In many partnerships such as OHG, KG or GbR, disputes between partners are not uncommon. Be it over profit distribution, management or withdrawal modalities. However, before it is possible to go to court, there is often a completely different stage: out-of-court settlement. The reason for this are arbitration clauses, which are firmly anchored in many articles of association and are considered a legally binding intermediate step. If you ignore them, you risk having your claim dismissed and not only losing time, but also suffering financial disadvantages.
Arbitration before legal action as a real obstacle to legal action
What may sound like a recommendation in practice is legally binding: anyone who has committed to arbitration in the articles of association may not simply go to court. The courts recognize these clauses as an effective bar to legal action. This is supported by the established case law of the Federal Court of Justice. Only if proper arbitration has been carried out unsuccessfully or is no longer objectively feasible may legal action be taken. Otherwise, the attempted legal action remains ineffective.
Freedom of contract with effect
Legally, the effectiveness of the arbitration clause is based on the freedom of contract pursuant to Sections 133 and 157 BGB. The shareholders thus voluntarily opt for a priority conflict resolution procedure that resolves internal disputes as far as possible without high-profile court proceedings. This method is not only more effective, especially in long-standing company relationships, but also preserves relationships, provided it is taken seriously and carried out professionally.
Arbitration or mediation and what comes next
In the event of a conflict, the arbitration provided for in the contract must be properly initiated. The contract usually provides for the appointment of a neutral arbitrator, who is often an experienced lawyer or business mediator. Alternatively, mediation can also be considered, which is more open and relies more on voluntary communication and a mutual search for a solution. Only if these procedures demonstrably fail may legal action be taken. Proof of failure is essential, otherwise the case may be dismissed.
Legal support pays off
What sounds simple is often legally tricky in reality. Even the question of whether arbitration is deemed to have “failed” can be contentious. There are also deadlines, formalities and strategic considerations. Anyone acting without experienced legal advice here risks making easily avoidable mistakes. A specialist lawyer for commercial and corporate law or a tax advisor – since they are not involved in court – can not only provide legally secure support during the arbitration process, but also provide information about alternatives, risks and prospects of success. They can also protect against ill-considered steps that could later be interpreted adversely in court.
Take arbitration clauses seriously, but use them professionally
The arbitration clause in the articles of association is not a mere formality, but an effective management tool for dealing with conflicts. If used correctly, it offers the opportunity for swift, economically sensible and relationship-friendly solutions. However, if it is ignored or only dealt with half-heartedly, it can quickly prove to be a stumbling block. The following therefore applies: conflicts within the partnership should be dealt with legally at an early stage. Not only to pave the way for legal action, but ideally to avoid having to take it at all.
