On 28 January 2026, the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) published a draft bill for an Act to Modernize German arbitration law (You can find the German text of the draft bill here). The draft bill takes up a planned reform of German arbitration law dating back to the previous legislative period (see our article of 5 July 2024) and develops earlier drafts. Its aim is to align German arbitration law with international developments, digitalisation, and the needs of modern arbitration practice, while enhancing Germany’s attractiveness as an arbitration venue.
Introduction
More than 25 years after German arbitration law underwent a thorough reform in the 10th Book of the Code of Civil Procedure (Zivilprozessordnung, “ZPO”), the draft bill now proposes amendments aimed at aligning it with current international standards and keeping pace with advancing digitalisation. In doing so, the draft bill revisits a legislative proposal (see our article of 5 July 2024) that was well on the way to completion by the end of the 20th legislative period but was ultimately left unfinished. The stated aim of the draft bill remains to enhance Germany’s attractiveness as a dispute resolution forum, not least through a measured modernization of arbitration law.
The Provisions in Detail
This aim is to be achieved primarily by bringing arbitration law up to date and aligning it more closely with international standards. The proposed amendments focus in particular on increasing efficiency, promoting digitalisation, and enhancing the transparency of arbitral proceedings. Specifically, the following changes are planned:
Under the proposal, arbitration agreements will no longer need to be concluded in writing; instead, they may also be concluded by other means of communication, in particular electronic communication (draft section 1031(1) ZPO). Unlike the earlier draft bill – which was widely criticised in this regard – the requirement that the arbitration agreement be documented is retained. This approach is to be welcomed, as documentation serves an important evidentiary function and helps to avoid uncertainty as to whether an arbitration agreement exists. Oral arbitration agreements therefore remain excluded.
- Arbitral proceedings may be conducted as video hearings (draft section 1047 ZPO), unless the parties have agreed otherwise. This provision is clarificatory in nature (video hearings are already permitted under current arbitration law) and is therefore to be welcomed.
- Arbitral awards may be issued in electronic form (draft section 1054 ZPO). This change is far-reaching and is intended to make arbitral proceedings more efficient, less resource-intensive, and faster. It remains to be seen whether electronic awards will gain acceptance in practice. At least in an international context, where the award will probably need to be enforced abroad, parties are likely to object to the award being issued solely in electronic form.
- Documents may be submitted in English, including in proceedings for the recognition and enforcement, or the setting aside, of arbitral awards. The competent court will only be able to require a translation in individual cases where this is necessary (draft section 1063b ZPO).
- Proceedings for the recognition and enforcement, or the setting aside, of arbitral awards, as well as the other proceedings listed in section 1062(1) ZPO, may be conducted entirely in English where they are brought before a commercial court and the parties (tacitly) agree to this (draft section 1063a ZPO). It will also be possible for any subsequent appeals before the Federal Court of Justice to be conducted in English (section 1065(3), (4) ZPO).
- The federal state governments will be empowered to establish, by ordinance, the jurisdiction of the commercial courts for the proceedings specified in section 1062(1) ZPO. The draft bill thus responds to a demand that had already been expressed at the time the commercial courts were introduced. Given that proceedings can most readily be conducted entirely in English before the commercial courts, the proposed expansion of their jurisdiction is a logical step.
The draft bill also contains further noteworthy (arbitration-friendly) provisions:
Courts must allow the enforcement of interim measures ordered by arbitral tribunals unless certain exceptions apply (draft section 1041 ZPO). This proposal is to be welcomed, as it removes existing uncertainties and provides greater legal certainty.
- Dissenting opinions will generally be admissible unless the parties have agreed otherwise (draft section 1054a(1) ZPO).
It will be possible to publish arbitral awards (with the parties’ consent) and court decisions in set-aside and enforcement proceedings, with a view to increasing transparency (draft section 1054b ZPO). The proposal to allow the publication of arbitral awards should be viewed critically. Although the proposed requirement of the parties’ consent is likely to protect their legitimate interest in confidentiality, it is unlikely to lead to a significant increase in the publication of arbitral awards.
Conclusion
By expressly authorising electronic forms of communication for the conclusion of arbitration agreements, video hearings, electronic arbitral awards, and English-language proceedings, the draft bill provides clear impetus for greater efficiency, global reach and practical relevance – key factors in strengthening Germany as an arbitration hub. The improved enforceability of interim measures issued by arbitral tribunals, the admissibility of dissenting opinions, and the consent-based publication of decisions will enhance legal certainty and transparency. Taken together, these changes are a tangible push towards modernization, enhancing Germany’s attractiveness as venue for arbitration; their full effect, however, will depend on consistent implementation in case law and court organisation, as well as acceptance in practice.
Forward
