My Court is Better than Your Court

“My Court is Better than Your Court” was the title of a session at this week’s annual IBA Conference in Dubai. It presented the approaches to specialized commercial courts in jurisdictions around the globe. It was a very informative session. The presentations that I found the most impressing were on the one hand those from the home region, namely the DIFC Court in Dubai and the QFC Civil and Commercial Court in Doha, Qatar. Both courts, in a way, started with a clean slate and allowed their founders to design state of the art processes and procedures. And budget restrictions appeared not to an obstacle. The DIFC court originally had jurisdiction over matters related to the Dubai International Financial Centre (DIFC). During the IBA Conference, an extension of the DIFC’s jurisdiction was signed into law by the Ruler of Dubai, creating an opt-in jurisdiction which is now available to parties outside the DIFC.

Whilst very impressive and thought-provoking, the approach of the Dubai and Qatar courts will be hard to adopt in full in a more mature jurisdiction like Germany. The other two presentations that I believe show what can be done within an established court system came from Dublin and Ontario.

So where does Germany stand in the race to design internationally competitive courts? Germany appears to be somewhat late in the game, but it seems to have finally accepted that not only its businesses compete globally, but also its law and its courts. It starts to take up the challenge. Three initiatives come to mind: First, there is the Law Made in Germany campaign, a joint initiative of the German Federal Bar (lead by its president, my Hamburg partner Axel Filges), the German Bar Association and other professional bodies. This initiative is largely a reaction to a similar initiative of the Law Society in England & Wales. Secondly, there is the experiment currently under way in Cologne, Bonn and Aachen courts to conduct court proceedings partly in English by allowing the hearings to be in English with the consent of all parties.

And finally, there is the initiative of four federal states to change the Code of Civil Procedure: A draft law has been approved by the Upper House (Bundesrat) of the German Parliament and is currently working its way through the legislative process. Next week, on November 9, 2011, the Lower House (Bundestag) will hear experts on the subject; some of their written opinions can be found here. The opinions published so far are in support of the proposal in principle, while suggesting changes in detail. However, some institutions have been very critical, amongst them, perhaps surprisingly, the American Chamber of Commerce in Germany (AmCham).

The weakness, in my opinion, of the approach taken by the draft law is that it exclusively focusses on the language of the proceedings. But simply allowing German-style proceedings to be conducted in English may not be enough to become really competitive. Parties who are concerned about German language proceedings will typically choose another governing law, such as English or Swiss law and a corresponding venue for litigation or arbitration. In the alternative, they will opt for the combination of German governing law and English language arbitration. The decision between these options will be influenced by other factors besides language, such as time, cost and procedural rules. In my experience, the most relevant procedural aspect certainly to parties from the common law world is the availability of document disclosure.

I would propose that the reform be more daring and experimental: Why not create an option for the parties to agree on some limited form of document disclosure, for example – as Dubai has done – by incorporating the IBA Guidelines on Taking Evidence in International Arbitration, as they represent a compromise between the civil law and the common law world. Throw in some “advanced” technology such as video conferences, a fair measure of pro-active case management, and get rid of some old-fashioned practices such as judges dictating the protocol and replace it with proper court reporting, and German courts would be on par with other icons of German productivity such as its car makers and its football team.