Globalisation of court proceedings through so-called commercial courts

With increasing cross-border trade, the globalisation of legal dealings is becoming increasingly widespread as well. There is, therefore, an urgent need for a contemporary justice more accessible for international actors. The publication of the "Key points of the German Federal Ministry of Justice for strengthening the courts in economic disputes and for introducing commercial courts" is a first step in the right direction. Thus, Germany is now facing up to the requirements for a global player in its legal system as well.

The language of court in Germany is German. Pleadings, therefore, must be drawn up in German. In fact, evidence may be submitted in its original language. The court, however, may require a translation. Court proceedings are in principle conducted in German as well. In order to counter-act an "escape" of companies to other jurisdictions and arbitrations, several higher regional courts and regional courts have included English-language chambers in the schedule of responsibilities since 2010, for instance, in Hamburg, Frankfurt am Main or most recently in 2021 in Berlin as well. These pilot projects, however, have failed to gain acceptance. Plans for introducing so-called commercial courts are now presented throughout Germany for the first time with the key points published on 16 January 2023. Thereby, the justice and business location Germany should be sustainably strengthened and the challenges of a globalised world with international trade and commerce should be met.

Proceedings conducted in English

The innovations do not only provide for the introduction of so-called commercial courts. Pursuant to the key point paper, the German federal states should also be able to provide that certain trade disputes can be conducted completely in English before selected regional courts. It should also be possible that appeals and complaints are negotiated completely in English at the higher regional courts. For this purpose, special senates should be set up.

So far, the German Courts Constitution Act provides that the court language is German. If it is negotiated with the participation of persons who have no command of the German language, an interpreter has to be involved. The involvement of an interpreter may only be omitted if all persons participating in the process have a sufficient command of the foreign language and agree.

There is so far the possibility to hold an oral hearing in English under the aforementioned conditions. Pleadings, protocols, and decisions, however, necessarily must be drafted in German. There is no exception. In the future, it should not only be possible that proceedings are held in English. It should also be possible that pleadings are submitted in English. This also facilitates the examination of English-language evidence such as contracts. Neither the contract itself nor the essential passages must be translated in the pleading. This immensely simplifies, for instance, the interpretation of contractual provisions.

Commercial courts

First instance special senates (so-called commercial courts) should be set up at the higher regional courts for large scale economic disputes. These commercial courts can be addressed directly from a threshold of an amount in dispute of one million euros, for instance, and if all parties agree. Then, the parties may skip the regional court as an instance and litigate directly at the commercial court. The commercial courts are composed of judges who have a very good command of English. For the proceedings before commercial courts, the possibility should in addition be given to prepare a verbatim record, as it is already known from the arbitration. The parties should already be able to read this verbatim record in the proceedings.
It should be possible to lodge an appeal before the German Federal Court of Justice (BGH) against the decision of the commercial courts. If the proceedings before a commercial court are conducted in English, comprehensive proceedings in English should also be possible - in agreement with the responsible senate of the BGH.

The enforceability of English decisions of the regional courts as well as of the commercial courts and of the BGH should be ensured by means of translations into German. In order to facilitate the further development of the law, the translations should also be published.

Video hearings

During the corona pandemic, online court proceedings were increasingly conducted. A first step towards the modernisation of court proceedings already became evident here. The use of video conferencing technology has already proven its worth. Therefore, its use and distribution should now not be scaled back again. The objective is to extend online proceedings in the ordinary jurisdiction as well as in the specialised jurisdiction, to make them more flexible and, above all, to make them more practicable.

Protection of business secrets

In the future, business secrets should receive more extensive protection than before in civil proceedings. This is to be achieved by extension of the rules of procedure of the German Trade Secret Protection Act (Geschäftsgeheimnisschutzgesetz) to all civil proceedings. Court proceedings are in principle open to the public in Germany. So far, the general public could only be excluded in the course of a court hearing if an important business secret was discussed. In the future, it should be possible to advance the protection of business secrets to the time the action is filed. It should not be possible to use or disclose information classified as confidential outside court proceedings.

Remarks

The proposals of the German Federal Ministry of Justice to strengthen the courts in economic disputes are to be welcomed. Their legislative implementation is open, however, desirable. So far, the ordinary jurisdiction in Germany offers few contemporary process instruments for large international economic disputes Key problems such as the recognition of German judgments in part not existing in third countries so far - in particular China - should also be addressed in this context through diplomatic channels.

Moritz Kopp LL.M.
Chiara-Lucia Peterhammer