Joachim Peiper certainly did speak English fairly fluently and both in his interrogations and trial would correct his interpreter. But the IMTs and NMTs were conducted with near-simultaneous translations, as you can see in this video. This was one of the reasons why the various tribunals failed to catch much public attention as the dual language system denuded the courtrooms of a good deal of drama and added to the length of the tribunals. But Peiper, along with his co-defendants, were under no requirement to speak English during the trial.

Peiper's interrogators did note that the Waffen-SS commander was incredibly arrogant and used his knowledge of English to taunt his interrogation. But Peiper's use of language as well as that of other Germans tried for war crimes was part of a larger defense strategy to deny the tribunals' legitimacy. One of the complaints that surfaced about the Malmedy trial was that faulty translation of an affidavit led to a twenty-year prison sentence. Other defendants like Benoni Junker would claim that interrogators would twist their statements in translation. This was part of a larger pattern in the Malmedy case of the defendants fabricating tales of abuse and compelled testimony. In the case of language, there was also a subtle antisemitic dog-whistle at work. The US Army relied upon German emigres for interrogation and other matters, many of whom were Jews. Stephen Remy has noted in his recent study of the Malmedy case that many of these emigres were able to use their knowledge of German culture and society to get the war criminals to incriminate themselves during their interrogations. The lurid tales of abuse and unprofessional behavior was partly a response to the efficacy with which the US Army investigations had revealed the guilt of these men. Labeling excesses of the Allies on vengeful Jews was one way to walk back earlier affidavits and win public opinion. The US Army and government did a very through job investigating tales of abuse and found next to no merit in these charges, although Senator Joseph McCarthy did engage in grandstanding accusations of the Truman administration's "Gestapo" tactics.

The sad thing is that Peiper's rather obnoxious behavior worked. Once tales of abuse by vengeful Jews got out, it was hard to escape the narrative of a victor's justice with shades of antisemitic conspiracies. Peiper not only had his death sentence commuted, he also was released from Landsberg early in the amnesty-fever days of the Adenauer era. The idea that he was put on charges by a kangaroo court has been a lasting one and if you read the comments on the linked video above (trust me though, they will make you sad for the human race), there is a sentiment that Peiper was acting "like a BOSS" and was a heroic soldier doing his duties. What gets lost here is that his duties included the massacre of American PoWs and Belgian civilians and that is why he was on trial.