Background

Germany is again seeking to modernise its arbitration framework. On 27 January 2026, the Federal Ministry of Justice and Consumer Protection published a ministerial draft act for a Law on the Modernisation of Arbitration Law (Gesetz zur Modernisierung des Schiedsverfahrensrechts). The draft proposes to amend key arbitration-related provisions of the German Code of Civil Procedure (ZPO). The reform is not yet in force. Further legislative steps remain necessary, and under Article 5 of the draft, the new rules would enter into force four weeks after promulgation.

The current proposal follows an earlier reform initiative from the previous legislative period that was discussed in 2024, but not enacted. The explanatory memorandum presents the new draft as a targeted modernisation of German arbitration law designed to strengthen Germany’s position as an internationally competitive arbitration venue. Its core themes are clear: fewer formal barriers, greater digital usability, and a more effective interface between arbitral tribunals and state courts. The draft also builds on developments already introduced on the court side, in particular the commercial court framework now available in parts of the German court system.

1. English-language court support for arbitration

A central proposal is the introduction of English-language court proceedings in arbitration-related matters through proposed sections 1063a, 1063b, and 1065 of the draft German Code of Civil Procedure (ZPO-E). In designated cases under section 1062(1) ZPO, proceedings before a commercial court of a higher regional court can be conducted in English if the statutory requirements are met, and in appropriate circumstances legal appeals before the Federal Court of Justice can also proceed in English. The draft further provides that English-language arbitration documents may generally be submitted without translation, unless a translation is needed in the individual case. The explanatory memorandum highlights the resulting reduction in translation costs and procedural friction.

This proposal is directly linked to rules that already apply in state court litigation. The general rule remains that the language of the court is German, but English-language proceedings are now also allowed before designated commercial courts. The draft extends this internationalisation to arbitration-related court proceedings and thereby addresses one of the practical objections that has historically weighed against Germany as a seat.

Why this matters: If enacted, the reform would make a German seat more attractive in cross-border cases by reducing mandatory translations and allowing court support to operate in English.

2. Modernised form requirements for arbitration agreements

Proposed section 1031(1) ZPO-E would modernise the form requirements for arbitration agreements. The current wording still refers to faxes and telegrams. The draft replaces that formulation with a technology-neutral standard under which an arbitration agreement must be concluded or documented in writing or by any other means of communication that permits subsequent access to the information. The explanatory memorandum links this expressly to Option I of Article 7 of the 2006 UNCITRAL Model Law and to Article 3(c) of the 2005 Hague Convention on Choice of Court Agreements.

The proposal fits into the broader evolution of German procedure away from paper-centred processes. It is intended to ensure that arbitration agreements remain compatible with the digital contracting methods already used in modern commerce. At the same time, the proposal retains a form requirement and does not move as far as Option II of Article 7 of the UNCITRAL Model Law. Transitional provisions in proposed section 37c of the draft Introductory Act to the German Code of Civil Procedure would preserve the applicable law for arbitration agreements concluded before the reform comes into force.

Why this matters: The draft would materially reduce formal-risk arguments against arbitration clauses concluded through modern digital contracting processes.

3. Video hearings and electronic awards

The draft also strengthens the digital operation of arbitral proceedings. Proposed sections 1047(2) and (3) ZPO-E would expressly authorise hearings by audiovisual transmission after consultation with the parties, unless the parties have agreed otherwise. Proposed section 1054(1) ZPO-E would permit awards in electronic form, provided no party objects, with the award to be signed using qualified electronic signatures. Under section 1054(5) sentence 2 ZPO-E, any party could still request that an electronic award also be transmitted in paper form. The explanatory memorandum makes clear that the right to object is intended, among other things, to preserve simpler enforcement abroad where necessary.

These proposals mirror developments already familiar from state court procedure. Video hearings are already recognised in litigation under section 128a ZPO, and section 130b ZPO already allows court decisions to be issued electronically with qualified electronic signatures. The draft therefore seeks to bring arbitration into line with digital tools that are already established on the court side rather than creating a wholly separate model.

Why this matters: The reform would support a more seamless digital process from arbitration agreement to hearing to award, while preserving a paper fallback where enforcement strategy requires it.

4. More effective court support for interim measures

One of the most practically important proposals concerns interim relief. Proposed section 1025(2) ZPO-E would extend the territorial reach of section 1041(2) to (4) sentence 1 ZPO-E and thereby clarify that interim or protective measures ordered by tribunals seated abroad, or before the seat has been determined, may also be enforced in Germany. The explanatory memorandum states expressly that the availability of such enforcement under current law has been disputed.

Proposed section 1041(2) ZPO-E would also replace the court’s current discretion with a rule-based framework. Enforcement would have to be granted unless one of the statutory grounds for refusal applies. These grounds are modelled on Article 17I(1) of the 2006 UNCITRAL Model Law and include, among other things, annulment-type defects by reference to section 1059(2) ZPO, prior recourse to a German court for equivalent relief, failure to provide ordered security, and revocation or suspension of the measure by the tribunal. The explanatory memorandum also makes clear that there is to be no review of the merits of the measure.

This proposal is best understood against the background of state court litigation, where interim protection is already a central judicial function. Arbitration depends more heavily on effective court support. The draft would reinforce that support role and thereby improve the practical value of arbitral interim relief. At the same time, the draft does not codify the emergency arbitrator, so parties requiring urgent pre-constitution relief will still need to consider whether institutional mechanisms are sufficient or whether recourse to state courts under section 1033 ZPO remains preferable.

Why this matters: If enacted, the reform could make Germany materially more attractive as a seat and support jurisdiction in disputes where effective interim protection is commercially critical.

5. Less passive confidentiality: Publication of arbitral awards and dissenting opinions

The draft would also increase transparency in two important respects. Proposed section 1054a ZPO-E would expressly permit dissenting opinions (Sondervotum) unless the parties agree otherwise. Proposed section 1054b ZPO-E would allow publication of awards and dissenting opinions in anonymised or pseudonymised form, subject to an opt-out mechanism under which consent is deemed given if a party does not object within three months after being informed of that consequence. The parties would remain free under section 1054b(2) ZPO-E to exclude publication altogether or to impose conditions.

This is an area where the draft moves arbitration somewhat closer to the logic of state court proceedings. Court judgments are part of a public justice system and contribute to legal development through publication. Arbitration has traditionally offered a more confidential forum. The draft does not erase that difference, but it narrows it and makes confidentiality more of an active drafting and case-management issue.

Why this matters: Parties who value confidentiality should address publication and, where relevant, dissenting opinions expressly, rather than relying on statutory defaults.

6. Finality remains central, but not absolute

The most sensitive proposal is likely to be the new restitution application (Restitutionsantrag) in proposed section 1059a ZPO-E. This would allow an award to be challenged even after expiry of the ordinary three-month period under section 1059(3) ZPO, subject to a one-month period from knowledge of the relevant ground and an absolute cut-off after five years from finality. The proposed grounds are closely modelled on section 580 ZPO and include forged documents, false testimony, criminal misconduct, later annulment of a judgment or award on which the award was based, discovery of an earlier final judgment or award in the same matter, and discovery of a decisive document. For the criminal-law-based grounds, the draft follows the logic of section 581(1) ZPO.

The explanatory memorandum makes clear that the proposal is intended to create as much parallelism as possible between the treatment of court judgments and arbitral awards in cases of especially serious defects. That is a notable doctrinal signal. Finality remains a hallmark of arbitration, but the draft would qualify it by importing an exceptional corrective mechanism already familiar from ordinary civil procedure.

Why this matters: Restitution applications are likely to remain exceptional, but parties choosing arbitration for speed and finality should watch this proposal closely because it goes directly to the balance between stable finality and exceptional judicial correction.

Practical implications

Although the draft is not yet law, clients may wish to begin reviewing arbitration clauses now.

• Review existing arbitration clauses. Consider whether your standard arbitration clauses should be updated to address new options, such as specific drafting choices relating to English-language court support, video hearings, electronic awards, publication of awards, dissenting opinions, and multi-party appointments.
• Assess digital contracting practices. The modernised form requirements provide an opportunity to streamline contract execution processes. Ensure that your digital contracting platforms create records that allow subsequent access to the information as required by proposed section 1031(1) ZPO-E.
• Establish internal processes for publication requests. Parties who value confidentiality should consider putting internal processes in place to monitor publication requests, since silence under the draft may amount to consent.
• Consider the seat of arbitration. The reforms would significantly enhance Germany’s attractiveness as an arbitration seat. Key advantages would include English-language court proceedings before commercial courts, streamlined enforcement of interim measures (including from foreign-seated tribunals), and alignment with modern digitalisation standards. Commercial courts have already been established in Baden-Württemberg, Bavaria, Berlin, Bremen, Hamburg, Hesse, Lower Saxony, North Rhine-Westphalia, and Saxony. The practical value of these reforms will depend on judicial expertise in arbitration-related matters. Many higher regional courts – notably Munich, Frankfurt, Hamburg, and Düsseldorf – already have established arbitration senates with significant experience; parties should consider this factor when selecting the seat or anticipating ancillary proceedings.

Conclusion

The proposed modernisation of German arbitration law represents a significant step forward for Germany as an arbitration venue. By embracing digitalisation, permitting English-language proceedings, and aligning with international standards, the reform addresses longstanding practical concerns and positions Germany more competitively alongside leading arbitration jurisdictions.

We will continue to monitor the legislative process and provide updates as the reform progresses. If you have questions about how these changes may affect your arbitration agreements or disputes, please do not hesitate to contact us.

Client Alert 2026-73