Back on the Agenda: Germany’s Renewed Push to Modernise its Arbitration Law

On 27 January 2026, the German Federal Ministry of Justice published a draft bill to modernise the German arbitration law (the 2026 Proposal) with a view to strengthening Germany’s attractiveness as a seat of arbitration. The 2026 Proposal seeks to adopt the internationalisation, digitalisation and developments that have shaped the arbitral practice over the past decades. It reflects that arbitration proceedings seated in Germany are increasingly used to resolve cross-border disputes and are therefore more frequently conducted in English and in digital or hybrid formats.

The 2026 Proposal revives the reform initiative launched in February 2024 (the 2024 Proposal), which stalled following the premature collapse of the “traffic light” coalition at the end of that year. While largely building on the reform package proposed in 2024 which we discussed in our client briefing, the new draft responds to criticism raised during the consultation process, introducing targeted adjustments and refinements.

This post highlights four key areas in which the 2026 Proposal would change the current law, should it be enacted in its current form, and concludes with a brief outlook.

I. The arbitration agreement – introducing a Model Law‑style record requirement

The most significant change compared to the 2024 Proposal concerns the formal requirements for arbitration agreements. Under the current law, arbitration agreements must be concluded in text form, a requirement that the 2024 Proposal would have relaxed significantly by reintroducing arbitration agreements without any formal requirement for commercial transactions (Handelsgeschäfte).

This approach attracted considerable criticism during the 2024 consultation process. Stakeholders pointed to the legal uncertainty and tactical challenges that could arise from purely oral arbitration agreements, as well as to the fact that  international parties will rarely be familiar with the German commercial law concepts underlying the 2024 Proposal. In response, the 2026 Proposal introduces a Model Law-style record requirement instead.

Pursuant to the revised Section 1031(1) of the German Code of Civil Procedure (Zivilprozessordnung; ZPO), an arbitration agreement must be documented by any means of communication that provides a record of the agreement. This expressly accommodates modern contracting practices, including email correspondence, electronic platforms and messaging applications, provided that the agreement can be accessed and reproduced. By contrast, purely oral arbitration agreements without any form of documentation would, contrary to the 2024 Proposal, no longer be sufficient.

While the revised approach significantly reduces the risk of uncertainty compared to the 2024 Proposal, parties would nevertheless be well advised to continue ensuring that arbitration agreements are clearly documented in written form or in an email exchange. Doing so remains the most effective way to avoid disputes over jurisdiction and to prevent delays at the outset of arbitral proceedings.

II. Digitalisation of proceedings: remote hearings and electronic awards, with right to request a written award

The 2026 Proposal continues the approach taken in the 2024 Proposal by facilitating arbitral proceedings in the digital sphere, especially by providing greater clarity regarding the tribunal’s powers in connection with remote hearings. Amendments to Section 1047(2) and (3) ZPO would expressly grant arbitral tribunals the discretion to order hearings to be conducted remotely, unless the parties have agreed otherwise. This confirms that a tribunal may insist on a virtual format despite a party’s objection, provided that the parties’ right to be heard and other due process requirements are respected.

Under the 2026 Proposal, arbitral awards may be issued in electronic form (Section 1054(1) ZPO). Following criticism of the 2024 draft for failing to provide an express entitlement to a paper version of the award, the 2026 Proposal introduces a right for each party to request that the award also be provided in written form (Section 1054(5) ZPO). This is intended to preserve the efficiency gains of electronic awards while mitigating enforcement risks in certain jurisdictions.

III. Arbitration-related court proceedings

The changes to arbitration-related court proceedings already proposed in the 2024 draft are largely retained in the 2026 Proposal, confirming their continued relevance for Germany as a seat of arbitration. These measures are intended to improve accessibility for international users of the German system and to align German court practice more closely with international standards.

1. Arbitration-related litigation in English

The 2026 Proposal envisages a significant expansion of English-language arbitration-related litigation before German courts . Certain proceedings – most notably setting-aside and enforcement proceedings – could be conducted entirely in English before the newly introduced Commercial Courts at the Higher Regional Court level. In addition, appeals to the Federal Court of Justice (FCJ) may also be conducted in English, provided that (i) the underlying arbitration-related court proceedings were conducted in English, (ii) the appellant so requests, and (iii) the FCJ approves the request.

2. Enforcement of interim measures issued by foreign tribunals

The 2026 Proposal further strengthens the enforceability of interim measures issued by arbitral tribunals seated abroad, or with a place of arbitration not yet determined. Amendments to Sections 1025(2) and 1041(2) ZPO would remove the existing discretion of German courts in this regard and provide for the direct enforceability of such interim measures. By allowing interim measures issued by arbitral tribunals to be enforced in Germany regardless of the seat, it encourages claimants to seek urgent relief directly from the arbitral tribunal already seized of the dispute – thus avoiding parallel court proceedings.

3. Judicial review of negative jurisdictional decisions

The 2026 Proposal introduces a new right of recourse against negative decisions on jurisdiction rendered by arbitral tribunals. Under the new Section 1040(4) ZPO, a party would be entitled to seek a court review where a tribunal declines jurisdiction, addressing a long-standing asymmetry in the current regime and enhancing legal certainty at an early stage of the proceedings.

4. Extraordinary recourse against final awards: retrial in exceptional cases only

German arbitration law is firmly based on the finality of arbitral awards, which are binding and not subject to a review on the merits. The 2026 Proposal expressly maintains this principle, but – recognising that exceptional cases of serious procedural injustice may arise – introduces a narrowly circumscribed extraordinary remedy in the form of a retrial (Restitutionsantrag) against arbitral awards (new Section 1059a ZPO). 

While the corresponding provision in the 2024 Proposal raised concerns that the proposed retrial mechanism could unduly weaken finality, the 2026 Proposal significantly tightens and clarifies its scope. A retrial would be available only in rare circumstances aligned with the restitution grounds applicable to court judgments. For example, a retrial would be available if an award is based on forged documents or criminal misconduct, and only where the grounds could not have been raised earlier. In doing so, the 2026 Proposal confirms that arbitration in Germany remains a single-instance procedure, with post-award recourse confined to truly exceptional cases.

IV. Transparency tools: dissenting opinions and publication of awards

The transparency tools introduced in the 2024 draft – namely an express statutory basis for dissenting opinions and a default regime for the publication of anonymised awards – are largely retained in the 2026 Proposal, albeit with targeted adjustments in response to practical concerns.

Under the 2026 Proposal, a new Section 1054a ZPO would expressly confirm that members of a three-member tribunal may issue dissenting or concurring opinions, subject to party agreement, thereby codifying a long-standing practice that has recently been questioned both by courts and legal scholars. Compared to the 2024 Proposal, the procedural obligation for a dissenting arbitrator to notify the co-arbitrators in advance has been softened: what was previously formulated as a mandatory requirement is now a non-binding “should” provision. Any failure to notify them in advance will not provide grounds for setting‑aside applications.

The publication of awards and dissenting opinions in anonymised or pseudonymised form is likewise addressed in the 2026 Proposal through the introduction of a new Section 1054b ZPO. Consent is deemed given unless a party objects following a request by the tribunal. In response to concerns raised during the 2024 consultation process, the objection period has been extended from one month to three months to reflect the practical realities of complex disputes and internal approval processes.

The underlying approach remains unchanged: the mechanism is deliberately “opt‑out”, aimed at increasing the (currently very low) share of published commercial awards while preserving party autonomy and confidentiality. Parties wishing to exclude publication may opt out in advance, for example in their arbitration agreement or a procedural order.

Outlook

The 2026 Proposal represents a renewed and comprehensive effort to modernise German arbitration law for the first time in over 25 years. It builds on the key points addressed in the 2024 Proposal– digitalisation of proceedings, enhanced court support, English‑language litigation and greater transparency – while addressing concerns raised during the consultation process.

Looking ahead, for parties considering or involved in German-seated arbitrations, the 2026 Proposal will make it easier to conclude arbitration agreements in modern digital environments, further align German law with international standards, and reduce language-related barriers to arbitration-related litigation in Germany.

The consultation period for the 2026 Proposal is open until 27 February 2026. Subject to the successful completion of the legislative process, enactment can be expected by the end of 2026.

If adopted, the reform would further enhance Germany’s profile as a reliable and internationally accessible arbitral seat, particularly for complex cross-border disputes. We will continue to monitor the legislative process and share updates on further developments and practical implications.