Court In The Act: Germany's New Commercial Courts Challenge Arbitration's Dominance

Germany has introduced specialised international commercial court chambers at several courts across Germany following the enactment of the Act to Strengthen Germany as a Legal Venue (Gesetz zur Stärkung des Justizstandorts Deutschland). The reform, among other things, reflects a deliberate policy choice to narrow the gap between court litigation and arbitration by addressing the features that have traditionally driven international parties towards arbitral proceedings: language barriers, lack of specialised tribunals and procedural inflexibility. Germany is thereby positioning its state courts as a genuine alternative to institutional arbitration for cross-border commercial disputes.

A notable procedural feature of the reform is the option for parties to agree that the Higher Regional Court (Oberlandesgericht) acts as the court of first instance with only a single layer of appeal directly to the Federal Court of Justice (Bundesgerichtshof). This streamlined appellate structure