A.

Reform to German arbitration law

On 10 June 2026, the German Federal Government published an updated draft bill to modernise Germany's arbitration framework, contained in Book 10 of the German Code of Civil Procedure (the Zivilprozessordnung – ZPO). Replacing the previous June 2024 draft and updating a framework untouched since 1997, this bill represents a major evolutionary leap toward digitalising and internationalising German arbitration.

1.

Technology-neutral form requirements

The reform updates outdated references to "faxes and telegrams" with a technology-neutral approach aligned with the UNCITRAL Model Law.

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The new standard: Rather than requiring signed, physical documents, arbitration agreements are valid if concluded or documented in writing or via any electronic communication that allows the information to be stored and later accessed.

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The benefit: This eliminates structural loop-holes for contracts concluded via modern digital commerce (such as electronic purchase orders accepted via performance), while preserving crucial evidentiary certainty.

2.

English-language commercial courts

To lower translation costs and minimise procedural friction for international commercial users:

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Arbitration-related court proceedings (such as set-asides and enforcement actions) can now be conducted entirely in English before newly designated Commercial Courts at the Higher Regional Court level.

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English-language arbitration documents and exhibits can be submitted directly, without the previously mandatory German translation.

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Subsequent appeals before the Federal Court of Justice (BGH) may also proceed in English under certain conditions.

3.

Codification of digital practices

The draft formally enshrines practices that became popular during the pandemic, bringing arbitration proceedings into line with modern civil court proceedings:

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Video hearings: Explicitly authorises tribunals to order remote video hearings. Crucially, unless the parties have agreed otherwise, a tribunal can mandate a virtual format even if one of the parties objects, provided due process is respected.

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Electronic awards: Arbitral awards can now be issued and signed using a qualified electronic signature rather than a handwritten "wet ink" signature. To make enforcement abroad easier, parties retain the right to request a parallel paper version.

As these digital tools, such as video hearings, are already established in civil proceedings, the new draft aims to bring arbitration proceedings into line with civil proceedings.

4.

Additional key innovations

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Direct enforcement of foreign interim relief: Courts must now directly enforce interim or conservatory measures issued by foreign-seated tribunals (Sec. 1025, 1041 ZPO-Draft), eliminating the court's previous broad discretion.

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Review of negative jurisdiction: Parties can now seek immediate judicial review if a tribunal incorrectly declines jurisdiction, correcting a long-standing asymmetry in German law.

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Publication of awards: Introduces a framework to publish anonymised arbitral awards, provided the parties consent or raise no objection, thereby enhancing transparency in the market.

5.

BGH confirms exemption from security for costs in arbitral award enforcement proceedings in times of political tension

On 15 January 2026 BGH decided that the obligation of a Claimant to provide security for legal costs pursuant to Sec. 110 ZPO does not apply if international treaties provide an exemption. Sec. 110 ZPO serves to protect respondents against the risk of unenforceable cost claims in German court proceedings when being sued by plaintiffs who are habitually resident outside the European Union (EU) or the European Economic Area (EEA).

The Claimant, a Russian company, entered into a contract with the Respondent, a company based in Germany. The contract included an arbitration clause stipulating that disputes would be resolved before the International Commercial Arbitration Court at the Chamber of Commerce and Industry of Russian Federation in Moscow (MKAS). After 24 February 2022, the Respondent ceased business relations with Russia. Following unsuccessful negotiations, the Claimant withdrew from the contract and initiated arbitration proceedings before MKAS, which ruled in favour of the Claimant. The Claimant then sought enforcement of the arbitral award in Germany and requested that the Claimant provide security for legal costs. After the Higher Regional Court of Stuttgart (OLG Stuttgart) rejected the application, the Claimant lodged a complaint on points of law against this decision with the BGH.

The BGH also dismissed the application for security for costs and upheld the decision of the OLG Stuttgart that the annexation of Crimea and Russia's war of aggression against Ukraine do not justify the imposition of security for costs under Sec. 110 (1) ZPO. Moreover, the BGH decided that political tensions or practical difficulties in enforcing political claims for reimbursement of costs against the Claimant are irrelevant.

The BGH thereby confirmed previous rulings of German courts and aligned itself with the case law of other international supreme courts, such as the Austrian Supreme Court of Justice.

B.

Development of Commercial Courts and Commercial Chambers

Commercial Courts and Chambers were introduced in Germany in 2025. This was part of broader reform efforts surrounding German arbitration law. The main reason for establishing Commercial Courts was to enhance the competitiveness of the state court system by including traditional arbitration tools such as English-language proceedings, procedural flexibility, specialised senates (benches), and virtual hearings. Proceedings before Commercial Courts may be conducted in English; this is a notable innovation in the German judicial system.

The jurisdiction of the Commercial Court is set out in Sec. 119b Courts Constitution Act (GVG). As proceedings are held before specialised senates and the amount in dispute must be at least €500,000, the new Commercial Courts are widely regarded as a success. The next several years will tell whether the Commercial Courts are an advantage to the German court system. Entities wishing to resolve their disputes exclusively before a Commercial Court should consider amending their dispute resolution clauses. One Commercial Court has already published a model clause for this purpose. However, given the fragmented jurisdiction across individual Commercial Courts, determining whether (and which) Commercial Court is best suited to resolve a particular dispute will generally require a case-by-case assessment.

A.

Reform to French arbitration law

Following a landmark March 2025 Working Group report outlining 40 reform proposals, the French Minister of Justice announced a three-step modernisation of French arbitration law. The first major step was taken on 12 December 2025 with a draft decree incorporating 15 proposals, viewed as the "most consensual" ones, for the French Code of Civil Procedure (CPC).

Scheduled to enter into force on 1 January 2027, this first phase introduces three critical updates for international businesses.

1.

Tightening procedural waiver rules

The draft decree significantly expands the scope of Article 1466 CPC (the French equivalent of the estoppel principle):

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The new rule: A party would be presumed to have waived their right to invoke any procedural irregularity, grievance or argument before state courts if it was not raised in due time before the arbitral tribunal.

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The impact: This waiver would explicitly extend to specific "grievances" and "arguments". This would effectively overturn the Schooner case law (French Supreme Court, 1st civil division, case No. 19-15.396 dated 2 December 2020), which allowed parties to introduce entirely new grounds, arguments and evidence when challenging jurisdiction before state courts.

2.

Streamlining interim and conservatory measures

To enhance their efficiency, the supporting judge (in French, "juge d’appui"), would be allowed to confer enforceability to interim or conservatory measures issued by an arbitral tribunal, upon fulfilment of three conditions:

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the measure is accompanied by interim enforcement;

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its enforcement would not be likely to seriously impair the rights of one of the parties;

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the measure is not contrary to public policy.

3.

Multi-contract consolidation by default

To facilitate the resolution of complex, interrelated disputes, a new mechanism would allow arbitral tribunals to handle claims spanning multiple contracts and multiple arbitration agreements within a single set of proceedings.

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The opt-out: This consolidation mechanism applies unless a party objects.

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A note of caution: The draft decree omits the Working Group's original requirements for "contractual compatibility" or "sufficient connection". This provision should be further detailed to avoid any risk of procedural clash with arbitration rules referred to by Parties.

It remains to be seen whether the two outstanding steps – the adoption of a second decree addressing more intricate issues and the enactment of an arbitration code – will likewise be ready by 1 January 2027.

B.

Parties' intent grants precedence to arbitration over jurisdiction clauses

In case No. 24/04967 dated 21 October 2025, the Claimant had brought an application to set aside an arbitral award by which the arbitral tribunal had declined jurisdiction, ruling that the Parties were "bound by Clause 20 of the Conditions of Contract" which contained a jurisdiction clause in favour of the competent Qatari Court in the event of a dispute between the parties to the contract being concluded.

However, these Conditions of Contract were part of documentation for a tender, which also included a set of pre-contractual documents, among them letters from the Parties, which may have implied an arbitration agreement. Both the Conditions of Contract and the pre-contractual documents were among the documents forming part of the "Contract Agreement", ultimately entered into between the parties.

Having recalled the autonomous nature of the arbitration clause vis-à-vis the main contract, and the lack of any formal requirement for such clause, the Paris Court of Appeal proceeded to analyse the mutual intent of the parties as well as their behaviour throughout the performance of the contract, in order to assess the award’s compliance with Article 1520 1° of the CPC (which provides grounds for setting an award aside, in cases where the arbitral tribunal wrongly upheld or declined its jurisdiction).

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In particular, the Court noted that letters exchanged between the Parties during pre-contractual discussions demonstrated that the claimant’s request to resort to arbitration constituted an essential condition of its participation in the invitation to tender, and that the principle of an arbitration clause was no longer subject to debate;

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The judges also observed that these pre-contractual documents had a contractual value given that they had been included in a final document comprising nine volumes which, pursuant to Article 2 of the Contract Agreement, formed "an integral part of the contract, and are deemed to be complementary to each other".

Finally, the Court found that the respondent’s conduct supported a finding that the parties had consented to arbitration, since the respondent had agreed to participate in the mediation phase established by the pre-contractual documents as a preliminary step before arbitration and had failed to object to the arbitral tribunal’s jurisdiction in a timely manner.

Based on these findings, the Court of Appeal concluded that the arbitral tribunal had erred in declining its jurisdiction and accordingly set the award aside.

While this decision fits within an approach seeking to give precedence to the parties’ mutual intent over the contract’s literal wording, in the present case the arbitration agreement was related at least indirectly to the contract. It remains uncertain whether the Court would have reached the same conclusion had the consent to arbitration not been included in the Contract Agreement.

A.

Key Legislative Developments from the Cartabia Reform

Legislative Decree No. 149 of 10 October 2022 (the "Cartabia Reform") applies to all arbitration proceedings commenced after 28 February 2023. The reform represents a significant modernisation of the Italian arbitration framework under Articles 806-840 of the Code of Civil Procedure (c.p.c.), enhancing Italy’s competitiveness as an arbitral seat.

1.

Interim measures by arbitrators

The reform’s most significant innovation is the attribution to arbitrators of the power to grant interim measures. Under the amended Article 818 c.p.c., arbitrators may issue injunctions, attachments (sequestri) and other precautionary relief, provided the parties have expressly conferred such power before the commencement of the arbitration. Once conferred, the arbitrators’ interim jurisdiction is exclusive. Provisional measures are directly enforceable under Article 818-ter c.p.c., without prior exequatur. This also applies to interim measures issued by foreign-seated tribunals, placing Italy at the forefront of arbitration-friendly jurisdictions.

2.

Translatio iudicii

The new Article 819-quater c.p.c. codifies the translatio iudicii: if an ordinary court declines jurisdiction in favour of arbitration, or vice versa, the proceedings may continue before the correct forum within three months. The substantive and procedural effects of the original demand are preserved, and evidence already gathered may be relied upon.

3.

Arbitrator independence and disclosure

The reform strengthens arbitrator impartiality (already established in Italian law) and now enshrines it in a specific provision that underscores its significance. Under the amended Article 813 c.p.c., arbitrators must provide, at the time of acceptance and under penalty of nullity, a written declaration disclosing any circumstances relevant to their independence and impartiality. The disclosure duty continues throughout the proceedings. Article 815 c.p.c. now includes a new ground for challenge: "serious reasons of convenience" affecting independence or impartiality, so aligning Italian law with the IBA Guidelines on Conflicts of Interest.

4.

Applicable law and party autonomy

Under the amended Article 822 c.p.c., parties may designate foreign rules or law as the law applicable to the merits. In the absence of such a designation, arbitrators apply the conflict-of-laws rules they deem applicable, mirroring Article 28(2) of the UNCITRAL Model Law and permitting recourse to transnational sources such as the UNIDROIT Principles.

5.

Corporate arbitration

The reform reorganises corporate arbitration by transferring Articles 34–37 of Legislative Decree No. 5/2003 into a new Chapter VI-bis of the Code (Articles 838-bis to 838-quinquies c.p.c.). The substantive framework (the Italian system has long conceived a corporate arbitration regulation) remains largely unchanged: arbitration clauses in company by-laws are binding on the company and all shareholders (as well as its directors and auditors, if so specified), and must confer the power of appointment on a person external to the company. Arbitrators retain the (already existing) power to suspend the effectiveness of challenged shareholders’ resolutions (Article 838-ter, para. 4), and such orders are now subject to appeal (reclamo) before the Court of Appeal under Article 818-bis c.p.c.

6.

Recognition and enforcement of foreign awards

Article 839 c.p.c. now expressly provides that the recognition decree is immediately enforceable. Opposition under Article 840 c.p.c. does not automatically suspend enforcement; suspension requires "serious grounds" (gravi motivi). The time-limit for challenging domestic awards under Article 828 c.p.c. has been halved from one year to six months.

7.

Digitalisation and arbitration

The digitalisation of Italian civil procedure, consolidated through the Processo Civile Telematico (PCT) and expanded by the Cartabia Reform, creates a favourable environment for digital arbitration. While no specific statutory provisions mandate the use of digital tools in arbitration, Italian law adopts a functional equivalence approach: qualified electronic signatures satisfy the statutory writing requirements, and parties may exchange submissions via certified e-mail (PEC). Tribunals seated in Italy may adopt fully digital workflows, including virtual hearings and electronic document production, under their procedural autonomy.

As a result, digital interaction is no longer ancillary but constitutes the ordinary channel for conducting civil litigation in Italy. The system is now mature, widely used, and supported by a consistent body of procedural rules and technical standards. This consolidated digital ecosystem objectively creates favourable conditions for a broader use of digital tools in arbitration, even though arbitration remains, by its nature, more flexible and less formally regulated.

Italian arbitration law does not impose rigid formalities that would hinder digitalization. On the contrary, several features of the current framework support a technologically neutral (and in practice, digitally oriented) approach.

B.

Recent Italian case law confirms a pro-arbitration stance

Italian courts have developed a stable body of case law on both challenging domestic awards and recognising foreign awards, reflecting a consistent and marked pro-arbitration approach.

Challenging domestic awards. Judicial review is exceptional and limited to the statutory grounds of nullity under Article 829 c.p.c. Courts may not re-examine the facts or evidence (unless the grounds are missing or wholly inadequate)1. Parties wishing to challenge an award for errors of substantive law must expressly provide for this in the arbitration agreement; otherwise, such challenges are excluded, subject to the public policy exception.

Recognising foreign awards. Recognition proceedings under Articles 839-840 c.p.c. and the New York Convention do not permit any review of the merits2. The public policy ground for refusal is interpreted strictly: only a manifest and grave violation of an absolutely fundamental principle  suffices3. A simple breach of mandatory rules does not meet, in itself, this threshold4.

Reform to Chinese arbitration law

Effective 1 March 2026, China’s significantly amended Arbitration Law replaces the previous 1994 framework. Comprising eight chapters and 96 articles, this landmark reform introduces several vital modernisations. (See also the publication here).

1.

Key changes to the framework

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The "seat of arbitration": Officially introduces the concept of the legal seat. The seat determines the governing procedural law, supervising court, and nationality of the award. Crucially, physical hearings do not need to take place at the seat (for example, a Shanghai seat can host virtual hearings).

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Conduct preservation: Courts can now order parties to perform or refrain from specific actions, expanding beyond mere asset preservation. In urgent cases, parties can apply directly to a court before the arbitration institution officially accepts the case.

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Default online arbitration: Implements an "opt-out" approach. Arbitration proceedings default to online formats unless a party explicitly objects, providing a firm legal basis for digital cross-border disputes.

2.

Appointing the presiding arbitrator

The presiding arbitrator plays a dominant role in conducting hearings in China. Previously, the chair was chosen either by mutual agreement of the parties or directly by the institution.

The amendment introduces a third option:

If the parties agree, the two party-appointed co-arbitrators can jointly select the chair.

While major institutions like SHIAC and CIETAC already allowed this via their own rules, enshrining it in law strikes a practical balance. This ensures that the parties' preferences are reflected through their chosen arbitrators, fostering greater trust within the tribunal.

3.

The arrival of ad hoc arbitration

Traditionally, China only permitted institutional arbitration. Following successful pilots in Free Trade Zones (FTZs) – such as a landmark March 2025 Shanghai Maritime Court ruling upholding an ad hoc clause – the new law officially codifies ad hoc arbitration under strict conditions:

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Scope: Limited to foreign-related disputes, maritime cases, and disputes between companies registered in FTZs or the Hainan Free Trade Port.

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Requirements: The agreement must be in writing, the seat must be in China, and arbitrators must meet legal qualifications.

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Supervision: The final ruling is treated as a domestic Chinese award (subject to wider court review), and case details must be filed with the relevant arbitration association once the tribunal is formed.

A.

Third-country recognition of Russian arbitral awards

On 8 January 2026 the United States District Court for the District of Columbia recognised and enforced three arbitral awards totalling nearly $14 Million issued by MKAS.

The case concerned a dispute over advance payments that had not been returned following the cancellation of contracts on the production of content for RT America. Notably, the Russian claimant ANO TV-Novosti (a media organisation) assigned its claims against the American company T&R Productions LLC to a UAE-based entity at a substantial discount, shortly before it was sanctioned by the United States.

The American court ruled that the public policy exception is inapplicable, notwithstanding the sanctions imposed on ANO TV-Novosti for election interference and the possibility that the UAE-based entity had acquired its interest in the awards at a suspiciously large discount, granted shortly before the anticipated sanctioning of ANO TV-Novosti. The recognition of the arbitral awards in this case is required under the New York Convention. At the same time, this would not prevent future enforcement actions by OFAC, should such actions be appropriate.

The ruling by the US District Court confirms a critical principle: Sanctions are not a "blanket defence" against the enforcement of valid arbitral awards issued in favour of a Russian company. The United States remains hesitant to use public policy exceptions to block the enforcement of awards, even when the winning party is a sanctioned entity. At the same time, however, even if the award is recognised, it is at the discretion of the regulator to decide whether any payment is actually made.

B.

Overriding of arbitration clauses and foreign arbitral awards

On 27 March 2026 in case No. A42-2551/2025 the Commercial Court of Murmansk Region (a Russian commercial court of first instance) held the Respondents (German and Latvian entities) jointly liable for €8.79 Million, in the process contradicting the final award previously issued by the ICC, Netherlands, against the Russian seaport.

The dispute arose from an agreement on the supply and installation of equipment for a coal transhipment facility. The Claimant, a Russian seaport, made advance payments to the Respondent, a German company. The agreement contained an arbitration clause specifying the ICC, Netherlands, as the seat of arbitration.

Even though the competent arbitral tribunal ruled in favour of the European companies, in case No. A42-5661/2025 the Russian courts – including the Supreme Court on 11 February 2026 – refused to recognise the award. This paved the way for the Russian Claimant to bypass the arbitration clause and re-litigate the case. In March 2026, the Russian Claimant filed a new claim with a Russian state court, reclassifying the advance payments as losses. The Claimant filed a claim for joint and several liability under Russian law, based on the consortium status of both Respondents.

Citing the "Lugovoy Law" (Article 248.1 of the Russian Commercial Procedure Code), the Russian court asserted that it had exclusive jurisdiction and rejected Dutch law (which the parties had agreed to be the governing law on the merits), on the grounds that this contravened Russian public policy. The claim was granted in full. However, it is highly likely that the dispute will continue in higher courts.

Under the Lugovoy Law, Russian courts have exclusive jurisdiction over any dispute involving a sanctioned Russian entity or a Russian entity adversely affected by the sanctions5, regardless of any contractual arbitration clause. Even though the EU company had won the case in ICC arbitration, the Russian court allowed the Russian Claimant to refile the same dispute as a claim for losses. Accordingly, it appears that a victory in arbitration proceedings is only the beginning of the journey for the respondents. The Russian court disregarded the governing law clause in the agreement stipulating Dutch law in case of a dispute, citing Russian public policy. This approach enables Russian courts to apply local law retroactively to substantiate the joint and several liability of several companies (in this case, by bringing the Latvian company into the dispute as a co-respondent).

C.

Anti-suit and anti-arbitration injunctions

Following the 2023 bankruptcy of Google’s Russian subsidiary OOO Google, a complex legal battle has unfolded between the Russian bankruptcy trustee and Google’s foreign entities. During the hearing of the bankruptcy case, the bankruptcy trustee of ООО Google filed a petition to invalidate the transactions made between OOO Google and its parent company (the Irish company Google Ireland Limited), as well as a motion to hold the owner secondarily liable for the debts of ООО Google.

While the parent company (Google Ireland Limited) sought an anti-suit injunction via the American Arbitration Association (AAA) to halt the Russian proceedings, the Russian court countered with an anti-arbitration injunction. The Russian court granted the trustee’s motion for an injunction, prohibiting Google Ireland Limited from pursuing arbitration in the United States or enforcing any awards issued abroad. If the parent company refused to comply with this ban, under the Lugovoy Law the Russian courts imposed a staggering fine of ₽65 billion (~€740 Million) per violation. On 22 April 2026, the Russian Supreme Court upheld this injunction by the lower courts.

The trustee is currently seeking to have the Russian decisions issued in the bankruptcy case of OOO Google recognised in third countries, including South Africa.

This case confirms that under the Lugovoy Law the Russian courts can impose steep penalties on companies that ignore Russian injunctions against pursuing foreign arbitration. Additionally, the bankruptcy of a Russian subsidiary now serves as a mechanism used to "claw back" funds. This puts all past intragroup payments – such as dividends, loans, and service fees – under threat of being challenged by Russian bankruptcy trustees.

Conclusion

As the updates compiled in this digest demonstrate, while the administrative framework of international arbitration is becoming more harmonised, digitalised and user-friendly, the geopolitical environment is simultaneously becoming more fragmented.

Key Takeaways:

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The Modernisation Standard: Legislative reforms in Germany, France, Italy and China show a clear alignment with modern business practices. By enshrining technology-neutral agreements, virtual hearings and qualified electronic signatures, these jurisdictions are lowering the costs of international arbitration.

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Geopolitical Asymmetry: Recent rulings demonstrate that there is a growing gap between how different jurisdictions handle cross-border disputes during political tensions. Russian courts are proactively using local mechanisms such as the "Lugovoy Law" to assert exclusive jurisdiction over disputes arising from the sanctions.

These developments signal to international businesses that drafting a dispute resolution clause requires more than merely selecting a modern seat; it necessitates a strategic, case-by-case evaluation of asset location, potential sanctions risks, and the long-term enforceability of an award in an increasingly polarised legal world.

This Digest does not constitute legal advice; legal regulation has been set out as of 31 July 2026.