Hamburg Friendly Arbitration

Article 20 of Local Usage in the Commodity Trade in Hamburg

1. Arbitration means the settlement of disputes by the decision of one or more arbitrators, without recourse to the ordinary courts of law, not only on questions of quality but on all other disputes arising out of the transaction, including, in particular, questions of law as well, unless the contract expressly provides otherwise.
2. Where –friendly arbitration–, –private arbitration–, or –Hamburg arbitration– has been agreed, the party desirous of arbitration shall request the other party in writing, naming the arbitrator it has appointed, to designate its arbitrator within a reasonable time limit. If both parties have their domicile or their registered offices in Hamburg, three working days shall be deemed a reasonable time limit, in other cases a week. If the time limit set is too short, it initiates the time towards a reasonable time limit. If the other party is not in a position to adhere to the time limit of three days, it shall inform the party seeking arbitration of this in writing before expiry of the time limit and giving grounds. It is then obliged to designate its arbitrator not later than within one week of the first request. After fruitless expiry of the time limit the Hamburg Chamber of Commerce will, on the application of the party seeking arbitration, appoint the arbitrator. Appointment of an arbitrator shall only be deemed to have taken place within the stipulated time limit if notice thereof is received by the party seeking arbitration within that time limit. The arbitrator must have residence and place of abode in the territory of the Federal Republic of Germany. The appointment of an arbitrator who does not fulfil this condition is invalid.
3. An arbitrator may be challenged for the same reasons and on the same conditions which justify challenging a judge. An arbitrator may also be challenged if negligent in the fulfilment of his duties. Applications should be filed with the Hamburg Chamber of Commerce which will reach a decision after hearing the parties. After termination of this procedure the parties may take recourse to litigation as provided in section 1037 of the German Code of Civil Procedure. In the event of negligence on the part of an arbitrator the Hamburg Chamber of Commerce shall simultaneously appoint a substitute.
4. If the arbitrators fail to agree, they shall appoint an umpire. If no agreement on the umpire is reached, the Hamburg Chamber of Commerce shall be requested to appoint the umpire. The umpire shall take counsel with the arbitrators and make a decision in conjunction with them. If no agreement can be reached, a decision shall be made by majority vote. The award shall be in writing and shall be signed by all arbitrators.
5. Hamburg is the place of jurisdiction.
6. If in connection with the arrangement of –friendly arbitration–, –private arbitration–, or –Hamburg arbitration– reference is made to other terms and conditions, contracts or the like with or without adding the words –otherwise–, –according to–, –on the basis–, 'subsequent to–, or the like, the provisions referred to shall be valid only to the extent that they are not contradictory to the provisions of this Article.
7. If –Chamber of Commerce Arbitration– is agreed upon, findings relating to the condition or quality of the goods, their lesser value, if any, or market prices shall, in the absence of an express agreement to the contrary, be arrived at by two experts appointed by the Hamburg Chamber of Commerce pursuant to the Rules for the Determination of Quality dated 12^th April 1911; other disputes of any kind whatsoever shall be settled by the Court of Arbitration of the Hamburg Chamber of Commerce (cf. Rules of the Court of Arbitration of the Hamburg Chamber of Commerce dated 9^th December 1948).