[co-author: Dr. Jonas Fritsch, LL.M.]
Key takeaways
Germany has resumed the legislative process for the long-awaited reform of its arbitration law following its interruption in the previous, shortened parliamentary term.
The proposed reform is in line with Germany's efforts to strengthen its position as a competitive and modern arbitration venue. The draft aligns Germany's arbitration law with modern international arbitration practice.
Greater flexibility in the formation of arbitration agreements, clearer statutory recognition of digital tools, expanded use of English in arbitration-related court proceedings, and more structured judicial support are all likely to influence how parties design arbitration clauses and conduct proceedings in Germany and enhance the attractiveness of German-seated arbitrations.
Germany stands as a major economic powerhouse in Europe but has not historically been the continent's foremost arbitration hub. Over the last decades, however, German-seated arbitrations have grown in numbers and importance, and the German Arbitration Act in force since 1998 has proven largely effective. To reinforce Germany's position as a leading arbitration venue, and to respond to evolving international practice, a modernisation of the German Arbitration Act has been in discussion for several years. The legislative process had been well advanced in 2024 but was interrupted by the premature end of the previous parliamentary term. On 27 January 2026, the Federal Ministry of Justice (BMJV) re-initiated this legislative process and published a draft bill for a comprehensive modernisation of Germany's arbitration regime, which builds on the 2024 proposal. This article outlines the key elements of the proposed reform and briefly identifies the adjustments vis-à-vis the 2024 version.
The proposed reform focuses on five core areas: enhanced transparency, flexibilization of form requirements, digitalisation, expanded use of the English language, and strengthened court support for arbitration.
1. Enhancing transparency
Transparency is a cornerstone of the proposed reform, with an intention to respond to general calls for greater transparency in arbitration and bringing German law closer to international standards.
First, the draft foresees the publication of anonymised arbitral awards by the arbitral tribunal, provided the parties do not object (draft-§ 1054b of the German Code of Civil Procedure (ZPO)).
Second, decisions in annulment, enforcement, or recognition proceedings rendered by Commercial Courts will be subject to mandatory publication in anonymised form (draft-§ 1063a (3) ZPO). Currently, only selected decisions are published by German courts. Beyond enhancing transparency, this measure is intended to support the consistent development of case law in arbitration matters.
Third, the draft explicitly acknowledges the power of arbitrators to issue dissenting or concurring opinions (draft-§ 1054a ZPO). If the award is published, so will the dissenting opinion (draft-§ 1054b (1) ZPO). Such opinions are already common in practice. Their explicit statutory recognition is not intended to make them the norm but rather to reassure arbitrators that they can express differing views when necessary, without worrying about breaching procedural ordre public. It may also provide further insight into arbitral decision-making and contribute to the further development of arbitration-related case law.
2. Flexibilization of form requirements
A key amendment concerns the form of arbitration agreements. Under the proposed rules, arbitration agreements for commercial transactions will no longer need to be concluded strictly in writing but may also be formed through other means of communication, provided the agreement is permanently documented in a way that allows the information to be reproduced at a later stage (draft-§ 1031 (1) ZPO).
This approach reflects a recalibration compared to the 2024 draft, which had dispensed entirely with any form requirements for commercial transactions (adopting Option II of Article 7 of the UNCITRAL Model Law on International Arbitration (2006)) and limiting formal requirements to consumer contracts only. The current proposal preserves a liberal approach while still relying on the evidentiary function of form requirements (guided by Option I of Article 7 of the UNCITRAL Model Law on International Arbitration (2006)). In contrast to the 2024 draft, oral agreements alone without any supporting documentation are therefore not sufficient. It is, in any case, advisable to carefully document the arbitration agreement for evidentiary purposes in later disputes, e.g. in writing, or in an exchange of emails or other messages.
3. Digitalization of proceedings
The reform also provides statutory legal certainty for the modern practice of arbitration proceedings. The common practice of remote, virtual hearings is now expressly permitted (draft-§ 1047 (2) ZPO). They can take place even if one party objects provided that due process and the parties' right to be heard are upheld.
Further, arbitral awards may be issued electronically (draft-§ 1054 (1) second sentence ZPO), while an additional hard copy of the award can be requested (draft-§ 1054 (5) second sentence ZPO), e.g., to address potential enforcement challenges in certain jurisdictions.
4. Use of English in German court proceedings
Acknowledging the central role of English in international arbitration, the draft introduces significant language-related innovations for arbitration-related court proceedings. This creates meaningful synergies between the modernisation of arbitration law and the recent introduction of Commercial Courts for large-scale litigations, reinforcing Germany's ambition to offer an internationally accessible forum for complex disputes.
Proceedings before Commercial Courts will be conducted entirely in English in accordance with the applicable rules for the Commercial Courts established by the German Bundesländer (draft-§ 1063a ZPO). Even their appeal proceedings at the German Supreme Courts will be conducted entirely in English upon request granted by the Senate (draft-§ 1065 (3) and (4) ZPO).
In proceedings conducted in German documents may be submitted in English without the need for translation unless the court specifically requires one (draft-§ 1063b ZPO).
5. Improved court support
The draft also introduces several measures aimed at strengthening and streamlining court support provided in arbitration proceedings.
First, the draft enhances court support for interim measures ordered by arbitral tribunals. The current discretion for enforcement of interim measures ordered by German-seated tribunals is replaced with specific grounds for refusal. The draft also clarifies that arbitral interim measures ordered by foreign seated tribunals or where the seat is not yet determined can be recognized and enforced in Germany (draft-§ 1041 (2) ZPO and draft-§ 1025 (2) ZPO). This strengthens the effectiveness of arbitral interim relief and increases the parties' options in time-sensitive situations when interim measures are to be enforced in Germany. Parties can now obtain enforceable interim relief from the tribunal already handling their dispute instead of initiating new parallel court proceedings for interim relief in Germany.
Second, the draft foresees an express statutory mechanism for the appointment of arbitrators in multi-party arbitrations. In case multiple parties on the same side of the dispute fail to jointly appoint an arbitrator, the other party or one of the multiple parties can request the competent Higher Regional Court to appoint the arbitrator (draft-§ 1035 (4) ZPO).
Third, the draft allows courts to comprehensively review and correct decisions by arbitral tribunals that have declined jurisdiction (draft-§ 1040 (4) ZPO). Under the current framework, awards declining jurisdiction may only be challenged on the limited grounds of set-aside proceedings under § 1059 ZPO, which currently does not foresee grounds to argue that the arbitration agreement is in fact valid. By contrast, partial awards affirming jurisdiction may be comprehensively reviewed under § 1040 (3) ZPO. The proposed change aligns the scope of review of jurisdictional decisions and provides the parties an effective recourse where a tribunal incorrectly refuses to hear a case.
Finally, the reform introduces a new basis for challenging arbitral awards through an action for restitution (draft-§ 1059a ZPO). Mirroring remedies available against court judgments, this mechanism applies only in truly exceptional circumstances, where an award has been fraudulently obtained, such as through bribery or serious procedural misconduct. It remains available after expiry of the deadline for a set-aside application under § 1059 ZPO, but only if the party could not have raised the issue in earlier proceedings.
Conclusion
The proposed reform of the German Arbitration Act represents a targeted modernisation of a framework that has been in place for more than 25 years. By aligning German arbitration law more closely with current international practice – particularly with regard to digital proceedings, transparency, and court support – and at the same time remaining closely aligned with the UNCITRAL Model Law, the draft is likely to enhance attractiveness of German seats for arbitrations and influence both the drafting of arbitration clauses and the conduct of arbitration proceedings.
The legislative process is ongoing, and further refinements may be made before the bill is enacted. We are closely tracking these developments and are available to provide tailored advice on how the reform may affect your business or arbitration practice.
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