The question
What ways are there to resolve a conflict in a cooperation, and which suits which conflict?
In brief
The procedures form a sequence: negotiation, mediation, conciliation and finally a decision by third parties, either in arbitration or before a state court. Arbitration replaces the court; it does not precede it (Section 1032 ZPO). At each step the parties hand more of the decision to others. Which procedure fits depends on what the dispute is about and whether the cooperation is to continue. Every procedure can largely be conducted online. The parties can take part in the oral hearing before a German civil court by audio-visual transmission.
The law
The law offers a whole range of ways to resolve conflicts, from stabilising a relationship through conversation to a decision by a third party. It can be read as the cooperation’s doctrine of escalation and de-escalation.
Negotiation
The parties resolve the conflict themselves. The law asks little but protects the attempt: while a claim is being negotiated, limitation is suspended (Section 203 German Civil Code (BGB)). Many contracts contain an escalation clause requiring a conflict to be discussed at a higher level before any formal procedure begins.
Mediation
Under the German Mediation Act (MediationsG), mediation is a confidential and structured procedure in which the parties, with the help of one or more mediators, voluntarily and on their own responsibility seek an amicable settlement of their conflict (Section 1(1)). The mediator is independent and neutral and has no power to decide (Section 1(2)). Each party may end the mediation at any time (Section 2(5)). The mediator is bound to confidentiality (Section 4) and may not act if they have acted for one party in the same matter before or alongside (Section 3).
The outcome is an agreement between the parties. To make it enforceable it can be recorded as a settlement between lawyers (Section 796a Code of Civil Procedure (ZPO)) or a notarial deed (Section 794(1) no. 5 ZPO). Courts, too, can point to mediation: they can refer the parties to a conciliation judge (Section 278(5) ZPO) or propose mediation (Section 278a ZPO).
Mediation suits cases where the parties want or need to continue working together, where interests and relationships lie behind the point in dispute, and where a solution is sought that no court could order.
Conciliation and expert determination
A conciliator hears both sides and makes a proposal, which binds only if the parties accept it. For consumer disputes there are recognised conciliation bodies under the Consumer Dispute Resolution Act (VSBG). Some German states require an attempt at conciliation before certain smaller claims can be brought (Section 15a Introductory Act to the ZPO (EGZPO)).
Expert determination is something else. An expert determines a fact or a value with binding effect, for instance the value of a share in a company (Sections 317 et seq. BGB). This separates the factual question from the dispute.
Arbitration
The parties can agree that an arbitral tribunal decides instead of the state courts (Section 1029 ZPO). The procedure is governed by Sections 1025 et seq. ZPO, often supplemented by the rules of an arbitral institution. Between the parties the award has the effect of a final court judgment (Section 1055 ZPO). It can be set aside only on a few grounds (Section 1059 ZPO) and is declared enforceable (Sections 1060, 1061 ZPO).
Arbitration suits cases where expertise, confidentiality or international enforceability matter (see Across borders). Company law disputes, including disputes over defective resolutions, are arbitrable if the clause involves all shareholders appropriately. Interim relief from the state courts remains available despite an arbitration agreement (Section 1033 ZPO).
Court
A state court decides in public, by fixed rules, subject to appeal and with effect beyond the individual case. That is its value where a legal question needs to be settled in principle or one side refuses any understanding. A statement of claim should say whether mediation or another procedure was attempted first (Section 253(3) no. 1 ZPO).
If the parties agreed on mediation or conciliation before litigation, an action brought prematurely can be dismissed as inadmissible for the time being, provided the other side relies on the clause.
Choosing the procedure by the kind of conflict
No step is better in itself. A dispute about a valuation needs an expert, a dispute about trust needs a conversation, a dispute about the meaning of a rule may need a judgment. The questions are: should the cooperation continue? Is the dispute about facts, law or interests? How urgent is it? Should it become public?
A sensible clause provides a sequence without making it rigid. And it is sensible to keep roles apart: whoever acted as a neutral mediator cannot afterwards fight for one side (Section 3 MediationsG; for lawyers Section 43a(4) Federal Lawyers’ Act (BRAO)). More on handling conflict day to day on the phase page Dealing with conflict and under Conflict.
Online
Mediation online. The Mediation Act prescribes no venue. Mediation live online is widespread and has strengths of its own: the parties sit in their own surroundings, separate sessions need no waiting room, and participants in different countries can take part without travelling. Confidentiality (who is in the room, no recording), the handling of documents and the data protection of the tool need to be agreed.
Arbitration online. The parties and the tribunal largely determine the procedure themselves (Section 1042 ZPO). Oral hearings by video are common in arbitral practice. The bill to modernise arbitration law of June 2026 would expressly allow them [Stand prüfen].
Video hearings in court. Since 19 July 2024, Section 128a ZPO has governed video hearings afresh. The presiding judge may permit or order participants to take part by audio-visual transmission. Any person addressed may object to an order within two weeks, in which case it is lifted for everyone. If a participant applies to take part by audio-visual transmission, the presiding judge should allow it; a refusal must be briefly reasoned. The presiding judge conducts the hearing from the courthouse, and participants may not record it. Evidence can also be taken by video (Section 284(2) ZPO), and Section 16 EGZPO allows fully online hearings to be piloted.
Online dispute resolution. The EU’s online dispute resolution platform for consumers was shut down on 20 July 2025 (Regulation (EU) 2024/3228). Consumer conciliation bodies continue to operate, many of them largely online.
Relevant phases
- Agreeing the cooperation: escalation, mediation and arbitration clauses.
- Supporting the cooperation: recognising and discussing conflicts early.
- Dealing with conflict: choosing the right procedure.
- Ending the cooperation: disputes over winding up.
Read on: Cooperative clauses · Shareholders among themselves · Cooperation between adversaries
Limits of this overview
This page describes the procedures as knowledge. Costs, deadlines, the rules of individual arbitral institutions and procedure before labour and administrative courts are not covered.
As at 30 September 2026