Client Alert \u00a0|\u00a0 July 22, 2026<\/p>\n
In a decision of March 6, 2026 (Case No.\u00a032 Sch 3\/25), the Frankfurt Higher Regional Court confirmed the German Federal Court of Justice\u2019s Steinbruch doctrine \u2013 under which an arbitral award is subject to unrestricted judicial review, in fact and in law, for compatibility with the mandatory antitrust prohibitions \u2013 and clarified that the same standard applies to the mandatory prohibitions contained in Articles\u00a0101 and 102 TFEU. The decision is significant because it confirms that competition-law issues are subject to full judicial scrutiny despite arbitration\u2019s traditionally limited scope of review. On that basis, the court set aside an award premised on an overbroad post-M&A non-compete.<\/p>\n
Overview<\/p>\n
Under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention; Article 5(2)(b)) and German law (Section\u00a01059 of the German Code of Civil Procedure(ZPO), corresponding to Article\u00a034 of the UNCITRAL Model Law), state courts are, in principle, prohibited from fully reviewing an arbitral award on the merits (prohibition of a\u00a0r\u00e9vision au fond). German state courts can only examine whether the arbitral award violates German public policy (ordre public). The traditional standard applied in this context has been whether the recognition and enforcement was \u201cobviously incompatible with essential principles of German law\u201d.<\/p>\n
In its landmark 2022\u00a0Steinbruch\u00a0ruling (decision of September\u00a027, 2022 \u2013 KZB 75\/21; for our analysis of the ruling, see\u00a0here<\/a>), the Cartel Senate of the German Federal Court of Justice (BGH) significantly expanded that regime: arbitral awards are subject to a\u00a0full\u00a0judicial review on the merits by the state courts, in fact and in law, of German competition law.<\/p>\n The Frankfurt Higher Regional Court (Oberlandesgericht,\u00a0OLG) has now confirmed this doctrine and held expressly that an arbitral award\u2019s compatibility with Articles\u00a0101 and 102 TFEU is subject to the same unrestricted review, on both the facts and the law. On that basis, the court set aside a German Arbitration Institute (DIS) award that had given effect to an overbroad post-M&A non-compete \u2013 void under Article\u00a0101 TFEU \u2013 and remitted the matter to the\u00a0same\u00a0tribunal under Section\u00a01059(4) ZPO.<\/p>\n Factual Background<\/p>\n In October 2021, the German subsidiary of a Swiss banking group (the\u00a0Seller) sold its Spanish wealth-management business to a Spanish bank (the\u00a0Purchaser) under a German-law share purchase agreement (SPA). The SPA contained a 24-month non-compete barring the Seller and its group from competing in the Spanish wealth-management market, subject to several exceptions. The SPA provided for arbitration under the rules of the DIS, seated in Frankfurt.<\/p>\n In 2023, the Seller\u2019s ultimate parent merged with another major Swiss banking group. That group also operated a small Spanish business \u2013 less than 1% of the merged group\u2019s consolidated revenues. The Purchaser commenced arbitration, contending that the merger breached the non-compete unless the Spanish business was divested within six months. In a bifurcated proceeding, the tribunal issued a Partial Award (Phase I) finding that the Seller had breached the non-compete; remedies and quantum were reserved for Phase\u00a0II. The Seller applied to set the Partial Award aside.<\/p>\n The Decision<\/p>\n Full review \u2013 now expressly for EU competition law.\u00a0Confirming the\u00a0Steinbruch\u00a0ruling, the court held that an award is subject to unrestricted review, in fact and in law, as to the application of the mandatory antitrust prohibitions, and made explicit that this review covers Articles\u00a0101 and 102 TFEU \u2013 which, as the European Court of Justice held in\u00a0Eco Swiss, form part of the\u00a0ordre public\u00a0and must be applied by the national courts of their own motion.[1]<\/a>\u00a0Decisively, the question is not whether the tribunal addressed the competition-law issues and assessed them defensibly \u2013 the court rejected the Purchaser\u2019s characterization of any error as a mere \u201creasoning error\u201d \u2013 but whether the award itself is compatible with the mandatory requirements of Articles\u00a0101 and 102 TFEU. Accordingly, the court\u2019s focus was not the persuasiveness of the tribunal\u2019s reasoning but the compatibility of the award itself with mandatory competition law. It was therefore immaterial that the Seller had not raised Article\u00a0101 before the tribunal or that the non-compete concerned a past, closed period.<\/p>\n Jurisdiction and the partial award.\u00a0Two procedural points preceded the merits. First, jurisdiction over the set-aside application lies with the OLG\u2019s arbitration senate, not the specialized cartel senate, even where competition-law questions are decisive (Sections\u00a01062, 1059 ZPO). Second, a partial award that finally disposes of individual elements of the claim \u2013 here, the existence of a breach, with only quantum reserved \u2013 is independently challengeable; the Seller did not have to await the Phase II award, which would have risked the Partial Award becoming unchallengeable.<\/p>\n The tribunal\u2019s interpretation rendered the non-compete incompatible with Article\u00a0101 TFEU.\u00a0On the merits, the court held the non-compete \u2013 as the tribunal had construed it \u2013 to be an overbroad ancillary restraint (\u00fcberschie\u00dfend). A post-M&A non-compete escapes Article\u00a0101(1) TFEU only insofar as it is directly related and objectively necessary to the transaction and proportionate in subject matter, geography and duration; anything beyond that is void under Article\u00a0101(2) TFEU. The 24-month term and the geographic and material scope were unobjectionable, but the exceptions to the non-compete were too narrow \u2013 in particular, they failed to preserve the seller\u2019s freedom to acquire or hold purely financial, non-controlling stakes, as reflected in the European Commission\u2019s Notice on ancillary restraints.[2]<\/a>\u00a0The covenant was therefore not objectively necessary within the meaning of the ancillary-restraints doctrine and infringed Article\u00a0101(1) TFEU. Because nullity under Article\u00a0101(2) is absolute and must be examined\u00a0ex officio, it was irrelevant that the specific merger arguably fell within the (inadequate) exceptions; nor would the court rescue the non-compete clause by a validity-preserving (blue-pencil) reduction.<\/p>\n Set-aside and remittal.\u00a0Because the award perpetuated the competition-law violation by enforcing a contractually agreed restriction that was void under Article\u00a0101(2) TFEU, the court set it aside under Section\u00a01059(2) No. 2(b) ZPO. As the Purchaser had requested in case of a set-aside, the court remitted the matter to the\u00a0same\u00a0tribunal under Section\u00a01059(4) ZPO, consistent with the German Federal Court of Justice\u2019s recent clarification that remittal remains available even where an award is set aside for an\u00a0ordre public\u00a0violation and is not an exceptional remedy (BGH, decision of December\u00a018, 2025 \u2013 I ZB 42\/25). The court found no conspicuous and serious\u00a0ordre public\u00a0violation here \u2013 and reasoned that, precisely because the competition-law review is full and unrestricted rather than confined to grave or manifest errors, setting the award aside on those grounds does not itself indicate that the tribunal is irreversibly committed to its view.<\/p>\n Practical Implications and Outlook<\/p>\n The decision confirms and clarifies the\u00a0Steinbruch\u00a0doctrine by making clear that the same standard applies to Articles\u00a0101 and 102 TFEU: state courts may fully review, without restriction, whether an arbitral award is compatible with the mandatory prohibitions of EU or German competition law. In practical terms, parties can no longer assume that arbitration will shield competition-law determinations from substantive judicial scrutiny.<\/p>\n That bears directly on forum selection. Because an award remains open to full competition-law review by the state courts, arbitration\u2019s usual finality and limited-review advantages are reduced wherever competition-law questions are foreseeable \u2013 as they frequently are in M&A. The decision is also likely to influence future forum-selection discussions. Parties negotiating M&A agreements may therefore wish to consider whether a German Commercial Court may offer strategic advantages over arbitration where competition-law issues are foreseeable. Unlike an arbitral tribunal, a Commercial Court can also refer questions on Articles\u00a0101 and 102 TFEU to the European Court of Justice. This may reduce legal uncertainty where unresolved questions of EU competition law are foreseeable from the outset of a transaction. These courts offer English-language proceedings before commercially experienced judges for disputes exceeding EUR\u00a0500,000, expressly including post-M&A disputes. (For our analysis on German Commercial Courts, see\u00a0here<\/a>.)<\/p>\n More broadly, the decision is a reminder that post-M&A non-competes \u2013 and ancillary restraints generally \u2013 must be kept within the narrow limits of Articles\u00a0101 and 102 TFEU. Both the covenant\u2019s scope (duration, geography and subject matter) and its exceptions should be calibrated to the ancillary-restraints doctrine and the relevant Commission\u2019s Notice. Particular attention should be paid to merger exceptions, investment carve-outs and minority shareholding provisions, as the court\u2019s reasoning demonstrates that the drafting of these exceptions may determine whether a restrictive covenant remains compatible with Article\u00a0101 TFEU. An overbroad covenant may be wholly void under Article\u00a0101(2) TFEU, and German courts will not necessarily rescue it through a validity-preserving (blue-pencil) reduction. Although the case arose in the context of a post-M&A non-compete, the court\u2019s reasoning is likely to have implications well beyond restrictive covenants and may influence future arbitrations in which the outcome depends on the application of mandatory German or EU competition law.<\/p>\n [1]<\/a>\u00a0European Court of Justice, Case C-126\/97, Eco Swiss, Judgment of June 1, 1999; confirmed by General Court of the European Union, Case T-616\/18, Gazprom Competition Commitments, Judgment of February\u00a02, 2022.<\/p>\n [2]<\/a>\u00a0Commission Notice on restrictions directly related and necessary to concentrations, OJ 2005 C 56\/24 (March\u00a05, 2005).<\/p>\n Gibson Dunn\u2019s lawyers are available to assist in addressing any questions you may have regarding these issues. For additional information about how we may assist you, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm\u2019s\u00a0International Arbitration\u00a0or\u00a0Judgment & Arbitral Award Enforcement\u00a0practice groups:<\/p>\n Finn Zeidler\u00a0\u2013 Frankfurt (+49 69 247 411 530,\u00a0fzeidler@gibsondunn.com<\/a>)<\/p>\n Annekathrin Schmoll\u00a0\u2013 Frankfurt (+49 69 247 411 533,\u00a0aschmoll@gibsondunn.com<\/a>)<\/p>\n Marc Kanzler\u00a0\u2013 Munich (+49 89 189 33 269,\u00a0mkanzler@gibsondunn.com<\/a>)<\/p>\n Christopher Harris KC\u00a0\u2013 Global Co-Chair, Judgment & Arbitral Award Enforcement \/ International Arbitration Groups, Zurich \/\u00a0London (+41 44 382 5490,\u00a0charris@gibsondunn.com<\/a>)<\/p>\n Penny Madden KC\u00a0\u2013 Co-Chair, International Arbitration Group, Rahim Moloo\u00a0\u2013 Co-Chair, International Arbitration Group,
London (+44 20 7071 4226,\u00a0pmadden@gibsondunn.com<\/a>)
<\/a>
Miguel A. Estrada\u00a0\u2013 Co-Chair, Judgment & Arbitral Award Enforcement Group,
Washington, D.C. (+1 202.955.8257,\u00a0mestrada@gibsondunn.com<\/a>)<\/p>\n
New York (+1 212.351.2413,\u00a0rmoloo@gibsondunn.com<\/a>)<\/p>\n