Case Summary and Background

The dispute decided by BGH on 6 November 2025 (case ref: I ZB 33/25) arose from a complex international supply relationship involving ship engines. In 2007, a German manufacturer sold four ship engines to an Australian company, I. Ltd., which installed them in the vessel “E.”. Over time, the ship changed hands and was managed by a Danish charterer, M. A/S, who, together with the vessel owner and a mortgagee, entered into various agreements including extended warranty and service contracts covering the engines. Disputes arose after two of the engines suffered major mechanical failures in 2017 and 2018, causing considerable damage. The losses were paid by a Norwegian insurer, who then received assignments of claims from M. A/S, the vessel’s owner, and the mortgagee.

The Norwegian insurer (here: “respondent” for the Augsburg litigation) initiated state court proceedings before the Regional Court of Augsburg, Germany, against the German manufacturer for over €8.6 million in damages. The manufacturer (here: “applicant” in the BGH proceedings) raised an arbitration objection—pointing to arbitration clauses found in contracts along the supply and maintenance chain, some governed by English law, others by Danish law, and covering different (sometimes assigned) claims. As the state court proceedings were stayed awaiting the outcome on jurisdiction, the applicant sought an early, authoritative clarification from German courts under § 1032(2) ZPO—requesting a determination that only an arbitral tribunal had jurisdiction for (some or all of) the asserted claims.

Key Findings of the German Federal Court

1. Admissibility of an Application under Section 1032(2) ZPO

The Court confirmed that an application for a declaration on arbitral jurisdiction under Section 1032(2) ZPO is admissible even if:

  1. state court proceedings on the merits are already pending, and
  2. the party has already raised the arbitration objection under Section 1032(1) ZPO.

Neither the mere pendency of parallel proceedings nor a substantial time lapse before the application (in this case, nearly two years) automatically constitutes an abuse of process. Only further circumstances could lead to such a finding I_ZB__33-25+2 .

2. Scope of Judicial Review: The Concrete Dispute

The BGH emphasized that state courts must not assess an arbitration clause in the abstract. Instead, the court must determine whether the specific subject matter of the dispute (Streitgegenstand)—defined by the detailed claims and the factual as well as legal grounds relied upon—falls within the scope of the arbitration agreement. This analysis is essential for establishing the scope of lis pendens, res judicata, and judicial authority in the dispute.

In the present case, the Federal Court found that the lower court (Kammergericht) failed properly to distinguish between claims based on the original rights of the Norwegian insurer (i.e. claims directly acquired from M. A/S) and claims assigned from third parties (e.g. the ship owner or mortgagee), each of which might be subject to different arbitration agreements or none at all. This lack of differentiation prevented a conclusive determination as to whether the disputed claims were covered by an arbitration agreement I_ZB__33-25+2 .

3. Determination of Foreign Law

Where the content or interpretation of foreign law is contested and central to resolving arbitral jurisdiction, German courts must generally obtain expert evidence (such as a legal opinion from a qualified expert in that jurisdiction). The court may only dispense with this requirement if it possesses demonstrable, explicit expertise in the relevant field of foreign law and sets this out in its reasoning. In this case, the BGH found that the lower court had relied too heavily on its own interpretation without sufficient foundation and failed to adequately address conflicting expert submissions regarding Danish and English law on the scope and inclusion of arbitration agreements I_ZB__33-25+4 .

Practical Implications

  • The decision underscores that the precise subject matter of the dispute must be scrutinized to determine arbitration coverage, reinforcing the necessity for careful pleading and jurisdictional analysis.
  • An application under Section 1032(2) ZPO is a robust and legitimate instrument for securing early, authoritative jurisdictional rulings; courts will not generally treat delays or parallel state proceedings as abusive per se.
  • Where foreign substantive law is contested, state courts are expected to obtain expert evidence unless they clearly possess and explain their own expertise. Failure to do so may constitute a serious procedural error.

Why This Matters

State court decisions on general matters tend to take a long, long time, which can be frustrating. If an arbitration defence is on the table, the defendant can nevertheless try to drag on the matter for months or even years. By contrast, decisions in arbitration matters start at the Court of Appeal (OLG) level and tend to be resolved quicker. So, an application under sec. 1032 ZPO can be a way to bypass the bottleneck which the state courts have become, at least if there is a valid arbitration clause.