GERMAN LAW

German Law

German Law

Once the decision is taken to choose German substantive law as the law applicable to a contract, this almost inevitably raises the question whether it would then not also be advantageous if a dispute between the parties to that contract were carried out in the German courts. This option could be available either by the parties having expressly made a (valid) agreement on a German place of litigation; in the absence of such agreement, one of the parties could also simply take action in a German court which then declares itself competent under the national rules of our Civil Procedures Code (ZPO). As the following examples may show, civil proceedings in Germany provide an efficient, calculable, reliable and also cost-effective basis, and the German courts serve as an appropriate forum, for such disputes. Compared to litigation in many other countries, “Litigation - Made in Germany” offers tangible advantages. Taking a matter before a German state court may, eventually, also be a good alternative to conducting arbitration.

The German judiciary is divided into several branches. We differentiate between the ordinary judiciary (civil and criminal matters), the special judiciary - of which especially the labour court should be mentioned - the administrative and the constitutional judiciary. In an international context, the ordinary judiciary should be the most interesting. It mainly consists of:

the Landgerichte (Regional Courts): these will deal with disputes in a value of 5,000 € or higher. The panels of judges are called Chambers and consist of three professional judges each. While there are no special commercial courts, the Landgerichte operate special chambers for dispute in commercial matters, and these are staffed with one professional judge and two lay judges each, the latter being particularly experienced in business matters.

the Oberlandesgerichte (Higher Regional Courts): the second instance above the Landgerichte. Senates, consisting of three professional judges each, will review the first instance decision regarding both the facts and points of law.

the Bundesgerichtshof (Federal Supreme Court): this highest ordinary court in Germany will review judgments of the Higher Regional Courts only in points of law; the panels are referred to as Senates and consist of five professional judges each.

German proceedings are well suitable for international matters

Civil proceedings are conducted in writing as well as orally - however, the use of the German language is mandatory to date. If looked at more closely, this is not so much of an obstacle as one might assume.

First: Many judges, especially in the higher instances, today have good control of English or another foreign language. Therefore, there has been discussion in Germany for some time on whether proceedings conducted in English should be possible in specific matters - e.g., cross-border business transactions -, or in specific courts, where especially those of Hamburg and Frankfurt/Main, as metropolitan cities of international significance, are considered. Meanwhile, a legislative initiative is under way, aiming at an appropriate amendment of the Judicature Act.

Second: Already today, judges will frequently accept documents in another language as “obvious to the court”; in such ...