A paper has been released highlighting the key issues behind plans to modernize arbitration law in Germany, with the ultimate aim of bolstering the country’s reputation as a destination for settling arbitration disputes.
There are a number of advantages to resolving disagreements before an arbitration panel instead of a court, particularly in the context of international trade disputes, where it is often easier, for instance, to enforce an award or finding of an arbitration tribunal than a court ruling. It is with this and other considerations in mind that the German government is proposing to strengthen the country’s position as a location for hearing arbitration proceedings, reports commercial law firm MTR Legal Rechtsanwälte.
In order to press ahead with these plans to modernize German arbitration law and adapt it to today’s needs, the Federal Ministry of Justice produced a key issues paper in April of this year with proposals to amend the country’s arbitration laws in response to the ongoing digitalization of procedural law and, crucially, to address developments in commercial arbitration, both internationally and domestically.
The Justice Department’s recommendations cover twelve key points, including plans to allow for freedom of form in commercial arbitration agreements, which would no longer be subject to any specific requirements relating to form going forward.
There are also plans to improve the transparency of decisions in commercial arbitration and to promote judicial development of the law. Provided both parties are on board, it will also be possible to publish arbitration rulings.
Additionally, the proposals addressing the digitalization of procedural law will make it easier to conduct oral hearings of arbitration courts either partially or entirely as a video conference.
Arbitration proceedings may be followed by proceedings for the issue of an annulment or a declaration of enforceability, i.e., national courts annul the arbitration ruling or declare it enforceable. To this end, it should be possible to submit the arbitration ruling and other documents from the arbitration proceedings to the court in English.
In order to strengthen the integrity of arbitration proceedings, there are also plans to create a legal pathway for challenging domestic arbitration rulings that are final. This remedy will be available if the ruling suffers from such significant defects that an action for restitution would be warranted against a comparable court judgment.
Furthermore, in the event that a foreign arbitration tribunal prescribes measures for interim legal protection, it will be possible for the courts to approve the implementation of these measures in Germany.
While no draft legislation has been made available as of yet, the hope is that the planned modernization will make arbitration proceedings more attractive.
The team at MTR Legal Rechtsanwälte includes experts in litigation and arbitration.
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