Introduction
The Highest Regional Court of Bavaria (“BayObLG”) has recently issued several decisions underscoring the court’s supportive stance toward recognition and enforcement of arbitral awards. Three of them have already been reported in Global Arbitration News (Reports of May 9, May16, and May 21, 2025).
In another ruling of 15 January 2025 (Case No. 102 Sch 250/23e), the BayObLG reaffirmed the high threshold required to deny recognition and enforcement of an arbitral award. It granted the partial enforcement of an award rendered by a sole arbitrator under the rules of the Vienna International Arbitral Centre (VIAC). In particular, the court evaluated objections raised by the respondent concerning due process and public policy. It held that to comply with German public policy it is not necessary for an arbitral tribunal to address explicitly each submission, argument or piece of evidence presented by the parties, as long as it deals with the essential core of the factual submissions on central issues.
Factual Background
The dispute had arisen from two contracts signed on April 1, 2021: a Sales Agreement and a Framework Marketing Services Agreement between a company from Bosnia and Herzegovina (the respondent in the arbitration and claimant in the enforcement proceedings) and two companies based in the UK and Germany respectively (both companies were claimants in the arbitration with the German company being respondent in the enforcement proceedings).
On November 16, 2023, the sole arbitrator dismissed the claims of the German and the UK companies, upheld the Bosnian’s company’s counterclaim, and awarded it €969,000 in damages plus interest, as well as €555,817.98 in arbitration costs. The Bosnian company then sought enforcement of these two parts of the award in Germany.
Apart from objections to the jurisdiction of the court and admissibility of the application, the respondent argued that enforcement would contravene German public policy, claiming that the sole arbitrator had violated respondent’s right to be heard. It alleged that the arbitrator overlooked key legal arguments, factual submissions, and witness evidence.
Decision of the Court
The BayObLG rejected the respondent’s objections, in particular holding that the allegations did not meet the standard required to establish a violation of the right to be heard.
The key findings can be summarized as follows:
1. Jurisdiction, Admissibility and Procedural Requirements
The court confirmed its jurisdiction under Sections 1025, 1061, and 1064 German Civil Procedure Code (Zivilprozessordnung, ZPO), as the arbitration took place abroad and the respondent is domiciled in Bavaria. The court also held that the enforcement request was admissible even though neither the original nor a certified copy of the award had been submitted. The court confirmed previous rulings, according to which the relevant provisions in Section 1064 ZPO do not constitute requirements for the admissibility of an enforcement request but provisions on the burden of proof. Yet, the existence of the award and its authenticity remained undisputed during the court proceedings.
Furthermore, the court confirmed that the procedural requirements for enforcement under German law and the New York Convention were met. It also clarified that the lack of a challenge to the award in Austria, the seat of arbitration, did not preclude the respondent from raising objections in the enforcement proceedings.
2. No Grounds for Refusal under the New York Convention
The respondent had raised several objections under Article V of the New York Convention, primarily alleging violations of due process (right to be heard) and public policy. The court rejected all of them.
The court reiterated a principle it had previously articulated (see Global Arbitration News, May 9, 2025): while compliance with public policy must be examined ex officio, the burden remains on the party alleging a violation to substantiate its claims adequately.
The central objection raised by the respondent was an alleged violation of the right to be heard, because the sole arbitrator allegedly failed to deal with all arguments, factual submissions, and witness evidence presented in the arbitration. However, the court found that the arbitrator had considered all essential arguments and evidence. The fact that the arbitrator did not explicitly address every piece of evidence or argument did not constitute a violation. The arbitrator’s reasoning was deemed sufficient and coherent. The court acknowledged that arbitral tribunals are obliged to consider the factual and legal arguments presented. However, it emphasized that a violation of the right to be heard can only be assumed if it is evident that the tribunal failed to fulfill this duty. The mere absence of explicit references to every submission or piece of evidence in the award does not, in itself, indicate such a failure. Only if an award omits the essential core of a factual submission on a central issue – without justification based on the tribunal’s legal position –a violation can be presumed. Not every factual allegation, legal argument, or piece of evidence qualifies as a “core submission.” Moreover, a substantive review of the award’s correctness would constitute an inadmissible révision au fond.
Applying these standards, the court found no indication that the right to be heard had been infringed.
Conclusion
Arbitral awards are often lengthy, partly due to arbitrators’ concerns that failure to address every argument or piece of evidence might jeopardize enforcement. The BayObLG’s decision should reassure arbitrators that such an overly exhaustive treatment of the parties’ submissions and evidence is not required.
The ruling can be seen as an encouragement to arbitrators for concise and focused awards. This approach allows tribunals to concentrate on matters of central importance, rather than being burdened by an assumed obligation to address peripheral or legally irrelevant content.
