New DIS Arbitration Rules enter into force today
Today, the new Arbitration Rules of the German Institution of Arbitration [Deutsche Institution für Schiedsgerichtsbarkeit, DIS] (DIS- Rules 2018) enter into force. They will apply to all arbitration actions filed with the DIS as of 1 March 2018. The revised regulations therefore also apply to proceedings instigated on grounds of DIS arbitration clauses that were agreed long before the actual reform or even first considerations of reforming the regulations.
A major goal of the reform is to increase procedural efficiency. The provisions existing to date have been less than efficient – especially in comparison to the ICC arbitration Rules which have already been modernised on several occasions, especially following the reform of the ICC Rules in the spring of 2017. The general requirement of conducting proceedings efficiently (Art. 27.1) has now been specified more concretely in the DIS Rules. For example, the Respondent must now name its arbitrator within 21 days of the transmission of the arbitration action as opposed to within 30 days, as before (Art. 7.1). The proceedings are being tightened further by regulating for the first time a deadline for responding to the action within 45 days (at most 75 days) of the transmission of the arbitration action (Art. 7.2). According to the former regulations the arbitral tribunal could set a deadline for the response. However, naturally it could only do so after it had been constituted. A conference on the proceedings must now be held within 21 days of constituting the arbitral tribunal (Art. 27.2), in which the efficient structuring of the proceedings is discussed. Hence, even before the proceedings have begun, all of the parties must actively work towards an efficient execution of the proceedings. For the arbitrators themselves, this now also means that they generally have to draw up the arbitral award within three months of the last oral hearing or the last admitted brief (Art. 37.1). A further factor increasing efficiency is, finally, Art. 4, pursuant to which – with the exception of the claim, counterclaim and extension of the claim – briefs now have to be exclusively transmitted electronically.
The rules on a more efficient conducting of proceedings are rounded off with sanctions for inefficiently conducted proceedings. The costs form the basis for these sanctions. A key factor of the new costs regulations is Art. 33.3, pursuant to which the defeated party no longer automatically bears all procedural costs – as was still envisaged in the DISRules 1998. The arbitral tribunal can now decide on the costs “at its discretion” and take all circumstances of the case into consideration in this respect. The outcome of the proceedings is in this case just one of the circumstances to be considered; a further factor is the efficiency of the parties’ execution of the proceedings. If one party causes procedural delays, it can thus expect to bear a greater share of the costs. Additionally, the DIS Rules 2018 envisages possible sanctions for inefficient conduct on the part of the arbitrators: the DIS Arbitration Council (see below) can reduce the arbitrators’ fee “at its discretion” if they delay the issue of the arbitral award (Art. 37). Also in the event of the premature end of the arbitral proceedings, for example if the parties come to an agreement, the DIS Arbitration Council can in future consider how efficiently the arbitrators conducted the proceedings and can in this case also stipulate the arbitrators’ fees “at its discretion” (Art. 34.4).
In the course of the reform, the DIS has created a new body – the DIS Arbitration Council [DIS Rat für Schiedsgerichtsbarkeit]. Besides the aforesaid decision on a reduction of the arbitrators’ fees on grounds of a delayed arbitral award, the DIS Arbitration Council assumes tasks which thus far have primarily been undertaken by the arbitrators themselves. This includes, for example, the decision on the rejection and removal from office of arbitrators (Art. 15.4 and Art. 16.2), which arbitrators may no longer decide “on their own account”. The DIS itself has also gained further-reaching competences through the reform. For example, it now administers the cost securities furnished by the parties (Art. 34 et seqq.). Furthermore, in future arbitrators must transmit the arbitral award to the DIS in advance for its inspection. The DIS can draw the arbitral tribunal’s attention to any formal deficiencies in the arbitral award and make the arbitral tribunal non-binding amendment suggestions.
A further significant reform is the rules on multi-party and multi-contract proceedings. These make it easier for the parties to include third parties in the arbitration proceedings. On the whole, the DIS is herewith opening itself up to more complex and multi-layered disputes.
Through the reform, the DIS Rules have been modernised and brought in line with the current (international) requirements for arbitration codes. Arbitration proceedings are expected to offer quick and efficient solutions and thus be a real alternative to state court proceedings. The new DIS Rules can significantly contribute towards this.