The decision of an arbitral tribunal, the so-called arbitral award, must be signed personally and personally by all arbitrators involved. This was decided by a civil senate of the Frankfurt Higher Regional Court (OLG) last week. As stated in the decision published on Monday, otherwise a hindrance note would have to make it clear to all parties involved why the arbitrator was actually unable to attend.
However, because the third signature was completely missing and no note was visible, the OLG declared the entire arbitral award invalid. The lawsuit was about claims for damages after the sale of business units in connection with the Monsanto takeover, the court said.
In August 2022, the three arbitrators had reached a verdict and dismissed the original claim. Only two arbitrators signed the arbitral award – below the pre-printed, third name was the addition "signature could not be obtained" – a signature could not be obtained. The unsuccessful arbitrator objected to this and demanded that the Higher Regional Court be set aside or, in the alternative, that the invalidity be declared. The Civil Senate in Frankfurt recognized the lack of a signature. It ensures that the signatory assumes personal and legal responsibility and establishes the proper formation of the arbitral award.
Ineffective, but not repealed
However, because there is no hindrance notice, the arbitral award does not represent a final result of the arbitral tribunal in the opinion of the OLG. A repeal was therefore not possible, but the invalidity could be established.
Many companies prefer private arbitration courts for their dispute resolution. This applies in particular in cases of permanent commercial and supply contracts, in plant construction as well as after company acquisitions and mergers ("post-M&A"). Arbitration clauses are standard in company purchase agreements. Usually, law professors and business lawyers act as party representatives and arbitrators. (Az. 26 Sch14/22)