Third-Party Notice to an Arbitrator: German Federal Court of Justice (Decision of 30 July 2026 – I ZB 6/26) Opens Up a New Tactical Avenue in Set-Aside Proceedings

A three-member DIS arbitral tribunal had upheld a claim arising from a biomethane supply agreement. The unsuccessful respondent applied to the Bavarian Supreme Court (BayObLG) to have the award set aside. At the heart of the application was an allegation of bias against the arbitrator appointed by the respondent itself. He was alleged to have breached his disclosure obligations under the DIS Arbitration Rules by failing to disclose his cooperation with a law firm that had advised the claimant, including in connection with the subject matter of the dispute. The arbitrator was aware of this advice.

The claimant served a third-party notice on the arbitrator, arguing that if the award were set aside on grounds of bias, it could have a claim for damages against him. The BayObLG, however, refused to serve the third-party notice. Applying Section 72(2) of the German Code of Civil Procedure (ZPO) by analogy, it held that such notice was inadmissible because the policy considerations underlying the provision in relation to state court judges applied equally to arbitrators.

The German Federal Court of Justice (BGH) overturned that decision. Unlike state court judges, arbitrators do not otherwise become aware of subsequent set-aside proceedings. They also have a genuine interest in the binding effect of the decision in any subsequent proceedings against them. Nor did the BGH find the procedural-efficiency argument concerning a remittal to the same arbitral tribunal under Section 1059(4) ZPO persuasive. Such a remittal requires an application, which the party alleging bias will generally have no reason to make. It is for the opposing party to decide whether to put that option at risk by serving a third-party notice.

Practical takeaway: Arbitrators must now be prepared for the possibility of being identified as potential targets of recourse claims and served with a third-party notice in state court proceedings to set aside an arbitral award. If an arbitrator intervenes in those proceedings, this may give rise to doubts as to their impartiality and could prevent the matter from subsequently being remitted to the same arbitral tribunal. The decision whether to intervene therefore requires careful consideration, balancing this risk against the arbitrator’s interest in actively defending themselves against the allegations.

Parties to arbitration proceedings gain an additional tactical tool at the post-award stage. The successful party defending the award can serve a third-party notice on the arbitrator concerned in order to preserve its position in relation to a potential subsequent recourse claim. Conversely, a party seeking remittal to the original arbitral tribunal should bear in mind that serving a third-party notice on one of its arbitrators may close off that route by creating doubts as to the arbitrator’s impartiality.