New business courts revolutionize German commercial disputes

The German legal system is undergoing significant modernization as a result of the Act to Strengthen the Legal System. Since April 2025, commercial courts have been establishing themselves as an innovative alternative to conventional court proceedings and arbitration. These specialized senates at higher regional courts promise more efficient dispute resolution for complex commercial disputes.

Structural organization and area of responsibility

Commercial Courts act as special panels of the Higher Regional Courts with direct jurisdiction at first instance. A decisive advantage: instead of the usual three-stage appeal process (Regional Court - Higher Regional Court - Federal Supreme Court), they enable a direct route from the Commercial Court to the Federal Supreme Court via an appeal without permission.

Jurisdiction is strictly defined: the value in dispute must be at least 500,000 euros, and there must be corporate disputes, M&A conflicts or company law disputes. In addition, all proceedings require an express agreement on the place of jurisdiction or negotiations conducted without complaint.

Regional specializations and location advantages

The federal states pursue different specialization strategies: Berlin focuses on construction disputes, Bremen on logistics and aviation, Munich on supply chain problems. Hamburg and Frankfurt, on the other hand, offer comprehensive competencies for all qualified commercial disputes. This specialization enables the development of specific expertise and shortens training periods for complex legal issues. Companies can select the optimal location for their disputes.

Operative advantages over traditional procedures

Conducting proceedings in English in accordance with Section 184a GVG eliminates translation costs and makes it easier for international parties to participate. Organizational meetings at the beginning of the proceedings structure the course of the proceedings in a similar way to arbitration proceedings and promise considerable time savings.

The appointment of experienced Higher Regional Court judges ensures a high quality of decisions, while at the same time limiting the litigation cost risk through standardized court fees. Some locations also prioritize Commercial Court proceedings in their scheduling.

Strategic comparison with arbitration

Commercial courts combine the advantages of state and private dispute resolution. While arbitration proceedings allow a free choice of arbitrators and flexible procedural design, state courts offer cost predictability and standardized procedures. A critical difference lies in international enforceability: the New York Convention secures arbitration awards in 172 states, while German court judgments are only automatically enforceable in EU/EEA states and Switzerland. This remains a decisive factor for globally active companies.

Cost analysis and profitability

Commercial courts charge an additional value fee compared to district courts, but remain more cost-effective than arbitration proceedings. The shortened chain of instances can result in considerable savings, especially in protracted legal disputes. The limited risk of cost reimbursement in the event of defeat makes proceedings more predictable than arbitration, where arbitrator and procedural costs can vary considerably.

Recommendations for contract amendments

Companies should implement staggered jurisdiction clauses: Basic jurisdiction of local courts for disputes under EUR 500,000, commercial court jurisdiction if this threshold is exceeded. The precise designation of the desired commercial court and its specialization is essential. A differentiated approach is recommended for international contracts: intra-EU transactions benefit from commercial courts, while arbitration may remain more advantageous for third-country disputes.

Future prospects and market development

Commercial courts are establishing themselves as an attractive addition to existing dispute resolution mechanisms without supplanting arbitration. The combination of state legal certainty and efficiency under private law makes them particularly attractive for Central European commercial disputes. Its success will largely depend on its practical implementation and acceptance in business practice. Initial experiences are likely to point the way for other locations and possible system adjustments.