BayObLG, order of 16 June 2026 – 101 Sch 171/25 e
In an order of 16 June 2026, the Bavarian Highest Regional Court (Bayerisches Oberstes Landesgericht, BayObLG) held that a dispute between two German companies was not subject to arbitration, despite an arbitral tribunal’s prior interim decision affirming its own jurisdiction. The Court found that the party relying on the arbitration clause had not established a sufficiently clear and form-valid arbitration agreement under German law.
The decision is of practical relevance for arbitration clauses in multilingual contracts, particularly where no language version is given priority and the wording differs materially between the versions. It also confirms that, in proceedings reviewing an arbitral tribunal’s decision on jurisdiction, doubts about the existence of an arbitration agreement are borne by the party invoking arbitration.
Background of the dispute
The applicant was the respondent in an arbitration administered by the Arbitration Court at the German Chamber of Industry and Commerce. The respondent in the court proceedings had initiated the arbitration on the basis of a subcontract dated 11 September 2024. The subcontract concerned project construction works connected with fibre-optic drilling works. The applicant was a wholly owned subsidiary of a Spanish company; both contracting parties themselves were German companies. The negotiations were conducted in English, while the contract was signed in German and Spanish.
The relevant clause, § 21 of the contract, appeared in two language versions. The Spanish heading referred to “Mediation and/or Arbitration” and the Spanish text provided for “arbitraje” before the Chamber of Commerce of Munich. The German version, however, was headed “Schlichtungs- und/oder Schiedsklausel” and stated only that, in the event of disputes, the parties undertook to conduct a conciliation procedure before the Munich Chamber of Commerce. The contract did not contain a clause specifying which language version should prevail.
The arbitral tribunal considered § 21 to be a valid arbitration agreement. It relied in particular on the Spanish wording, the applicant’s Spanish parent company, the bilingual structure of the contract, and its view that the Spanish version was the original text later translated into German. The tribunal also took the view that the parties had shared an intention to arbitrate.
The applicant challenged that interim decision before the state court and sought a declaration that the arbitral tribunal lacked jurisdiction. It argued that the parties had agreed only to a conciliation or mediation procedure as a preliminary step before recourse to the ordinary courts, not to arbitration.
Procedural admissibility under § 1040 ZPO
The application was brought under § 1040(3) sentence 2 ZPO. This provision allows a party to request a state court decision within one month after receiving written notice of an arbitral tribunal’s interim ruling affirming its jurisdiction. The German provision corresponds in substance to the court-control mechanism in Article 16(3) UNCITRAL Model Law. The UNCITRAL Model Law was adopted in 1985 and amended in 2006; Article 16 contains the principle that the arbitral tribunal may rule on its own jurisdiction, subject to limited court review. (UNCITRAL)
The BayObLG held that the application was admissible although it had first been filed with the Higher Regional Court of Munich, which was not the competent court. The application was filed there on 3 December 2025, within one month after the arbitral tribunal’s interim decision of 3 November 2025. The case was then transferred to the BayObLG.
The Court characterised the one-month period under § 1040(3) sentence 2 ZPO (= Art. 16(3) UNCITRAL Model Law) not as an appeal period, but as an exclusion period. However, such a period may also be preserved by filing the application in time with a court lacking jurisdiction, provided the matter is then transferred or forwarded to the competent court. The purpose of § 1040 ZPO is to clarify jurisdictional issues at an early stage of the arbitral proceedings; timely filing with the wrong court still served that function.
The applicable German arbitration provisions
The Court’s reasoning turned primarily on § 1029(1) ZPO. This provision defines an arbitration agreement as an agreement by the parties to submit all or certain disputes arising between them in respect of a defined legal relationship, whether contractual or non-contractual, to decision by an arbitral tribunal. The provision corresponds to the definition of an arbitration agreement in Article 7 UNCITRAL Model Law.
Accordingly, the relevant statutory formulation may be summarised as follows:
§ 1029(1) ZPO (= Art. 7 UNCITRAL Model Law):
An arbitration agreement is an agreement by the parties to submit disputes arising from a defined legal relationship to an arbitral tribunal.
The Court also referred to § 1032 ZPO, particularly in connection with the burden of pleading and proof in cases concerning the existence or validity of an arbitration agreement. § 1032(1) ZPO (= Art. 8(1) UNCITRAL Model Law) concerns the plea that an action before a state court is inadmissible because the dispute is subject to an arbitration agreement. § 1032(2) ZPO allows a party to apply to the court for a determination on the admissibility or inadmissibility of arbitral proceedings before the tribunal is constituted; this mechanism has no exact counterpart in the UNCITRAL Model Law.
The Court further mentioned the later enforcement and setting-aside context. While not directly deciding enforcement, it stated that the consequences of a missed application under § 1040(3) sentence 2 ZPO may extend to later setting-aside and enforcement proceedings. In this respect, the relevant provisions include § 1059 ZPO (= Art. 34 UNCITRAL Model Law) on setting aside an arbitral award and §§ 1060, 1061 ZPO, which govern enforcement of domestic and foreign arbitral awards. Section 1061 ZPO operates by reference to the New York Convention rather than by direct implementation of the Model Law; the Model Law’s recognition and enforcement provisions are found in Articles 35 and 36 UNCITRAL Model Law. (United Nations Digital Library System)
Burden of pleading and proof
The BayObLG held that the party relying on the arbitration agreement bears the burden of pleading and proof for the valid conclusion of a form-valid arbitration agreement. The Court considered this rule appropriate not only in proceedings under § 1032 ZPO, but also in proceedings under § 1040(3) sentence 2 ZPO (= Art. 16(3) UNCITRAL Model Law).
The Court linked this burden allocation to the constitutional guarantee of access to state courts. Since arbitration entails a waiver of the ordinary court system, the free will of the parties to submit disputes to a private arbitral tribunal must be clearly established. If doubts remain as to the valid conclusion of an arbitration agreement, those doubts are borne by the party asserting the arbitration agreement, irrespective of the procedural roles of claimant and respondent.
This was decisive in the case. The respondent in the court proceedings, although given an opportunity to comment, did not substantiate before the BayObLG that both parties had agreed to arbitration at the time of conclusion of the subcontract.
Interpretation of the bilingual clause
The Court applied the general German rules on contract interpretation, §§ 133, 157 BGB. These provisions require the court to ascertain the parties’ true intention, starting from the wording of the declaration and taking into account the objectively declared intention, the purpose of the declaration, the parties’ interests, and the surrounding circumstances. Declarations requiring receipt are interpreted as they had to be understood by the recipient in good faith and according to ordinary usage.
On that basis, the German version did not show a clear agreement to arbitrate. Although the heading referred to “conciliation and/or arbitration clause”, the operative wording merely obliged the parties to conduct a conciliation procedure before the Munich Chamber of Commerce. The Court therefore considered that the German text did not express a waiver of the ordinary courts and submission to a final decision by an arbitral tribunal.
The Spanish text did not cure that uncertainty. The Court left open whether the Spanish term “arbitraje” referred only to arbitration, as the arbitral tribunal had assumed. Even if that were correct, the result would be two conflicting language versions. Since the contract contained no priority clause, and since no separate agreement giving precedence to the Spanish version had been pleaded or established, the Court refused to treat the Spanish text as controlling.
The surrounding circumstances did not support a priority of the Spanish version either. The applicant’s status as a subsidiary of a Spanish company was insufficient. Nor would it have been enough, in the Court’s view, that the Spanish parent company had prepared the original version and that the German text was a translation, because no sufficient basis showed that these circumstances were recognisable to the other German contracting party. The Court also noted that the parties signed the contract under the German version, not under the Spanish version.
The Court therefore concluded that the overall circumstances did not permit the inference that the parties had agreed to arbitration contrary to the wording of the German version.
No established common intention to arbitrate
The arbitral tribunal had relied on the view that both parties had shared the same understanding that § 21 provided for arbitration. The BayObLG did not accept that finding for the purposes of court review.
The applicant asserted that there had been no common intention to agree on arbitration. It also stated that it had not been able to respond in the arbitral proceedings to an email of 4 August 2025 in which the other side had allegedly stated that the common intention had been to arbitrate, because it only became aware of that email through the tribunal’s interim decision. The respondent did not contradict this submission in the state-court proceedings.
Accordingly, the Court held that a form-valid arbitration agreement had not been established. It declared that the state courts, not the arbitration court, had jurisdiction over the claims asserted in the arbitration.
No oral hearing required
The BayObLG also held that no oral hearing was necessary. The tribunal’s interim decision on jurisdiction was not an arbitral award within the meaning of § 1054 ZPO. Therefore, § 1063(2) ZPO, which applies to certain proceedings concerning arbitral awards, did not require an oral hearing. The facts relevant to the jurisdictional issue were apparent from the file, and the respondent had been given an opportunity to comment.