The applicant sought recognition and enforcement of a Swedish award in Germany. In the arbitral proceedings, the respondent had only challenged whether the substantive contract, which allegedly contained the arbitration agreement, had been concluded. However, he had not raised objections to the arbitral tribunal’s jurisdiction. Can the respondent, at the enforcement stage, successfully invoke that there was no valid arbitration agreement? The Higher Regional Court of Stuttgart (“OLG Stuttgart“), rejected this in the decision dated 8 October 2025 (21 Sch 4/25) – and rightly so.
Factual Background
The claimant, a Chinese national, in the arbitration proceedings claimed for a commission based on a consultancy agreement that he had allegedly concluded with the respondent, a German limited liability company. The consultancy agreement contained an arbitration clause providing for arbitration under the ICC Rules with the place of arbitration in Stockholm. In the arbitral proceedings, the respondent argued that no contract had been signed, nor had it been concluded in any other way. However, the respondent did not challenged the arbitral tribunal’s jurisdiction. The arbitral tribunal granted the claim, and the claimant/applicant sought recognition and enforcement of the award at the respondent’s seat in Germany.
The respondent objected and claimed that there was no valid contract and therefore no arbitration agreement. A fortiori, the arbitration agreement had not been made in writing as required by Art. II NYC. The arbitrator itself had found that there was no written agreement between the parties. In respondent’s view, recognition should therefore be refused pursuant to Art. V para. 1 NYC in connection with Section 1061 of the German Code of Civil Procedure due to lack of a valid arbitration agreement.
The Decision
According to Art. V NYC, recognition and enforcement may be denied if no arbitration agreement has been concluded or the arbitration agreement does not comply with the requirements of Art. II NYC. Art. II NYC provides that the arbitration agreement needs to be in writing. This was not the case. However, the OLG Stuttgart held that the respondent was precluded with his jurisdictional arguments.
In detail:
It is not relevant that the respondent had not filed an application to set aside the award in Stockholm
Neither Art. V NYC nor Section 1061 German Code of Civil Procedure contain a reservation of the assertion of foreign legal remedies against the arbitral award. Therefore, it is not decisive that the respondent did not apply to set aside the award at the place of arbitration. This is in line with established German case law.
Raising the objection that there is no valid arbitration agreement only at the enforcement stage is an inadmissible exercise of rights
For arbitration proceedings seated in Germany, Section 1040 para. 2 German Code of Civil Procedure provides that the objection of lack of jurisdiction of the arbitral tribunal must be raised at the latest with the statement of defense. Otherwise, the jurisdiction of the arbitral tribunal is established by way of preclusion. The state court is bound to that result.
According to the OLG Stuttgart, the same applies for arbitration proceeding seated abroad, although the NYC does not contain a similar provision on preclusion. However, in the court’s view, also the NYC recognizes the objection of the inadmissible exercise of rights due to contradictory conduct (venire contra factum proprium). This principle applies if the respondent does not object at all to the lack of jurisdiction of the arbitral tribunal in the arbitral proceedings, but raises this objection at the enforcement stage only. If respondent were not precluded with his jurisdictional arguments, he would be virtually invited to initially waive a jurisdictional objection in the hope that the arbitral tribunal would dismiss the arbitration claim for other reasons, in particular as unfounded.
The same principle applies insofar as the lack of the written form is at issue. In holding this, the OLG Stuttgart deviates from a decision of the Higher Regional Court of Frankfurt in 2006 which had held that preclusion would not be possible in that regard. The OLG Stuttgart, however, relies on a decision by the German Supreme Court in 2010. According to that, the more-favorable-right-provision of Art. VII para. 1 NYC permits the application of Section 1031 para. 2, 3 of the German Code of Civil Procedure which contains less stringent formal requirements compared to Art. II para. 2 NYC. According to the OLG Stuttgart, this means that by way of the more-favorable-right-provision, Section 1031 para. 6 of the German Code of Civil Procedure applies as well. The latter provides that the lack of form is cured by the submission to the arbitral proceedings on the merits. This is justified because a party who does not object to the jurisdiction of the arbitral tribunal signals that it accepts the arbitration agreement, which may be lacking in form. Therefore, the party no longer needs to be protected by the warning function of Art. II para. 2 NYC.
Disputing the conclusion of the consultancy agreement is no jurisdictional objection
The respondent took the view that it had objected to the jurisdiction before the arbitral tribunal. Yet, the OLG Stuttgart rejected this argument.
It was undisputed that the respondent had submitted in the arbitral proceedings that no consultancy agreement had been concluded. However, in the OLG Stuttgart’s view, this does not mean that the respondent had objected to the arbitral tribunal’s jurisdiction. This is because the objection to jurisdiction concerns the question of whether the arbitral tribunal is authorized to make a final decision on whether a consultancy agreement and an arbitration agreement were agreed while the dispute regarding the conclusion of such an agreement concerns the substantive justification of the asserted claim. Against this background, the OLG Stuttgart found that the respondent had not expressed with sufficient clarity that he intended to prevent a decision of the arbitral tribunal on the merits. On the contrary, the respondent had not indicated in any way that he rejected a decision on the merits by the arbitral tribunal. Therefore, objecting to the jurisdiction of the arbitral tribunal at the enforcement stage constitutes contradictory behavior.
Oral hearing required only when there is a likelihood that grounds for refusal can successfully be asserted
Finally, the OLG Stuttgart decided that it was not required to hold an oral hearing. According to the German Code of Civil Procedure, an oral hearing has to be held if, in the proceedings on recognition and enforcement, grounds for denying recognition come into consideration. In the OLG Stuttgart’s view, this is only true when there is at least a certain probability that a reason for refusal can be successfully asserted in an oral hearing or if there is a reason for refusal which has to be taken into consideration ex officio. Therefore, an oral hearing is not required if it follows already from the respondent’s reasoning that his assertions will not be successful from a legal point of view.
Conclusion
The decision is to be welcomed. If the respondent were permitted to invoke the inadmissibility of the arbitral proceedings only at the enforcement stage, then the respondent could first wait and see whether he obtains a favorable decision on the merits before the arbitral tribunal. If this is not successful, the respondent could demand that the arbitral award be set aside or that recognition be refused due to the lack of an arbitration agreement. Thus, the respondent would decide on whether he accepts the arbitral tribunal’s jurisdiction only when he knows what the tribunal decides on the merits. This would give the respondent an unjustified advantage.
