Germany: The level of scrutiny of awards applied by German courts - a reality check

Traditionally, when reviewing arbitral awards, German courts have intervened only in exceptional cases and honoured the fundamental principle that an award must not be reviewed on the merits (no révision au fond).

However, recent court decisions have prompted debate over whether, in the past few years, German courts have started to exercise their very limited powers to look at the substance of arbitral awards more extensively than they did before.

So, is there a discernible trend towards intensified scrutiny by German courts? Or is the impression of greater interference simply a result of publication or selection bias?

Setting the scene – the legal framework

German law provides that parties to arbitration may apply to the courts to set aside a domestic award or to resist the recognition and enforcement of a foreign award. These challenges may be brought on limited number of grounds, such as lack of tribunal jurisdiction and procedural irregularity.

The limited grounds relating to the substance of an award, on which German courts can set aside or refuse recognition and enforcement of an award can be broadly grouped into two categories:

1. violation of German public policy; and
2. violation of the right to be heard.

When considering challenges on these grounds, German courts must ensure that they do not violate the fundamental principle that an award generally must not be reviewed on the merits (no révision au fond).

Setting the scene – the available data

While the legal framework relevant to the setting aside of awards in Germany is well-defined, it is more difficult to understand how the courts apply that framework in practice. This is in large part due to the limited availability of publicly accessible data.

German courts are not required to publish all decisions. It is established practice that only decisions considered “worthy to be published” by the courts will be made public, and in practice only about 1–3% of court rulings become publicly available.

Typically, decisions which set aside a domestic award or refuse enforcement of a foreign award will be published, as such outcomes require detailed reasoning and contribute to the development of the law. By contrast, routine decisions affirming recognition and enforcement, as well as dismissals of set-aside applications are less often published.

This context must be considered when interpreting the available data, which may not always be representative of the true position taken by German courts.

Does the available data indicate a rise in the substantive review of arbitral awards?      

Professor Reinmar Wolff (University of Marburg) conducted the most comprehensive study of arbitration-related court decisions in Germany to date reviewing 573 court rulings issued between 2012 – 2016 involving set-aside and enforcement requests for domestic awards as well as requests for the enforcement of foreign awards. The study found that 11.11% of set-aside applications against domestic awards were successful. When looking at both domestic and foreign awards, only 4.19% of applications to set aside or refuse enforcement were successful. These figures provided a rare insight into the outcomes of arbitration-related court proceedings in Germany.

For the subsequent period (2017 – October 2025), statistics show that 1,496 applications concerning the setting aside or recognition and enforcement of arbitral awards were filed with German courts. However, only 178 court decisions (~11.8%) are publicly available from this time period. This highlights the difficulty of identifying trends based on data-driven analysis and underscores the need for caution when drawing conclusions from published cases alone.

Based on the 178 published decisions rendered between January 2017 and October 2025, we analysed how many applications were successful and to which extent German courts engaged with the substance of arbitral awards when reviewing them in set-aside or recognition and enforcement proceedings.

The data indicates that:

• The number of set-asides and refusals to recognise and enforce arbitral awards remains low, ranging between one and six per year.
• In 14 of the 178 decisions (7.8%) published over the past eight years, arbitral awards were set aside or refused enforcement as a result of grounds concerning the substance of the award, i.e., as opposed to a finding of non-arbitrability, lack of an arbitration agreement, irregularities during the constitution of the tribunal or other procedural defects not affecting the substance of the award.
• Since the largest part of the decisions on applications to set aside or refuse enforcement of an award remain unpublished and decisions on successful applications are typically published, it may be expected that the overall ratio of successful applications is much lower than it may appear from the publicly available data.

Why arbitral awards were set aside or refused enforcement?

We examined the reasoning of the 14 court decisions rendered between January 2017 and October 2025, in which an award was set aside or refused enforcement based on grounds concerning the substance of the award. Four of those cases are analysed below to illustrate the rare and exceptional circumstances in which courts have decided to set aside or refuse enforcement of an award for substantive reasons.

First substantive ground: Violation of public policy

German courts apply a strict and high threshold when assessing violations of public policy (ordre public). An arbitral award breaches public policy only if its recognition or enforcement leads to a result manifestly incompatible with essential principles of the German legal order, particularly where the award violates norms regulating the foundations of state or economic life or contradicts German justice notions in an unacceptable way.

Recent decisions highlight two areas – competition law and EU sanctions – which are qualified as ordre public fundamentals. In those domains, German courts will review arbitral awards on the merits to prevent enforcement of awards contradicting these foundational legal commitments. For example:

Federal Court of Justice, judgement of 27 September 2022 – KZB 75/21

The German Federal Court of Justice set aside an award in part that related to anti-competitive behaviour prohibited by German law. 

The Court held that arbitral awards are subject to unrestricted judicial review regarding compliance with German competition law, both in fact and in law. It also held that competition law provisions form part of Germany’s public policy and that their proper application must be ensured by state courts. Accordingly, a mere plausibility or limited review by state courts is insufficient.

Higher Regional Court of Frankfurt, judgement of 12 June 2025 – 26 Sch 12/24

The Higher Regional Court of Frankfurt held that a Russian arbitral award relating to a underlying contract and repayment obligation prohibited by EU sanctions was unenforceable on the basis that enforcement would violate the German international public policy. It ruled that the effect of certain EU sanctions was that even the repayment of advance payments under a sanctioned contract constitutes a prohibited performance, as it would amount to an indirect financial transfer to a Russian entity.

What does this mean in practice?

German courts will set aside or refuse enforcement of arbitral awards on public‑policy grounds only in exceptional circumstances to safeguard fundamental principles of German or EU law. By contrast, a mere misapplication or misinterpretation of the law resulting in an erroneous decision on the merits does not suffice. Courts have, for examples, held that rules on limitation periods and contributory negligence do not engage public policy.

Second substantive ground: Violation of the right to be heard

German courts set a high bar for establishing a breach of the right to be heard. This right entails that each party, with adequate notice and equal treatment, has a fair opportunity to present its case and to respond on decisive issues, and that the tribunal issues a reasoned award demonstrating that it has considered the parties’ key arguments. A breach requires that:

1. the arbitral tribunal has failed to engage with the essential core of a party’s submissions on a matter which is key to the case or has based its decision on an unanticipated ground without prior indication to the parties; and
2. the court cannot exclude the possibility that the decision would have been different had the tribunal considered the submission or provided the requisite indication and opportunity for the parties to respond.

What does this mean in practice?

German courts will set aside and refuse enforcement of awards for a violation of the right to be heard only where an arbitral tribunal has failed to engage with core submissions that could be decisive for the outcome of the proceedings. Tribunals are not required to address every point raised by the parties; it suffices that they consider and reflect the arguments material to their reasoning.

Consistent with this approach, German courts have held that non-compliance with an agreed procedure for expert appointment does not constitute a breach of the right to be heard, and that declining to take evidence on assertions assessed as immaterial to the decision does not establish such a breach. Courts have also found no violation where a tribunal declined to hear a proposed witness who – contrary to the parties’ agreed procedural rules – was neither accompanied by a written witness statement nor by a justified explanation for its absence.

Conclusion: Is substantive review on the rise?

Based on the available data, we do not see any traceable indication that German courts are scrutinising domestic or foreign arbitral awards more closely than they did before. A case-based analysis also confirms that set-aside or refusal to enforce based on substantive grounds remains the rare exception – notably where enforcement would breach fundamental principles, such as competition law or EU sanctions, or where core procedural guarantees, particularly the right to be heard, have been violated.

Since exceptional rulings will usually be published, these cases likely appear more prominent than they are, while routine recognitions and enforcements remain largely unreported.

This may provide comfort to parties arbitrating in Germany that German courts continue to respect the autonomy of arbitral tribunals while providing targeted safeguards to preserve the integrity of the arbitral process.