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Balancing Judicial Oversight and Arbitral Independence: Germany’s Top Court Annuls DIS Award Against AstraZeneca
Germany’s Federal Court of Justice has confirmed the setting aside of a US$46.4 million arbitral award issued against AstraZeneca under the rules of the German Arbitration Institute (DIS).
The judgment illustrates the narrow but meaningful scope of court oversight in arbitration, while at the same time preserving the principle that arbitral tribunals operate independently from national courts.
Timeline
The dispute originated from a post-acquisition disagreement under a share purchase agreement, with the sellers alleging that AstraZeneca had failed to pay earn-out sums linked to the acquired company’s financial performance.
In December 2023, a DIS tribunal ordered AstraZeneca to pay approximately US$46.4 million, well below the roughly US$140 million claimed, yet still a significant award.
AstraZeneca challenged the award before the Bavarian Higher Regional Court (Oberlandesgericht), arguing that serious legal errors had occurred during the arbitration.
The court ultimately annulled the award but declined AstraZeneca’s request to prevent the matter from being referred back to a newly constituted tribunal.
Grounds for the decision
The court concluded that the award contained deficiencies serious enough to justify intervention under Sections 1059 and 1060 of the German Code of Civil Procedure (ZPO), which reflect the standards of the UNCITRAL Model Law.
However, it refused to bar further arbitral proceedings, allowing the dispute to return to arbitration rather than ending it altogether.
