Bavaria Establishes Commercial Court in Munich to Attract International Business
On June 1st, the Higher Regional Court (Oberlandesgericht) in Munich will inaugurate two new specialized senates, collectively known as the Commercial Court, dedicated to resolving substantial national and international commercial disputes. This significant development, approved by the Bavarian Cabinet, aims to bolster Bavaria’s standing as a leading business and legal hub. According to the State Chancellery, the establishment of the Commercial Court is a strategic move to attract large international and national companies, as well as medium-sized enterprises, by offering a sophisticated and efficient legal framework for resolving complex commercial issues.
Florian Herrmann, the Head of the State Chancellery (Staatskanzleichef), emphasized that the new senates will handle cases with a minimum dispute value of 500,000 euros. This threshold ensures that the Commercial Court focuses on high-value, intricate commercial disagreements that often involve significant economic implications. The specialization within the Commercial Court is initially centered on two primary areas: disputes arising within supply chains and certain conflicts between a company and its management or supervisory board members.
Supply chain disputes encompass disagreements between a manufacturer and its direct or indirect suppliers, or even between the suppliers themselves. These conflicts can involve issues such as breach of contract, quality control problems, delays in delivery, and intellectual property infringement. Given the increasing complexity and globalization of supply chains, the Commercial Court’s expertise in this area is expected to provide valuable assistance to businesses operating in Bavaria and beyond.
The second area of specialization involves disputes between a company and its board members. These cases often revolve around issues of corporate governance, fiduciary duty, and executive compensation. The Commercial Court’s specialized knowledge in this area will ensure that such disputes are resolved fairly and efficiently, protecting the interests of shareholders and promoting sound corporate practices.
A key feature of the Commercial Court is its ability to conduct proceedings in English, upon request. This is a significant advantage for international corporations and businesses that may prefer to litigate in English, avoiding the need for translation and interpretation services. The option to conduct proceedings in English is expected to enhance the Commercial Court’s appeal to foreign businesses and further solidify Bavaria’s position as an international business center.
Herrmann highlighted that the decision to establish the Commercial Court in Munich, specifically at the Higher Regional Court, was influenced by the city’s status as the headquarters for numerous DAX-listed companies. This strategic location ensures that the Commercial Court is easily accessible to the businesses that are most likely to utilize its services.
The Bavarian government hopes that the establishment of the Commercial Court will encourage companies to increasingly turn to the regular court system for resolving commercial disputes, rather than relying on international arbitration. Herrmann stated that the goal is for businesses to have greater confidence in the state courts, perceiving them as a reliable and efficient alternative to international arbitration tribunals.
International arbitration, while often preferred for its perceived neutrality and confidentiality, can be costly and time-consuming. The Commercial Court aims to provide a more streamlined and cost-effective alternative, while still maintaining a high level of expertise and impartiality. By offering specialized knowledge, efficient procedures, and the option to conduct proceedings in English, the Commercial Court seeks to address the perceived shortcomings of traditional litigation and the drawbacks of international arbitration.
The establishment of the Commercial Court reflects a broader trend in Europe towards creating specialized courts and tribunals to handle complex commercial disputes. These specialized courts are designed to provide businesses with a faster, more efficient, and more predictable legal environment, thereby promoting economic growth and attracting foreign investment.
The Bavarian government’s investment in the Commercial Court demonstrates its commitment to fostering a business-friendly environment and supporting the growth of the Bavarian economy. By providing businesses with a specialized and efficient legal framework, the Commercial Court is expected to contribute to Bavaria’s continued success as a leading economic and legal hub in Europe. The long-term impact of the Commercial Court will be closely watched by businesses and legal professionals alike, as it has the potential to reshape the landscape of commercial dispute resolution in Germany and beyond. The court represents a significant step in adapting the legal system to the evolving needs of a globalized economy, emphasizing expertise, efficiency, and accessibility for both domestic and international businesses.
