Bill to Modernize Arbitration Law
The Federal Government has introduced into the Bundestag a bill to modernize arbitration law and to make further amendments to the Zivilprozessordnung (ZPO, German Code of Civil Procedure) in the field of international civil procedure law. The Bundestagsdrucksache 21/8414 (Bundestag printed matter, parliamentary document) is dated 7 October 2026. The draft had already been adopted by the Federal Cabinet on 10 June 2026.
The legislative initiative was presented by Federal Minister of Justice Stefanie Hubig. It builds on efforts to make Germany as a place of arbitration more competitive internationally while also adapting individual provisions of civil procedure law to cross-border procedural requirements.
An initiative with identical content was not completed in the previous electoral term. It failed due to the premature end of the legislative period; the draft at that time was, among other things, the subject of Bundestagsdrucksache 20/13257 (Bundestag printed matter, parliamentary document) and was debated at first reading on 17 October 2024.
Digital Forms of Procedure in Arbitration
Video Hearings and Electronic Arbitral Awards
According to the bill, digital forms of communication and procedure are to be expressly permitted in arbitration proceedings. These include, in particular, video hearings and electronic arbitral awards.
The aim is to enable arbitration proceedings to be conducted more swiftly and with fewer resources. The express statutory basis is intended to create greater clarity for procedural practice without abandoning the nature of arbitration as a dispute resolution procedure shaped by party autonomy.
Technology-Neutral Formal Requirements for Arbitration Agreements
The formal requirements for arbitration agreements are to be eased and structured in a technology-neutral manner. The draft justifies this by reference to alignment with international developments in arbitration law and with practices in business transactions.
At the same time, the draft version published in January 2026 no longer provides for arbitration agreements to be made entirely free of form. Unlike the proposal made in the previous legislative period, documentation of the arbitration agreement is to remain necessary for evidentiary purposes.
English-Language Proceedings before German Courts
The draft also provides for German arbitration law to be opened up to English-language proceedings before German courts insofar as they are dealing with arbitration matters. This is intended to strengthen international competitiveness and facilitate cross-border dispute resolution.
Under the proposed provision, the state governments are to be able to determine by statutory instrument that proceedings under § 1062 Abs. 1 ZPO (German Code of Civil Procedure) may also be conducted entirely in English before Oberlandesgerichte (Higher Regional Courts) or Oberste Landesgerichte (Higher State Courts) without a Commercial Court. The corresponding authorization may be transferred to the state judicial administration.
The initiative is connected with the Justizstandort-Stärkungsgesetz (Act to Strengthen Germany as a Justice Location), which entered into force on 1 April 2025 and introduced the Commercial Courts. The draft thereby pursues a further opening of court proceedings for international commercial disputes.
Further Amendments to Arbitration Law
Judicial Review in Questions of Jurisdiction
The bill also contains amendments concerning judicial decisions in connection with the admissibility of arbitration proceedings. § 1032 Abs. 2 ZPO-E (draft German Code of Civil Procedure) provides that, when determining the admissibility or inadmissibility of arbitration proceedings, the court will, upon application, also decide on the existence or validity of the arbitration agreement.
In addition, under § 1059 ZPO-E (draft German Code of Civil Procedure) in conjunction with § 1040 Abs. 4 ZPO-E (draft German Code of Civil Procedure), arbitral awards denying jurisdiction are also to be capable of being set aside by a court in future. This concerns cases in which the arbitral tribunal has wrongly declared that it lacks jurisdiction.
Grounds for Restitution and Publications
For grounds for restitution against final arbitral awards, the draft provides for an absolute limitation period of five years from the date on which the arbitral award becomes final. This is intended to define the timeframe for corresponding challenges to final arbitral awards.
In addition, arbitral awards are to be capable of publication in future under simplified conditions, provided that the parties do not expressly object. Decisions of the Commercial Courts and of the Bundesgerichtshof (BGH, Federal Court of Justice) in set-aside, recognition and enforcement proceedings are to be published on a mandatory basis under the draft.
Amendments to International Civil Procedure Law
The bill is not limited to arbitration law. It also provides for adjustments in international civil procedure law.
In particular, cross-border civil judicial assistance is to be facilitated and accelerated. Judicial documents from courts of other EU Member States are to be capable of being served electronically on recipients in Germany in future.
The proposed amendments include, among other things:
– electronic service of judicial documents from other EU Member States on recipients in Germany, – adjustments to facilitate cross-border civil judicial assistance, – amendments to § 55 ZPO (German Code of Civil Procedure) on the legal capacity of foreigners to conduct proceedings, – consequential issues regarding the expenditure of the federal states in implementation and enforcement.
According to the information in the draft, electronic service under § 1068 ZPO-E (draft German Code of Civil Procedure) without the involvement of German receiving agencies is expected to generate savings for the federal states of a maximum of EUR 210,000 annually.
Procedural Status and Statements
Ministerial Draft, Cabinet Decision and Bundesrat
The ministerial draft was published on 27 January 2026. The consultation of associations ran until 27 February 2026.
Following the Cabinet decision of 10 June 2026, the draft was forwarded to the Bundesrat (Federal Council) as Bundesratsdrucksache 458/26 (Bundesrat printed matter, parliamentary document). It was transmitted on 14 August 2026. The Bundesrat considered the draft at its 1068th session on 25 September 2026 as agenda item 44 and adopted an opinion pursuant to Art. 76 GG (German Basic Law).
Bundesrat Criticism Regarding Compliance Costs
In its opinion, the Bundesrat criticizes the Federal Government’s assumption that implementation will not give rise to any compliance costs for the federal states. It calls for a joint determination of the actual additional personnel, organizational and financial expenditure.
According to the bill, the economy is to be relieved by EUR 265,000 annually. This saving is classified as an “out” within the meaning of the one-in, one-out rule.
Assessment in Professional Statements
The Bundesrechtsanwaltskammer (Federal Bar Association) assessed the draft in its January 2026 version in a statement as suitable for sustainably strengthening the attractiveness of Germany as a place of arbitration and as a forum for court proceedings. This assessment relates to the status of the ministerial draft at that time.
In parallel, the Bundesministerium der Justiz (Federal Ministry of Justice) has announced a more extensive reform of civil procedure law. The present draft, however, specifically concerns the modernization of arbitration law and further amendments to the Zivilprozessordnung in the field of international civil procedure law.
Significance for Companies and International Disputes
For companies, investors and market participants operating across borders, the initiative may be significant in particular because arbitration proceedings are frequently agreed in international commercial and corporate relationships. The planned provisions concern, among other things, the language of proceedings, digital conduct of proceedings, formal requirements for arbitration agreements and judicial review of arbitration-related decisions.
The planned opening for English-language proceedings before German courts dealing with arbitration matters may play a role especially in international contractual relationships. The proposed provisions on the publication of arbitral awards and court decisions may likewise have implications for transparency and procedural practice.
Since the legislative process still concerns the draft, the final version remains to be seen. What is decisive is which provisions actually enter into force after completion of the parliamentary process.
Frequently Asked Questions
What does the bill to modernize arbitration law regulate?
The draft is intended, among other things, to expressly permit digital forms of procedure, video hearings and electronic arbitral awards. It also concerns formal requirements for arbitration agreements, English-language proceedings before certain German courts and individual amendments to international civil procedure law.
Under the bill, can arbitration proceedings in future be conducted entirely digitally?
The draft provides for the express admission of digital forms of communication and procedure, including video hearings and electronic arbitral awards. The specific form that is possible in an individual case depends on the applicable rules and the respective arbitration proceedings.
What practical consequences does the reform of arbitration law have for companies?
For companies, the simplified, technology-neutral formal requirements, the possibility of English-language proceedings and the proposed digital forms of procedure may be particularly relevant. This may be significant above all in cross-border contractual relationships and international disputes.
Assessment by MTR Legal Rechtsanwälte
The planned modernization of arbitration law concerns central issues of dispute resolution in national and international business relationships. Particularly in the case of arbitration agreements, cross-border proceedings and court disputes in the context of arbitration matters, a precise assessment of the respective procedural situation is essential.
MTR Legal Rechtsanwälte supports companies, investors and high-net-worth private individuals in complex judicial and extrajudicial disputes. Further information can be found under legal advice in litigation.
