Germany's federal cabinet approved a series of amendments on Wednesday aimed at modernising the country's arbitration law. The changes, which come in the form of a draft bill put forward by the Justice Ministry, are intended to strengthen Germany's arbitration tribunals as a venue for resolving disputes outside the court system.
Among the key measures, video hearings before arbitration tribunals and electronically issued arbitration awards will be explicitly permitted under the new framework. The Justice Ministry said this was designed to enable faster and more resource-efficient proceedings.
Arbitration tribunals are part of the system of out-of-court dispute resolution. In such proceedings, a neutral third party rules on a dispute between the parties involved, and that ruling is binding, carrying the same legal weight as a judgment from a state court. These mechanisms are particularly common in commercial and trade disputes, and a number of arbitration tribunals operate under the auspices of chambers of commerce and industry.
Because many international arbitration proceedings are conducted in English, the reforms will also allow English-language documents to be submitted to state courts that are handling related matters, for example, where a party is seeking to have an arbitration award set aside. State courts will still retain the right to request a translation of documents where necessary.
Additional simplifications to how decisions are published are also included in the package, with the aim of improving transparency across the arbitration system.
Justice Minister Stefanie Hubig (SPD) said arbitration played an important role in German economic life, and that the legislation would advance the law in order to consolidate Germany's attractiveness as an arbitration location. "In doing so, we are relying on greater transparency, more flexible formal requirements, digital solutions, and openness to proceedings in the English language," she said.
The draft bill approved by the cabinet is largely identical to a version put forward during the previous legislative term. That earlier bill could not be enacted due to the early collapse of the government, but it has now been revived and taken forward by the current administration.
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