Justice 2.0: Judicial Dispute Resolution through Commercial Courts in Baden-Württemberg

Since November 1, 2020, commercial disputes in Baden-Württemberg can be settled before so-called Commercial Courts. These are specialized commercial chambers at the regional courts in Mannheim and Stuttgart and each staffed with three judges specializing in corporate and commercial law.

The Commercial Courts shall be competent for national and international disputes in connection with the acquisition of companies/shares in companies, commercial matters, banking matters and several other corporate disputes (in some cases, however, only if the value in dispute exceeds a threshold of 2 million Euros). Their jurisdiction however cannot be agreed by the parties involved bur is exclusively governed by the statutory provisions of civil procedure law and the internal business allocation plans of the courts.

The Commercial Courts shall provide for efficient and flexible proceedings. Therefore, they shall in particular use the civil procedural possibilities to make video conferences with the parties and to stretch oral hearings over several days as it is already common in international arbitration proceedings. Furthermore, as far as possible, larger parts of the proceedings (in particular the oral hearing) can be conducted in English. Unfortunately, the pleadings and the judgment still need to be made in German or require an official translation.

The aim in instituting the Commercial Courts is clear: German courts shall become more attractive for big (International) commercial and corporate disputes as, so far, most of those disputes are settled before private arbitration courts or foreign courts. The future will show whether this aim can really be achieved and the Commercial Courts will be accepted in practice. As long as it is not possible to completely conduct the proceedings in English, this is rather unlikely in particular for international disputes. Furthermore, the Commercial Courts cannot in every case keep up with other advantages of arbitration proceedings, namely the chance to enforce them internationally and their strict confidentiality. In addition, there is a fundamental problem that the Commercial Courts cannot solve: For years, the number of new court cases in the civil courts has been declining (apart from mass proceedings such as the Diesel lawsuits). In business life, there is more than ever a tendency to settle out of court and save the time and costs that are inevitably associated with (court or arbitration) proceedings. Probably this tendency will remain even after the institution of the Commercial Courts.