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This decision, rendered in an action to set aside an award, dealt with the question of the nationality of the award which is relevant in determining the jurisdiction of the court.

In a dispute about the value of a share in a partnership sold by one party to another, the parties finally agreed on a binding determination of the value by an expert acting as a sole arbitrator. Though the parties exchanged several drafts of an arbitration agreement, no formal agreement was ever signed. After an unsuccessful settlement attempt in Düsseldorf, the arbitrator undertook an audit of the partnerships at their places of business in Zurich, Switzerland. Further negotiations took place for more than two years. Finally, upon motion of the claimant, the arbitrator rendered an arbitral award at his home in Düsseldorf which mentioned his address. The respondent filed an application for setting aside the award before the Higher Regional Court in Düsseldorf.

In its decision, the Court declined jurisdiction to rule on the validity of the award. Though the decision was primarily based on the former German law, the Court dealt also with the question under the new law, based on the MAL. According to section 1025(1) of the German Code of Civil Procedure, the provisions on arbitration only apply if the place of arbitration is situated in Germany. This rule also applies to the proceedings for setting aside an award pursuant to section 1059 (adapted from article 34 MAL). The Court found that the place of arbitration was neither agreed upon by the parties, nor was it determined by the arbitrator in accordance with section 1043 (article 20 MAL), as required by section 1054(3) (article 31(3) MAL). The award merely stated the arbitrator's address. Under these circumstances, the Court defined the place of arbitration to be the actual, effective place of arbitration. Only if no particular place could be determined, could the place of the last oral hearing be considered to be the place of arbitration.

In the case at issue, all relevant actions ­the auditing and the subsequent negotiations with both parties­ took place in Zurich. Therefore, and regardless of where the award itself was issued, the effective place of arbitration was not situated in Germany.

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