BMJV presents draft bill: Modernisation of arbitration law

On 27 January 2026, the BMJV presented a new draft bill on the modernisation of arbitration law. It builds on reform initiatives from the time of the traffic-light coalition, but also introduces new ideas. In particular, it provides for technology-neutral procedural requirements and a strengthening of the English language as the language of proceedings.

The modernisation of arbitration law based on a key points paper from 2023 failed. Even before the amendments could be debated in the Bundestag, the traffic-light coalition collapsed, which also signalled the end of the ongoing legislative process. On 27 January 2026, the Federal Ministry of Justice and Consumer Protection (BMJV) published a new draft bill (ZPO-E). The reforms proposed therein are intended to significantly strengthen Germany as an arbitration venue. But is the draft merely a rehash of its predecessor from the traffic light coalition, or does it provide fresh impetus?

Original key points paper from 2023

In a series of articles (here), we examined the traffic light coalition’s reform plans. Some of the changes planned at the time would certainly have promised practical benefits. For example, it was envisaged that English would be strengthened as the ‘lingua franca’ of international arbitration law. For state proceedings relating to arbitration cases, the requirement to submit evidence in German translation was to be waived under certain conditions, or the relevant proceedings were even to be permitted to be conducted entirely in English.

Other reform proposals, by contrast, would have had rather little practical value. For instance, the admissibility of video hearings was to be regulated by law, even though the parties to the proceedings can already agree to digital hearings under the existing regime – which remains in place today.

New impetus in 2026

The BMJV continues to believe that modernisation of German arbitration law is necessary. As the BMJV emphasises in its press release accompanying the draft, the changes now proposed are intended to take account of advancing digitalisation and further developments in the practice of arbitration. Furthermore, the reform is intended to complement the Act on Strengthening Germany as a Centre for Justice, which came into force in 2025, and to make Germany more attractive as a centre for justice. These are the key aspects that the draft bill aims to address:

1. Digitalisation of arbitration proceedings

According to the draft bill, video hearings are to be explicitly permitted in arbitration cases as well. In Section 1047(2) of the Draft Civil Procedure Code (ZPO-E), the legislature intends to provide that oral arbitration hearings may be conducted by means of audio-visual transmission. However, the parties must be informed of this in good time and consulted beforehand. Video hearings against the express wishes of the parties are not to be permitted. This is intended to align the rules for state courts (namely Section 128a of the ZPO) with those for arbitral tribunals. The provision is primarily of a clarifying nature, as video hearings are already possible and permissible at the parties’ request – and have long been widely used in practice in suitable cases.

Furthermore, the draft provides in Section 1054(1) and (2) of the ZPO-E that arbitral awards may also be issued electronically if they are qualifiedly signed electronically by the members of the arbitral tribunal. In practice, the easiest way to affix multiple electronic signatures to a document is likely to be via Docusign or similar services.

2. Documents and proceedings in English

In international arbitration proceedings, English is the standard language. However, in ancillary proceedings before German courts, such as for the setting aside or enforcement of the arbitral award, the language of the court is usually German. The draft bill provides for certain simplifications in this regard: Under Section 1063b of the Draft Civil Procedure Code (ZPO-E), documents may be submitted in English in German-language ancillary proceedings without the need for translation. The parties may even conduct proceedings in English in what are otherwise German-language ancillary proceedings if they have expressly or tacitly agreed to do so (see Section 1063a(2) ZPO-E). Such ancillary proceedings should also be able to be conducted before Commercial Courts – provided there is a corresponding provision in the relevant state regulation – though in such cases they must generally be conducted in English (see Section 1063a(1) of the Draft Civil Procedure Code). However, the parties should remain free to conduct the proceedings in German there as well, by express or implied agreement.

Appeal proceedings against decisions on annulment or enforceability should also be able to be conducted in English in future – though only if the original proceedings were conducted before the Commercial Court and in English, the conduct of the appeal proceedings in English is expressly requested, and the competent civil division of the Federal Court of Justice grants this request (see Section 1065(3) of the Draft Code of Civil Procedure).

These planned measures are intended as a logical continuation of the new provisions in the Act on Strengthening Germany as a Centre of Justice and are designed to contribute to the international competitiveness of German courts. However, as outlined, the draft contains a number of exceptions to the admissibility of proceedings conducted in English. These would mean that international parties could by no means rely on being able to continue English-language arbitration proceedings in English, even in state annex proceedings, up to the court of last instance.

3. Publication of arbitral awards

The publication of arbitral awards is not currently regulated by the ZPO. Following the example of provisions in some arbitration rules, the draft bill provides that the arbitral award – naturally after anonymisation or pseudonymisation – may be published with the consent of the parties (see Section 1054b(1) ZPO). For decisions in state annex proceedings, the draft goes a step further; it expressly stipulates in Section 1063a(3) of the ZPO-E that such decisions, where they originate from a Commercial Court, may not only be published but must be published – in anonymised form.

These planned amendments are likely to make arbitration case law in Germany more transparent. They also create a reliable framework for the publication of arbitral awards rendered in Germany.

4. Technology-neutral formal requirements for arbitration agreements

The draft bill once again attempts to amend the formal requirements for arbitration agreements. Under Section 1031(1) of the ZPO, these must currently be contained in a document signed by the parties or exist in a form that ensures proof of the agreement. Under current law, this specifically includes faxes and telegrams. An adaptation of the provision to modern reality is therefore long overdue: in addition to the written form, which remains an option, other forms will in future also be permissible for arbitration agreements under Section 1031(1) of the Draft Civil Procedure Code (ZPO-E), provided that the means of communication used ‘enables the information to be accessed again at a later date’. The drafters of the bill are likely to have had in mind, in particular, the exchange of emails or text messages, as is evident from the explanatory memorandum to the draft.

The planned amendments are, however, limited to commercial legal transactions – as soon as a consumer is involved in an arbitration agreement, a handwritten signature or qualified electronic signature from both parties is required. The draft bill does not seek to alter this provision, which has hitherto applied under Section 1031(5) of the ZPO.

Overall, a step in the right direction

Overall, the proposals in the draft bill provide the right impetus for adapting the legal text on arbitration proceedings to developments in the modernisation of the judiciary in other areas and consistently build on the approaches set out in the key issues paper produced under the traffic-light coalition. In some cases, the proposed amendments are merely of a clarifying nature and are unlikely to have much impact on practice, or they do not implement the steps towards modernisation consistently enough.

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