wide range of measures that can lead to faster and less expensive proceedings, if the parties make use of them. The new deadlines set out in the DIS Rules will also help increase efficiency. The consolidation of multiple disputes into a single arbitration, multi-party or multi-contract arbitration proceeding, as well as joinder, are considered progress in respect to the efficiency of the arbitration proceedings. In light of that – and given that multi-party and multi-contract arbitration situations have increased significantly in recent years due to a growing complexity of business relationships – it is a welcome development that the revised DIS Rules now set out procedures in this regard.
Furthermore, by obliging the parties to make their submissions only in electronic form once the arbitration tribunal has been constituted, the DIS follows recent trends. German state courts are currently undergoing improvements that will oblige lawyers to file their submissions only electronically.
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