THE AUTHOR:
Lars Harzmeier, Partner at Linklaters
Rupert Bellinghausen, Partner at Linklaters
Christian Rieß, Associate at Linklaters
Winning an arbitration does not always end the dispute. If the award is challenged because of an arbitrator’s conduct, the successful party may need to consider a damages claim against the arbitrator while defending the award.
In its decision of 30 July 2026, I ZB 6/26, the German Federal Court of Justice (“BGH”) confirmed that a party can serve a third-party notice on an arbitrator in German court proceedings to set aside an award or declare it enforceable. The notice can bind the arbitrator to relevant findings from those proceedings in a later damages action against the arbitrator. The arbitrator’s response may also affect whether the dispute can return to the same tribunal.
The Case
The Respondent in the arbitration sought to set aside the award on several grounds. It alleged that an arbitrator had failed to disclose his cooperation with a law firm that had advised the Claimant on matters relevant to the arbitration.
The Respondent had itself nominated the arbitrator but later challenged his impartiality before the Arbitration Council of the German Arbitration Institution (“DIS”). The arbitrator said he had not known about the firm’s advice. The Council rejected the challenge. In the set-aside proceedings at first instance, the Bavarian Highest Regional Court ordered witness evidence from the arbitrator and lawyers at the firm to establish whether he had known about the advice.
The Claimant then filed a third-party notice. It argued that it would have a damages claim against the arbitrator if the court accepted the Respondent’s non-disclosure argument and set aside the award. The notice was intended to make relevant findings from the state court proceedings binding in a subsequent damages action.
The court refused service. It referred to Section 72(2) of the German Code of Civil Procedure (“ZPO”), which excludes notices to the court hearing the case and its appointed experts, and applied it to arbitrators by analogy. Its main concern was that if the arbitrator intervened in support of a party after receiving the notice, doubts about the arbitrator’s impartiality would prevent the case from being remitted to the same tribunal and undermine procedural efficiency.
The BGH’s Ruling
The BGH rejected the analogy and ordered service of the notice. It held that the relevant procedural situations were not comparable: a judge or court-appointed expert already knows about the proceedings in which they are acting, whereas an arbitrator has no equivalent role in set-aside or enforcement proceedings and may be unaware of them. Notice therefore serves a practical purpose.
The more important difference concerns the notice’s main purpose: binding its recipient in later proceedings to relevant findings in the court’s judgment. A judge or expert defending a damages claim would normally argue that the original judgment was correct, so there is little need to bind them to it. An arbitrator sued after an award is set aside may instead argue that the state court was wrong. The notice can restrict that defence by making relevant findings binding in the later damages action. The binding effect covers findings necessary to the court’s decision, not every observation in its reasons. Section 68 ZPO also preserves certain objections to how the notifying party conducted the case.
Courts must still refuse to serve an abusive notice. But the BGH found no abuse here: the Claimant could defend the award while preserving a damages claim in case the challenge succeeded.
Can the Same Tribunal Hear the Case Again?
The Bavarian court considered that allowing notice could undermine the efficiency gains of returning a dispute to the same tribunal. Remittal can save time and cost by avoiding the appointment of a new tribunal and full repetition of the arbitration, as the BGH noted in an earlier decision (Sellers of Definiens AG v. AstraZeneca, Judgment of the German Federal Court of Justice, I ZB 42/25, 18 December 2025).
Service of a third-party notice alone would not normally prevent remittal. If the arbitrator intervenes in support of a party, however, that raises concerns about impartiality and prevents a return to the same tribunal. Under Section 74(3) ZPO, a valid notice can bind the arbitrator even without intervention. The arbitrator may therefore have a personal interest in joining to contest findings that could support a later damages claim, despite the consequences for remittal.
The BGH accepted that risk but gave priority to the notifying party’s interest in binding findings. It also emphasised that remittal requires a party’s request and does not follow automatically from setting aside the award.
The Separate Question of Liability
The decision properly recognises a party’s interest in using relevant court findings in a later claim against the arbitrator, rather than litigating the same issues twice. Whether the arbitrator is liable for damages remains a separate question.
Under German law, arbitrators are generally protected from liability for an incorrect legal decision. A failure to disclose relevant information may support a contractual claim, but the arbitrator’s contract and applicable arbitration rules may limit recovery.
The Californian case La Serena Properties v Weisbach (2010) provides an example. The award had been set aside for non-disclosure. The subsequent damages claim nevertheless failed because the court treated disclosure as part of the arbitral function protected by immunity. The BGH’s ruling leaves that separate assessment of liability open.
Practical Implications
The decision is unlikely to make third-party notices a routine feature of award challenges in Germany. Their value depends on the prospects of recovery from the arbitrator and whether the court’s findings would help establish liability.
A notice given to preserve a potential damages claim can carry a procedural cost. If the arbitrator intervenes and the award is later set aside for a different defect that the existing tribunal could otherwise have addressed, remittal may no longer be available. The award creditor then faces the cost and delay of a new arbitration.
That consequence may be attractive to a party seeking a different tribunal. The harder question is where to draw the line between a legitimate attempt to preserve a damages claim and an abusive attempt to prevent remittal. The BGH confirmed that abusive notices must not be served, but gave little guidance on where abuse begins. Future cases are likely to test that line.
