Verbatim minutes, protection of secrets and English-speaking senates: this is how the German judiciary should be competitive in international economic processes.

Peter Biesenbach (CDU), Minister of Justice in North Rhine-Westphalia, does not want to leave commercial law and legal training to private arbitration tribunals.

Dhe German Federal Council clears the way for international economic processes throughout Germany. In its plenary session on Friday, the regional chamber passed the draft law to “strengthen the courts in economic disputes”, which will now be sent directly to the federal government.

As the FAZ reported, the initiative came from the states of North Rhine-Westphalia and Hamburg. A working group had been working on a template since 2018. If the Bundestag passes the law, it gives the parties to a legal dispute more flexibility in future to conduct their civil proceedings in front of special “commercial courts”.

The draft provides for commercial disputes with a value in dispute of more than two million euros to be settled in the first instance before a higher regional court. There proceedings should be conducted in writing or orally before English-speaking senates. The administration of justice is a matter for the federal states. They should decide at which higher regional courts such senates will be set up. Several countries should also be able to join forces here.

Brexit as a driver

“As a judiciary, we would like to offer business life the opportunity to forego the regional court level in the event of extensive legal disputes over large sums, and to be able to take advantage of directly specialized senates in a few – specially selected – higher regional courts,” said Peter Biesenbach (CDU), Justice Minister of North Rhine-Westphalia. First and foremost, this saves the parties time and guarantees the highest quality of jurisdiction. “At the same time, the regional courts are relieved of cases that they can hardly deal with in a timely manner in day-to-day business.”

The advance of the countries was accelerated by Great Britain’s exit from the EU. In the run-up to the Federal Council meeting, Hamburg’s Justice Senator Anna Gallina (The Greens) declared that Brexit would not only affect commercial traffic. It should not lead to a shift in the economic disputes. German legal politicians are also a thorn in the side that many international companies prefer non-public arbitration to a dispute before a civil chamber.

In order to meet these expectations, the draft law also provides for the possibility of protecting trade secrets. There should also be verbal transcripts of the oral negotiations.

So far, this has not been the norm in German courts; companies have to use external service providers for this. “With this law, we want to ensure that major commercial disputes, which in recent years have tended to be before private arbitration tribunals or abroad, increasingly end up before state courts in Germany,” emphasizes Biesenbach. As Minister of Justice in the largest federal state, he will do everything in his power to ensure that the rule of law and the courts continue to shape the jurisprudence in commercial law and by no means gradually “give it away”.

The draft is not the first attempt to anchor English-speaking chambers in the German judiciary. In the past, however, the Bundestag had ignored the initiative of the federal states.