Germany to introduce 'commercial courts' and proceedings in English

Germany's Ministry of Justice has published a draft bill (35-page PDF in German language/ 380 KB) intended to strengthen Germany as a court venue by introducing so-called commercial chambers and commercial courts, as well as English as the court language for certain proceedings. Already in January, Justice Minister Marco Buschmann had presented a corresponding key issues paper.

"The ministry's reform efforts are certainly also based on the results of a study commissioned by the ministry to investigate the causes of the decline in the number of incoming cases at the civil courts," said Lisa Oettig, litigation and arbitration expert at Pinsent Masons. "According to the study, the number of regional court cases fell by more than 20 % between 2005 and 2019, and this long-term trend is not expected to reverse in the future."

The draft bill provides for commercial chambers to be set up at the regional courts where commercial disputes can be conducted. The federal states may determine what kind of disputes will be admitted to the commercial chambers. Both the proceedings and the decision of the commercial chambers will be available in English, provided the parties agree on this or the defendant does not object.

In addition, commercial courts are to be set up at the higher regional courts, where private law commercial disputes with an amount in dispute of €1 million or more are to be heard. Here, too, the parties would be able to conduct proceedings entirely in English. Modern technical equipment, specialised judges and early case management sessions for planning the proceedings are expected to speed up proceedings before the commercial courts. An appeal against the judgement of a commercial court to the Federal Supreme Court would be possible without admission, unlike otherwise provided for in German civil procedure law. It should also be possible to conduct the appeal proceedings in English, provided the competent Supreme Court Senate agrees.

The decisions of the commercial courts would be published and translated into German, but trade secrets would already be protected when filing the lawsuit. Trade secret protection would thus be extended to the entire proceedings.

According to the draft Bill, video hearings and video evidence would be possible in both the commercial courts and the commercial chambers.

"The ministry's study on the decline in case numbers in civil courts also shows that the already existing English-language chambers for international commercial matters at some regional courts in major cities are only called upon extremely rarely," said Johanna Weißbach, also an expert in litigation and arbitration at Pinsent Masons. "This shows that the envisaged reforms, if implemented, will probably not be a sure-fire success for strengthening Germany as a court venue and that the causes for the decline in case numbers lie deeper."

Interested parties have until 2 June to comment on the ministry’s proposals. The ministry will publish the comments on its website.

Only last week, the Federal Ministry of Justice published a paper on modernisation of the German arbitration law. This project interlocks with the creation of the commercial courts and should also contribute to making Germany a more attractive venue for international commercial disputes.