Dissenting opinions are common practice in many jurisdictions, particularly common law jurisdictions. But there is no clear-cut divide between common law and civil law. In some civil law jurisdictions, arbitration law expressly provides for the possibility of dissenting opinions.(1) However, Germany is among the majority of civil law jurisdictions whose laws do not have an express provision on the admissibility of dissenting opinions in arbitration proceedings. Because dissenting opinions by German judges (except Federal Constitutional Court judges) are prohibited as a violation of the secrecy of deliberations principle, the admissibility of dissenting opinions in arbitration proceedings seated in Germany is controversial. Critical voices argue that the disclosure of a dissenting opinion to the parties violates the secrecy of deliberations principle that also applies to arbitral tribunals.
For the first time, a German court has now articulated a view on the admissibility of dissenting opinions in domestic arbitration proceedings. In a recently published decision, the Frankfurt am Main Higher Regional Court announced in an obiter dictum that there are good grounds to argue that the disclosure of a dissenting opinion to the parties is inadmissible in domestic arbitration proceedings.(2) In the court's opinion, the disclosure of a dissenting opinion to the parties violates the secrecy of deliberations principle and may justify the setting aside of the arbitral award pursuant to Section 1059(2)(2 lit b) of the Code of Civil procedure (ZPO) due to a violation of procedural public policy.
Although the disclosure of a dissenting opinion to the parties arguably cannot justify the setting aside of an arbitral award, the disclosure of a dissenting opinion does violate the secrecy of deliberations principle and is, in most cases, an unhelpful practice which should be prevented.
Admissibility of dissenting opinions under German law
German arbitration law contains no provisions on the admissibility of dissenting opinions. However, it is well recognised that the secrecy of deliberations principle provided for in Section 43 of the Judges Act, which seeks to safeguard the impartiality and independence of judges, also applies to arbitrators.
Section 43 of the act stipulates that a judge must remain silent on the course of the deliberations and the voting. Deliberations and voting are internal matters of the court. Neither the content of the deliberations nor the voting behaviour of the individual judges may be made public. In principle, therefore, it may not be disclosed, neither in the reasoning of the decision nor in any other way, whether and, if so, which differences of opinion existed and with what number of votes a decision was taken.
Conflict between arbitrator's dissenting opinion and secrecy of deliberations principle
Disclosure of a dissenting opinion to the parties violates the secrecy of deliberations principle, as this principle prohibits the disclosure of the internal voting behaviour of the arbitral tribunal members.
The disclosure of a dissenting opinion by the minority arbitrator should be considered inadmissible even if the other arbitrators or the parties have consented to the disclosure. Any contrary theory is based on the premise that proceedings may dispense with the secrecy of deliberations principle. However, an independent decision of an arbitral tribunal is guaranteed only if the secrecy of the deliberations is preserved, so as to ensure that external influences cannot affect the arbitral tribunal's decision. Against this background, the Frankfurt am Main Higher Regional Court concluded that the secrecy of deliberations principle is not at the parties' disposal, given its importance for protecting arbitrators' independence and impartiality.
Legal consequences of violating secrecy of deliberations principle
A finding that the secrecy of deliberations principle has been violated inevitably raises the question of the legal consequences of such a breach. There are different views on whether the disclosure of a dissenting opinion may justify the setting aside of the arbitral award and, if so, according to which provision.
No ground for setting aside due to risk of abuse
Some commentators argue that the disclosure of dissenting opinions should not qualify as a basis for setting aside an arbitral award because this may encourage 'guerrilla' arbitrators to express their opinion and thus put the 'sharp sword' of annulment in the hands of the unsuccessful party. This argument is, in principle, correct. Accepting the disclosure of a dissenting opinion as a ground for setting aside an arbitral award would make it considerably easier for any bad-faith arbitrator to create a basis for a setting-aside procedure. Still, this argument must nonetheless be disregarded. The question of whether a certain behaviour constitutes a ground for setting aside cannot be decided based on whether the legal consequence is desired, but must be answered solely on the basis of the grounds for setting aside established by the legislature.
Ground for setting aside pursuant to Section 1059(2)(1 lit d) of ZPO (violation of procedural rules due to violation of consulting secrecy)
While the disclosure of a dissenting opinion to the parties violates the secrecy of deliberations principle, as set out above, this violation of the procedural rules does not justify the setting aside of an award pursuant to Section 1059(2)(1 lit d) of the ZPO. A violation of the procedural rules pursuant to this provision constitutes a ground for setting aside only if "it is to be assumed that [the violation] has had an effect on the arbitration award" – namely, there must be a possibility that a different decision may have been taken without the violation of the procedural rules.
However, in the case of the publication of a dissenting opinion, such an effect on the arbitral award is ruled out. Only the disclosure of the dissenting opinion to the parties violates the secrecy of deliberations principle. Crucially, such disclosure occurs only after the arbitrators have rendered the award. It is excluded that a subsequent violation of a procedural rule may possibly have had any effect on the award.
Ground for setting aside pursuant to Section 1059 (2)(2 lit b) of ZPO (violation of procedural public policy)
The Frankfurt am Main Higher Regional Court pursued a different approach by arguing that the disclosure of a dissenting opinion violates procedural public policy. The court stated that:
[I]n the opinion of the Senate, there is a strong argument that the disclosure of a dissenting opinion is inadmissible in domestic arbitral proceedings, even taking into account the considerations with which the legislator refrained from a regulation in this respect..., and it violates the principle of secrecy of deliberations applicable to domestic arbitral tribunals... The special importance of the principle of secrecy of deliberations for the protection of the independence and impartiality of the arbitrators ought also suggest that the principle of secrecy of deliberation, should – even after final deliberations and the rendering of the award – not be put at the disposal of the parties and/or the arbitrators and should be considered as part of the procedural ordre public.
It is questionable whether these arguments will convince other courts and, ultimately, the Federal Supreme Court. Setting aside an award for a breach of public policy presupposes that the award's recognition and enforcement would lead to a result which is contrary to public policy. That is the case where the decision is manifestly incompatible with fundamental principles of German law – in other words, where the award infringes a rule governing the foundations of state or economic life or is an intolerable contradiction of German notions of justice, it must infringe the fundamental principles of the law.
The decision in an arbitral award will not contravene public policy purely because the dissenting opinion is disclosed to the parties. Irrespective of whether the secrecy of the deliberations is to be regarded as part of procedural public policy, a violation of public policy is ruled out because it is merely the disclosure of the dissenting opinion – not the arbitral award itself – which violates this principle. This cannot necessarily justify the assumption that the arbitral award is contrary to public policy.
Recommendations for practitioners
Regardless of whether the obiter dictum of the Frankfurt am Main Higher Regional Court is convincing, the decision has increased the risk that a dissenting opinion may lead to the setting aside of a German arbitral award. In German arbitral proceedings, arbitral institutions should therefore consider refraining from submitting a dissenting opinion to the parties to avoid:
- infringing the essential secrecy of deliberations principle;
- becoming an accessory to the unlawful conduct of the dissenting arbitrator; and
- any risk that the arbitral award may be set aside.
Likewise, even in the case of foreign arbitral awards, arbitral institutions should consider refraining from submitting a dissenting opinion to the parties. An effective and enforceable arbitral award should not be jeopardised by extraneous motives. A dissenting opinion is in potential conflict with the impartiality principle and the mere possibility of issuing it may put a party-appointed arbitrator under pressure to argue in the interest of the party who appointed them and disclose this support as a means of loyalty. However, no arbitrator should have to fear being pilloried for an undesirable opinion. Some arbitrators may even use the dissenting opinion to provide the unsuccessful party with grounds for setting-aside proceedings. If this possibility is ruled out from the outset because the dissenting opinion will not be submitted to the parties, the chances of party-appointed arbitrators acting impartially and independently, as required by their office, will increase significantly.
The disclosure of a dissenting opinion to the parties is not a ground for setting aside but, in case of arbitration proceedings seated in Germany, it is a violation of the procedural rules. The disclosure of a dissenting opinion to the parties violates the secrecy of deliberations principle applicable to German arbitral proceedings because it discloses the arbitral tribunal's internal deliberations.
In foreign arbitral proceedings, the German secrecy of advice principle does not apply and, accordingly, does not prevent the disclosure of a dissenting opinion to the parties. Nevertheless, even in this case, the disclosure of a dissenting opinion is mostly counterproductive because:
- it increases the risk of setting aside the arbitral award per se, irrespective of its admissibility under the applicable law of the place of arbitration, by encouraging the unsuccessful party to initiate the setting aside of the arbitral award; and
- dissenting opinions provide a platform for partiality.
Arbitral institutions should therefore consider refraining from submitting a dissenting opinion to the parties in general.
While some do not agree that disclosing a dissenting opinion to the parties can justify the setting aside of an arbitral award, it can be argued that disclosing a dissenting opinion violates the secrecy of deliberations principle and is, in most cases, an unhelpful practice which should be prevented.
Endnotes
(1) For examples, please see M Arroyo, Dealing with Dissenting Opinions in the Award: Some Options for the Tribunal and Sheppard and Kapeliuk-Klinger, "Dissents in International Arbitration" in Tony Cole, The Roles of Psychology in International Arbitration.
(2) Frankfurt am Main Higher Regional Court, decision dated 16 January 2020 (26 Sch 14/18).
An earlier version of this article was first published in SchiedsVZ 2020.
