Bridging the Gap: DIS introduces Supplementary Rules for Third-Party Notices in Arbitration

The German Arbitration Institute (DIS) is the first arbitration institute that introduces supplementary rules for third-party notices. These DIS-TPNR are effective as of 15 March 2024. The new rules address a longstanding gap in arbitration proceedings. They allow to involve third parties to bind them in future proceedings to fact findings in an award rendered in the arbitration proceedings.

The DIS-TPNR closely align with the third-party notice model outlined in Sections 72 et seqq. of the German Code of Civil Procedure. Their intention is to prevent contradictory decisions and promote procedural economy and legal consistency. They follow a minimally invasive approach by limiting the third party's role to supporting the party issuing the third-party notice as an intervener.

The key findings of these newly introduced supplementary rules:

• The parties must mutually agree on the applicability of these rules (Art. 1.1 DIS-TPNR);
• The third-party notice can be issued in case a party anticipates asserting or defending claims against third parties (Art. 2 DIS-TPNR);
• The third-party notice recipient shall, in general, have the chance to influence the composition of the arbitral tribunal (Art. 7.1 and Art. 8.2 DIS-TPNR);
• The third-party notice has a binding effect. The recipient of a third-party notice will – to some extent - not be heard in a future dispute, with the allegation that the final decision in the initial dispute was incorrect (Art. 11. 1 DIS-TPNR);
• Third parties are – in contrast to Section 66 German Code of Civil Procedure – not permitted to intervene independently.

The DIS-TPNR is a welcome initiative to bridge the gap between initial and subsequent state court and/or arbitration proceedings in this respect. It remains to be seen, whether the users accept them or will revert to the so-called Munich Rules which have the same aim but follow a different approach.

Dr Ralf Hafner
Dr Tobias Pörnbacher