As of January 1, 2018, parties can choose to have their disputes resolved by the newly established Chamber for International Commercial Disputes of the Landgericht Frankfurt am Main (the “Chamber”).
Why was the Chamber established?
Germany offers one of the best court systems in the world committed to due process and the rule of law. The Chamber was established to create an attractive forum for cross-border disputes of English speaking parties allowing them to benefit from Germany’s reliable and expeditious public dispute resolution mechanisms and highly efficient enforcement mechanisms.
Which proceedings are eligible?
The Chamber hears international commercial disputes on application of the parties. The official Schedule of Responsibilities of the Landgericht Frankfurt am Main (Geschäftsverteilung 2018) stipulates:
“Proceedings, which are under the jurisdiction of a Chamber for Commercial Disputes and not under a special jurisdiction of another Chamber of the Court (such as e.g. unfair competition or cartel law) will be referred to the Chamber for International Commercial Disputes, if the lawsuit has a bearing upon an international matter and the parties declare before the end of the deadline for the statement of defence that they would like to plead in the oral hearings in English and waive the right to have an interpreter.”
Which legal framework is applied?
The Chamber follows the rules of the German Code of Civil Procedure (Öffnet sich in einem neuen Fenster). This Code governs all civil proceedings – domestic and international. The hearings will be held in English.
How is the Chamber for International Commercial Disputes set up?
The Chamber has three judges. The presiding judge is a highly experienced professional judge of the Landgericht Frankfurt am Main with a lifetime appointment. The other two judges are business people appointed on the recommendation of the Chamber of Industry and Commerce (Industrie- und Handelskammer) for a term of five years.
Are the proceedings public?
German court decisions are proclaimed “in the name of the people”. Court hearings are therefore usually held in public.
How much do the proceedings cost?
There are no additional costs for proceedings at the Chamber for International Commercial Disputes. As for any proceeding in German courts, the costs depend on the amount in dispute, which will be finally determined by the Chamber after consultation with the parties. In principle, the party not prevailing in the dispute has to bear the court costs and to pay the other party’s reimbursable legal costs.
What kind of procedure can the parties generally expect?
In the German civil trial system the judges actively steer the proceedings. The presiding judge of the Chamber usually determines a date for a preliminary hearing within four to six months after the action was filed.
In general, the proceedings start with a conciliation hearing (Güteverhandlung) in which the possibilities for an amicable settlement are discussed with the parties. The Chamber encourages such a settlement at every stage of the proceedings. The Chamber may also share its preliminary legal and factual assessment of the claim in order to facilitate settlement negotiations. Such analysis can include a professional risk analysis allowing the parties to take appropriate cost/risk/benefit decisions.
If the parties cannot agree upon a settlement, the preliminary oral hearing will take place. In this hearing, the Chamber will discuss the issues with the parties and their counsel and will structure the proceedings. Such hearing may function like a Case Management Conference common in arbitration. The Chamber will let the parties know how it intends to deal with the claim, e.g., admission of evidence, exchange of documents, summoning of witnesses, nomination of experts, etc. The parties are heard in order to guarantee expeditious and efficient proceedings.
The goal generally is to have just one more oral hearing for the presentation of evidence and exchange of oral arguments before reaching a decision. To facilitate this goal, the Chamber may direct the parties by giving guidance. The Chamber may also summon written witness statements or may establish a videoconference to hear witnesses.
The presiding judge creates minutes of the proceedings including summaries of the parties’ claims and acknowledgements, any agreements reached, any guidance given, and any interim orders or rulings, etc. The minutes set out the essence of the hearing and actions taken therein. If witnesses or experts are examined, the evidence may be fully recorded and provided to the parties via the public electronic server system of the German Federal State of Hesse (HessenDrive).
The Chamber announces a ruling, an interim order or decision either directly at the end of the final oral hearing or on a later date determined by the Chamber.