1. What are the different types of (court) procedures in case of a commercial dispute in Germany?
Legal disputes are not always avoidable, not least among business people. For this purpose, the ordinary courts can be called upon in Germany, whereby the „Kammern für Handelssachen“ (“Chambers for Commercial Matters”) located at the regional courts (Landgericht) are responsible for disputes between merchants with a value in dispute of € 5,000 or more. Disputes about lower amounts are to be brought before the district courts (Amtsgericht).
Of course, the parties are also free to settle disputes before an arbitration court. An arbitration agreement is a prerequisite for this, whereby it is advisable to include specific arbitration rules.
Since arbitration proceedings are very similar throughout the EU and judgments of arbitration courts are regularly enforceable in third countries, in accordance with the rules applicable in the EU states and under multilateral state treaties, the remainder of these guidelines focuses on the rules of ordinary jurisdiction and only occasional references to arbitration proceedings.
2. What is the working language of the different (court) procedures?
The working language at the German state courts is generally German. Only documents submitted for evidentiary purposes may be presented in another language. In such cases, the court may request translations into German.
The possibility granted by the legislator, to establish special chambers for international commercial matters that use English as the working language, has so far only been used at the regional court level and above e.g. in Hamburg.
The working language for arbitration proceedings is a matter of agreement, but is usually already determined when the arbitration rules are chosen.
3. When is the relevant body competent to take cognisance of the dispute
In civil procedure law, matters with a value in dispute of up to € 5,000 are generally under the jurisdiction of the district courts (Amtsgericht), those with a higher value under the jurisdiction of the regional courts (Landgericht).
As a rule the local jurisdiction lies with the court, that is competent for the district, in which the defendant is situated. In addition, there are other local jurisdictions, e.g. for the place of performance, the place of the tortious act, in rental and transport matters, to name a few.
4. Which law is applicable to the different (court) procedures?
Proceedings at the state courts are generally governed by the ZPO. Furthermore, the Brussels Ia Regulation (1215/2012) applies to disputes with other EU parties and the Lugano Convention to disputes with parties from many third countries.
5. Does the judge have a specific knowledge of the market?
The judge is a professional lawyer, not an economist or industry specialist. He regularly has no specific knowledge of the market. Only at the Chambers for Commercial Matters are there two lay judges participating who come from the business world and may have knowledge of the specific industry of the case.
In arbitration proceedings, the parties often can choose industry specialists as judges.
6. Are the procedures and rulings confidential?
Although the proceedings are public, this only applies to the oral proceedings, from which the court can exclude the public due to a good cause. Judges, court staff and lawyers are bound by professional secrecy and court files are not open to the public. Judgments in Germany are usually published anonymously, if at all.
7. What are the costs of different (court) procedures?
Court costs are determined according to a degressive table set by the legislator depending on the amount in dispute, starting at € 114 for matters with an amount in dispute of up to € 500 and are open upwards (e.g. € 798 for € 10,000, € 3,387 for € 100,000). In the case of extremely high amounts in dispute, the court costs can amount to several hundred thousand euros.
8. Can the losing party be ordered to pay the costs of the proceedings?
The completely unsuccessful party is regularly obliged to bear the costs or reimburse the costs within the framework of the statutory fees, which often leads to a full reimbursement of costs, because German lawyers often work at the rates of the statutory fees.
In the case of a proportionate defeat, the obligation to reimburse the costs is determined by the proportion of the sued amount or the value of the claim to sentenced amount or claim.
9. What is the average lead time oft he different (court) proceedings?
Proceedings before the local courts can be concluded within a few months on average (in 2017 approx. 4 – 6 months depending on the federal state), those before the regional courts within 9 to 10 months. However, proceedings with foreign service and/or taking of evidence can be considerably delayed. Proceedings lasting 2 years or longer are common in these cases.
The duration of the appeal instance is on average about 1.5 times that of the first instance, but often considerably less in cases with foreign participation, since in these cases foreign service is not required any longer due to the participation of a German attorney at law in the first instance.
10. Is the judgment consigned in other EU-member states and can it be enforced there? And outside the EU?
According to the Brussels Ia Regulation, judgments of German state courts are valid in all EU states and are also enforceable there. In relation to third countries, it depends on whether a corresponding agreement, such as the Lugano Convention applies.
Arbitral awards sometimes can be enforced in states where state court judgments have no effect.