Section 110(1) of the German Code of Civil Procedure provides that plaintiffs who do not have their habitual place of abode in a Member State of the European Union (“EU”) or in a signatory state of the Agreement on the European Economic Area (“EEA”) shall provide security deposit for the costs of the proceedings should the defendant so demand; the exceptions are regulated in Section 110(2) of the German Code of Civil Procedure. Section 110 of the German Code of Civil Procedure aims to protect defendants from the risk of unrecoverable litigation costs. However, the interplay between domestic law and international treaties can significantly alter this requirement. The decision of the Higher Regional Court Cologne dated 17 February 2025 (Case No. 19 Sch 24/24) provides a clear illustration of this interaction.
Factual Background
The plaintiff, a limited liability company domiciled in Belarus, sought recognition of an arbitral award issued by the International Arbitration Court of the Belarusian Chamber of Commerce and Industry on 30 April 2024. In response, the defendant requested that the applicant be ordered to provide security for costs pursuant to Section 110 of the German Code of Civil Procedure because the applicant was domiciled outside the EU/EEA and therefore subject to the statutory requirement. The Higher Regional Court Cologne dismissed this request.
Legal Framework
Section 110(1) German Code of Civil Procedure stipulates that plaintiffs without habitual residence in an EU or EEA member state must provide security for costs upon the respondent’s request. Section 110 German Code of Civil Procedure applies equally in proceedings for the recognition of foreign arbitral awards as confirmed by the German Federal Court of Justice in its decision of 12 January 2023 (Case No. I ZB 33/22).
Section 110(2) of the German Code of Civil Procedure provides exceptions for the security deposit for costs requirement, for example where international treaties impose an obligation to waive such requirements. Germany and Belarus are both contracting states to the Hague Convention on Civil Procedure, an international treaty within the meaning of Section 110(2) Nos. 1 and 2 German Code of Civil Procedure . Article 17 of this Convention obligates the Federal Republic of Germany to refrain from demanding security for costs from Belarusian nationals.
Court’s Analysis
The Higher Regional Court Cologne rejected the request for security for costs.
The court emphasized that the obligation of not demanding security for costs imposed by Hague Convention on Civil Procedure remains binding even in light of political sanctions or practical difficulties in enforcing cost reimbursement claims. The decisive factor is the existence of the international obligation, not the actual enforceability of cost claims. Section 110(2) No. 1 of the German Code of Civil Procedure does not refer to an actual possibility of enforcing claims for reimbursement of costs, but rather to the international law obligation of the Federal Republic of Germany to waive the provision of security for costs.
The decision is final and not subject to appeal pursuant to Section 1065(1) sentence 2 German Code of Civil Procedure.
Practical Implications
This ruling underscores the primacy of international treaties over domestic procedural rules and highlights the importance of treaty-based exemptions in cross-border litigation. For parties from contracting states, the decision ensures that the recognition of arbitral awards in Germany is not hindered by additional political barriers. Further, the decision is consistent with the case law of the German Federal Court of Justice, which ruled that the provisions of Sections 110 et seq. of the German Code of Civil Procedure apply mutatis mutandis in proceedings for the declaration of enforceability of domestic or foreign arbitral awards.
