Modernization of Arbitration Law in Germany: A Step Toward Strengthening International Legal Attractiveness

Germany is taking significant steps to update its arbitration law in order to enhance the country’s attractiveness as a venue for resolving international commercial disputes. In the face of growing competition among jurisdictions offering efficient and user-friendly arbitration procedures, the German legislature aims to modernize the legal framework while preserving traditional principles of legal certainty and predictability.

According to a reform draft initiated by the Federal Ministry of Justice, several substantial amendments are planned to be introduced into the Arbitration Act (Zivilprozessordnung, ZPO). Key innovations include:

• Abolishing the mandatory written form for arbitration agreements in the B2B sector. In the future, such agreements can be concluded in any form, including electronic, provided both parties are entrepreneurs. This aims to simplify the arbitration process and align the legislation with the practice of modern international transactions.

• Allowing electronic execution of arbitration awards. Arbitration awards may be signed with a qualified electronic signature by the arbitrators, reflecting the trend toward digitalization and reducing administrative costs.

• Publication of arbitration awards. If no objections are raised by the parties within three months, arbitration awards can be published. This contributes to greater transparency of arbitration practice and the development of precedents, which is especially important for enhancing legal certainty.

Experts believe these measures will increase Germany’s competitiveness compared to major international arbitration centers such as Paris, London, and Singapore. The reform also demonstrates the German legal system’s commitment to adapting to digital realities and the needs of global business.

The legislative changes are expected to be adopted by the end of 2025.