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Bye-Bye Arbitration Courts in Germany?

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Bye-Bye Arbitration Courts in Germany?

This is spectacular news! On July 4, 2024, the German Parliament (“Deutscher Bundestag”) passed the new “Law to Strengthen Germany as a Legal Center through the Introduction of Commercial Courts and English as a Court Language in Civil Proceedings” (“Justizstandort-Stärkungsgesetz”) that by consequence introduces for the first-time Commercial Chambers and Commercial Courts within classical “prussian” German Courts (“OLG” & “BGH”). 
Bye-Bye Arbitration Courts in Germany?
Here are some key points:

Here are some key points:

  1. Legal-Purpose: The law aims to make Germany as a place of venue more attractive for international commercial disputes and to seriously compete with arbitration tribunals all over German speaking parts in Europe like in Berlin, Vienna or Frankfurt a.M.

  2. Key features:

    • Establishes specialized Commercial Courts at higher regional courts (“Oberlandesgerichte”) for large commercial disputes
    • Allows proceedings to be conducted entirely in English if parties agree
    • Introduces Commercial Chambers at selected regional courts (“Landgerichte”) for disputes with lower amounts in controversy
  3. Jurisdiction:
    • Commercial Courts will handle cases with a value of at least 500,000 EUR
    • Commercial Chambers will handle cases below this threshold.
  4. Implementation: While the law has passed, it's up to individual German states (“Bundesländer”) to establish these courts. The expectation is that about five states will set up Commercial Courts.
  5. Status: As of the information provided, this is now law in Germany, though the actual establishment and operation of these courts may still be in progress depending on actions by individual states.
Whether this will lead to a fundamental and lasting change with regard to place of venue and choice of jurisdictions clauses, remains to be seen and will continue to be closely monitored. At least it provides new options and gives the old-fashioned German proceeding landscape and image a new face-lift by enhancing Germany's competitiveness as a venue for international commercial disputes.
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