Austria, Graf & Pitkowitz Rechtsanwälte GmbH updates

Arbitration & ADR

Contributed by Graf & Pitkowitz Rechtsanwälte GmbH
VIAC expands its jurisdiction
  • Austria
  • June 29 2017

The Vienna International Arbitral Centre (VIAC) recently obtained the right to administer domestic cases. The new law has received a warm welcome in Austria and is another sign of the quality of the VIAC's work and the confidence in its services. The VIAC has already established a working group to implement the proposed changes into the Rules of Arbitration and Conciliation in order to reflect this positive development.

No foul play in arbitral award regarding football licensing
  • Austria
  • June 15 2017

The Supreme Court recently considered whether an arbitral award rendered in connection with licensing for the Austrian First Division Football League had to be set aside because of an alleged infringement of public policy. The decision is particularly interesting because the court had to tackle the sensitive issue of a possible infringement of substantive Austrian public policy in a situation where a party was forced to enter into an arbitration agreement with a dominant counterparty.

Supreme Court sets aside arbitral award for defective reasoning
  • Austria
  • January 19 2017

The Supreme Court recently considered if and under what circumstances defective reasoning of an arbitral award may lead to its annulment under the Arbitration Law. In a deviation from previous case law and views expressed by the majority of Austrian legal scholars, the court held that the requirement of sound reasoning is a fundamental principle of the Austrian legal system, and thus that an arbitrator's failure to comply with this constitutes a violation of procedural public policy.

Arbitrators beware! No such thing as a free lunch
  • Austria
  • August 25 2016

In a recent decision the Supreme Court considered whether a lunch attended by a sole arbitrator and a party's counsel could give rise to doubts regarding the arbitrator's impartiality and independence. This decision serves as a reminder that arbitrators should disclose all circumstances that could give rise to a challenge and proceed with the utmost care when a challenge has been dismissed.

Supreme Court strict on form but arbitration-friendly on refusal grounds under New York Convention
  • Austria
  • May 26 2016

The Supreme Court recently considered several formal objections under the New York Convention, as well as several alleged grounds for refusal. The court adopted a rather strict approach with regard to the authentication requirement under the convention, while reiterating that the convention should generally be interpreted in favour of the recognition and enforcement of foreign awards.


Banking

Contributed by Graf & Pitkowitz Rechtsanwälte GmbH
Limits set to client communication via e-banking
  • Austria
  • December 15 2017

The Supreme Court recently rendered its first judgment on the admissibility of the use of electronic mailboxes, which are exclusively incorporated and only accessible via the e-banking system of a credit institution for serving client account notices and statements to consumers. This ruling will significantly affect Austrian banking practice.

Implementation of Fourth Anti-money Laundering Directive in Austria – what to expect
  • Austria
  • October 27 2017

Following the Fourth Anti-money Laundering (AML) Directive coming into force, Austria transposed the directive into law through two major legislative acts. This update provides an overview of the effects and obligations arising from the implementation of the Fourth AML Directive – in particular, the due diligence that banks will have to undertake on prospective clients.

Supreme Court rules on negative interest rates
  • Austria
  • June 23 2017

Following a period of legal uncertainty and controversy, the Supreme Court has provided answers to the question of whether, against the backdrop of negative reference interest rates, a bank can unilaterally floor an overall floating interest rate at 0.00001%. Although the Supreme Court's decision is disappointing, it held that a decision rendered on an individual basis may come to other conclusions. Thus, this decision is unlikely to be the final word on this issue.

Debt recovery made faster, cheaper and more efficient? EAPOs and their implementation in Austria
  • Austria
  • February 24 2017

New almost EU-wide rules recently entered into force to support businesses in the recovery of debt from debtors in other EU countries. The regulation established a new procedure for creditors by providing common rules regarding jurisdiction and the procedure and conditions for freezing funds held by debtors in bank accounts located in the European Union. Austria has amended its Enforcement Code in order to provide the necessary framework for the procedures set out in the EU regulation.

Banking secrecy – made of glass for tax reasons?
  • Austria
  • December 09 2016

Over the decades Austria has remained faithful to its banking secrecy by being a late adopter, if at all, of international standards for exchanging information regarding bank accounts. However, the recent amendments to the legal framework have put an end to this and led to a material softening of banking secrecy in Austria. Among other things, the legislature introduced new laws carefully tailored to remove legal obstacles based on banking secrecy that prevented – or at least impeded – tax collection.


Employment & Benefits

Contributed by Graf & Pitkowitz Rechtsanwälte GmbH
Blue-collar and white-collar employees – sweetening the deal
  • Austria
  • December 06 2017

In its final session before the general election, Parliament passed a bill which serves as a first step in harmonising the different legal regimes covering blue-collar and white-collar employees. However, not everyone is happy with this half-hearted harmonisation project – most notably, employer organisations – as they believe that the extended notice period for blue-collar workers will cost employers dearly.

Up in smoke: new law favours non-smokers in pub over workplace
  • Austria
  • October 04 2017

As of May 1 2018 smoking in restaurants and bars will be prohibited. The restrictions on smoking in the workplace will also be tightened as of this date. However, the new provisions still afford some leeway to employers in that they can organise smoking breakrooms. As a consequence, the workplace may be more smoker friendly than pubs – who would have imagined that.

Vocational reintegration through novel part-time model
  • Austria
  • July 26 2017

New legislation recently came into effect that aims to ease the process of reintegration into the workplace for employees who have been on extended sick leave and who would benefit from a reduced workload in order to aid rehabilitation and reconnect with the workplace. Although it is a well-meant initiative to curb the increase in long-term sickness, the legal framework reveals some major flaws.

2017 brings improvements for works councils and older employees
  • Austria
  • April 26 2017

Two recent amendments to the Labour Relations Act benefit the legal status of works councils and are geared towards increasing older employees' job prospects. In particular, the term of office for members of a works council has been extended from four to five years. Works council members' entitlement to educational leave has also been extended. Further, the special treatment of employees who start employment at age 50 or older has been abolished.

Supreme Court rules on scope of German minimum wage legislation
  • Austria
  • February 08 2017

The Supreme Court recently ruled on the thin line between the freedoms to provide services afforded under EU law and member states' legislation to contain social dumping, which can be extended to employers of other member states when they perform their services abroad. The decision clarifies that foreign minimum wage legislation will be avoided where its application poses an undue burden on employers and where it can be guaranteed that the purpose of minimum wage legislation is not undermined.


Insolvency & Restructuring

Contributed by Graf & Pitkowitz Rechtsanwälte GmbH
New group insolvency law
  • Austria
  • December 08 2017

The Insolvency Code was recently amended in response to the introduction of the EU Insolvency Regulation, creating – for the first time – specific rules for the insolvency of corporate groups in Austria. From a practical standpoint, this approach is welcome, as it may lead to faster and more efficient insolvency proceedings. It remains to be seen how the new rules will affect insolvency practice and whether coordination proceedings according to the EU regulation will be applied in practice.

Protective measures in insolvency proceedings
  • Austria
  • September 08 2017

In some cases of insolvency, it may be necessary to take special measures which affect the debtor or third parties in order to prevent the insolvent assets from diminishing. These cases are governed by Section 78 of the Insolvency Code, which offers the possibility of ordering individual protective measures with regard to the debtor and third parties. In particular, recent case law has extended the scope of application of these protective measures.

New Personal Bankruptcy Law – without minimum payment
  • Austria
  • June 02 2017

One of the Bankruptcy Code's aims is to allow trustworthy debtors the right to be discharged from debts that remain unpaid after insolvency proceedings. However, in practice, low-income debtors cannot always avail of residual debt relief. As such, the government recently introduced an amendment to the personal bankruptcy process in its 2017/2018 Modern Insolvency Law Culture of Failure working programme.

Potential obligation of majority shareholder to file for insolvency
  • Austria
  • March 17 2017

Recent changes to the Insolvency Code have considerably expanded the obligations of shareholders in insolvency situations. For example, a new obligation has been introduced which requires majority shareholders in so-called 'companies without management' to file for insolvency. The language of these new provisions remains vague and provides significant flexibility in interpretation, which inevitably results in a number of legal uncertainties.

Lender's liability in case of borrower's insolvency
  • Austria
  • November 25 2016

Recent case law from the Supreme Court demonstrates once again that lenders can be held liable by creditors of an insolvent borrower under certain conditions. In particular, a lender may be held liable where it has significant influence over the borrower's management. However, only a few cases have met the necessary level of influence. The case at hand shows that total disregard of this risk can have severe consequences for lenders.


Intellectual Property

Contributed by Graf & Pitkowitz Rechtsanwälte GmbH
Introduction of certification marks and other amendments to Trademark Law
  • Austria
  • November 20 2017

Parliament recently transposed parts of EU Directive 2015/2436 into national law. Most important is the introduction of certification marks, which did not previously exist under Austrian law. Other provisions of the bill concern the division of trademark applications, the shortening of the validity period of a registration and the reduction of the registration fee.

Age of technology – metadata is sufficient to retain author's right of attribution
  • Austria
  • July 17 2017

The Supreme Court recently ruled that the producer of a photograph who marks his or her name in the photograph's metadata must be credited as the producer on copies of the photograph made by other persons and intended for distribution. This judgment is good news for producers of digital photographs who wish to safeguard their copyright. Persons reproducing and distributing digital photographs should routinely check the metadata to ensure that the producer's name is listed on any reproduction.

Different panels, different opinions – different decisions
  • Austria
  • February 20 2017

The Supreme Court recently confirmed its view that the issuance of contradicting decisions in, on the one hand, infringement proceedings and, on the other hand, opposition proceedings by different panels of the same appellate court is no reason to admit an extraordinary appeal to the Supreme Court. The decision stresses that, in principle, the appellate courts must consider the issue of likelihood of confusion, and that it will step in only if the appealing party can demonstrate gross misjudgment.

Copyright owners beware! Supreme Court judgment defines author's distribution rights anew
  • Austria
  • September 19 2016

In light of a European Court of Justice ruling, the Supreme Court recently overturned its earlier interpretation of an author's exclusive distribution right in relation to his or her work of art. The court found that any kind of distribution – regardless of whether it is a transfer of ownership – falls under the author's exclusive distribution right. Further, it held that this distribution right is violated only if ownership in the work is actually transferred.

Intersection between trademark rights and naming rights
  • Austria
  • July 13 2015

In a recent case a trademark comprising a famous family name was infringed through use in the course of trade by someone with the same family name. The Court of Appeal defined the limits of trademark protection when competing with naming rights and the requirements that trademark owners must meet to shield their trademarks from exploitation under the cover of exercising legitimate naming rights.


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