Introduction and Background
With the Justice Location Strengthening Act, Germany has taken a significant step towards modernizing its judiciary. Officially known as the Act to Strengthen Germany as a Judicial Location through the introduction of Commercial Courts and English as the court language in civil courts, the law aims to sustainably strengthen Germany as a judicial location in international competition. The focus is on the establishment of specialized Commercial Courts that concentrate on complex commercial law disputes, thus specifically addressing the needs of internationally operating companies.
A central element of the law is the ability to conduct proceedings in English. This significantly lowers the threshold for foreign companies to enforce their claims in German courts. The introduction of the Commercial Courts and the choice of English as the court language contribute to enhancing the efficiency and quality of the judiciary and position Germany as an attractive judicial location for international companies and investors. These innovations make civil jurisdiction fit for the challenges of a globalized economy and sustainably strengthen Germany as a business location.
Legal Foundations
The legal foundations for the establishment of Commercial Courts can be found in the Justice Location Strengthening Act, which is based on the Courts Constitution Act and the Civil Procedure Code. The law empowers the federal states to establish special Commercial Courts at the higher regional courts, which are responsible for commercial disputes with a value of more than 500,000 euros. The prerequisite is that the parties agree on the jurisdiction of the Commercial Court. A special feature is the possibility of conducting the entire procedure in English, which represents a significant advantage, particularly for international parties.
The decisions of the Commercial Courts can be appealed to the Federal Court of Justice, which provides additional legal certainty for the companies involved. Additionally, the law contains special provisions for the protection of trade secrets to ensure the confidentiality of sensitive corporate information during the proceedings. With these regulations, the Justice Location Strengthening Act sets new standards for the handling of commercial disputes in Germany and strengthens the position of the judicial location in international comparison.
Efficient Solutions for International Legal Disputes
The so-called Justice Location Strengthening Act came into force on April 1, 2025. This allows the federal states to establish new panels that specialize in international commercial disputes to strengthen Germany as a judicial location.
In a globalized economy, complex legal disputes between companies from different countries are inevitable. Fast, reliable, and business-oriented solutions are in high demand here. This is where the Commercial Courts come in, according to the law firm MTR Legal Rechtsanwälte. The specialized chambers of commerce focus on large commercial law disputes and hold an important position in the conduct of proceedings.
Commercial Courts for Disputes in Commercial Law
Commercial Courts are courts or special chambers that exclusively deal with commercial disputes. Unlike traditional civil courts, they offer procedures tailored to the needs of internationally active companies. This typically includes shorter procedure times, specialized judge teams with extensive experience in international contract disputes and commercial law.
The Commercial Courts are responsible for commercial law procedures with a dispute value of more than 500,000 euros, provided the parties have agreed to its jurisdiction. The judges at the Commercial Courts bring their expertise from various legal fields. A special feature is that the procedures can be conducted entirely in English upon request. An aspect that particularly represents a significant advantage in legal disputes between international companies. Furthermore, the judges specialize in complex commercial law issues.
Protection of Trade Secrets
A core concern of the Justice Location Strengthening Act is the comprehensive protection of trade secrets in the context of court proceedings. Particularly in complex commercial law disputes, as negotiated before the Commercial Courts, the confidentiality of sensitive corporate data is of decisive importance. The law therefore stipulates that parties can request certain information be classified as confidential. The court can then issue targeted orders to protect these trade secrets, preventing the disclosure of confidential data.
These regulations apply not only to proceedings before the Commercial Courts but to all commercial law proceedings in Germany. This makes Germany a more attractive judicial location for international companies and investors, as they can rely on the effective protection of their trade secrets even in public court proceedings. The protection of trade secrets is thus an important building block in strengthening Germany as a judicial location and sends a clear signal to the international economy that Germany as a business location meets the highest demands for confidentiality and legal certainty.
Advantages of the Commercial Courts
Commercial Courts offer a range of advantages from which the parties can benefit:Expert Specialization: The judges at the Commercial Courts are trained and experienced in complex commercial law issues. This ensures that economic contexts are quickly grasped and legally assessed correctly. For companies, this means less risk of incorrect decisions due to a lack of economic expertise.Procedure Language English: The procedures can be conducted entirely in English. This eliminates the need for laborious translations of documents and statements. For all involved, this means a noticeable gain in efficiency.Faster Procedures: Commercial Courts value swift procedure processes. There are often fixed deadlines for documents and hearings. This means that processes, which would drag on for years in traditional procedures, can be concluded significantly faster.Reliability and International Recognition: Judgments of German courts – and thus also of the Commercial Courts – enjoy high international recognition. This means that decisions can be relatively easily recognized and enforced in many countries. Companies thereby receive a reliable basis on which to shape their business relationships.Alternative to Arbitration: Previously, arbitration was often the first choice for many international disputes. However, arbitration is not always more transparent than state court proceedings. Commercial Courts offer an attractive alternative here. They are public, yet still flexible and business-oriented.
Commercial Chambers at Regional Courts
The establishment of Commercial Courts is the responsibility of the federal states, with only one Commercial Court to be established in each federal state. Additionally, so-called Commercial Chambers are to be established at the regional courts. Legal disputes between international companies can also be negotiated at the Commercial Chambers. As with the Commercial Courts, the procedure can be conducted in English at the request of the parties. The judges have special knowledge in international commercial law and often experience in international arbitration.
Strengthening Germany as a Judicial Location
Commercial Courts aim to position Germany as an attractive location for international dispute resolution. Companies are to benefit from a specialized, efficient, and internationally oriented judiciary. Especially in times when cross-border business relationships are becoming increasingly important, Commercial Courts offer a modern response to the needs of the global economy.
For international companies, it is therefore worthwhile to consider this option for conflict resolution – whether in preparation for a contract or when resolving an existing conflict. However, the question remains whether, in individual cases, a negotiation at a regional court or an arbitration court would be the better choice. This should also be considered in court jurisdiction agreements.
MTR Legal Rechtsanwälte advises on issues of litigation in commercial law.
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