Commercial Courts in Germany
Dr Karl Friedrich Dumoulin
by Dr Karl Friedrich Dumoulin
Several countries have established courts for international commercial disputes in recent years to increase their attractiveness as court locations in international competition. Two examples are the Netherlands Commercial Court located in Amsterdam (see article by Michiel Teekens in FYI Litigation & Dispute Resolution News, Autumn 2020, No. 13, p. 9), and the commercial court in Cyprus (see article by Melina Karaolia in FYI Litigation & Dispute Resolution News, Summer 2022, No. 16, p. 3). In Germany, a federal state, the judiciary is a matter for the Länder (federal states). Some Länder have introduced commercial courts in recent years, such as the Chamber for International Disputes of the District Court Frankfurt am Main in the state of Hesse, and the Commercial Courts at the District Courts of Stuttgart and Mannheim in Baden-Württemberg. These state courts are staffed by experienced judges with excellent knowledge of international commercial law.
Oral proceedings may be conducted in English by consensus of the parties, and English language documents may be introduced into the proceedings. Interpreters and translations of contractual documents are therefore often unnecessary. In contrast, pleadings and judgments must be drafted in German according to the current legal situation. In January 2023, the German Federal Ministry of Justice presented a key issues paper that provides for changes to the law. In the future, it should also be possible to draft pleadings and judgments in English, so that court proceedings can be conducted entirely in English. The amendments are intended to enable proceedings to be conducted in English throughout, including at the appellate level and before the Federal Supreme Court.
For quality assurance purposes, it will be possible for Länder to concentrate proceedings in the relevant Land in one or only a few district courts, or, in the appellate instance, only in one higher regional court. Furthermore, the key issue paper suggests that, for important commercial cases with a value under dispute above EUR 1 million, the Länder should set up a commercial court at one of the higher regional courts in the respective Land. This commercial court at a higher regional court could be called on by the parties directly as the court of first instance, thus bypassing the ordinary court of first instance (being the district courts). It should be noted in this context that the parties already under current law have the option of limiting the number of instances, even at the beginning of the proceedings, in order to save time and money.
Germany is a country with diverse international economic relations. The German judicial system enjoys a good reputation and is relatively inexpensive by international standards. The Ministry of Justice's key issues paper therefore points in the right direction. Commercial courts are a useful addition to existing dispute resolution procedures in an international context. When negotiating jurisdiction clauses, however, the parties should also keep in mind the advantages of arbitration proceedings. For example, their confidentiality – in contrast to the public nature of negotiations in state courts – should be considered. In addition, arbitral awards can also be declared mutually enforceable in the contracting states on the basis of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has been ratified by 168 contracting states. However, insofar as disputes between companies with their registered office in EU member states, or in Norway, Iceland, or Switzerland are concerned, there is also the possibility of simplified enforcement in other member states or contracting states for judgments of German state courts (commercial courts) in accordance with the provisions of the Brussels Ia Regulation of the Lugano Convention of 2007.
Dr Karl Friedrich Dumoulin is Global Vice Chair of the GGI Litigation & Dispute Resolution (LDR) Practice Group and Partner at FPS in Dusseldorf. His areas of expertise cover the entire range of corporate and commercial law, including litigation and dispute resolution, very often in an international context. Contact Karl Friedrich.
FPS is one of the largest fully independent German law firms, with four offices in Germany. FPS currently employs over 120 lawyers and notaries. One of the firm’s core areas of expertise is national and international litigation as well as dispute resolution.
GGI member firmFPSBerlin, Dusseldorf, Frankfurt am Main, GermanyT: +49 211 302 01 50
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