The Supreme Court recently considered the validity of a hybrid arbitration agreement which provided for the formation of a tribunal under the International Chamber of Commerce Rules of Arbitration to arbitrate at the Vienna International Arbitral Centre. In this context, the court also considered the consequences of violating procedural rules agreed by the parties and the tribunal's failure to issue a reasoned award.
The Supreme Court recently considered whether a rather brief and general notice of arbitration in ad hoc proceedings containing a nomination had properly initiated the arbitration proceedings and was thus sufficient grounds to request the Supreme Court to appoint an arbitrator, following the respondents' refusal to nominate one. The decision is a soft reminder for counsel that sending out incomplete notices of arbitration or nomination requests can be a time-consuming and costly endeavour.
The new Vienna International Arbitral Centre (VIAC) Rules of Arbitration and Mediation recently entered into force. They apply to all arbitration and mediation proceedings initiated after December 31 2017. The amendments to the VIAC rules allow for parties to conduct efficient and cost-effective arbitration and mediation proceedings, while offering enough flexibility when applying them in individual cases.
The Supreme Court recently considered whether proceedings (wrongly) commenced before an Austrian district court to set aside an arbitral award could nevertheless be continued. Notwithstanding the Supreme Court's exclusive jurisdiction regarding the setting aside of arbitral awards, the unusual facts of the case at hand led to the creation of an additional channel of appeals not provided for in the law.
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.
The Federal Administrative Court recently confirmed that a credit institution had violated its obligations under the EU Data Protection Regulation by refusing to provide its customer access to information – at no cost – on specific payment transactions effected in the previous five years. Consumer protection organisations and the Austrian press celebrated the decision, but on closer inspection, those cheers seem to have been uttered a little too early and the celebrants' expectations appear to have been a little too high.
Following the recent agreement reached by the European Banking Authority, the Austrian Financial Markets Authority extended the deadline for implementing strong customer authentication for card payments in e-commerce transactions. The extension applies only to card payments in e-commerce transactions; all other types of transaction require full compliance with the strong customer authentication standards.
The Supreme Court recently extended to credit insurers its established jurisprudence that banking secrecy may prevent a statutory transfer of credit claims on fulfilment of such claims by a third party. Further, the court affirmed its view that the purpose of making a credit claim recoverable does not constitute an overriding interest that could breach banking secrecy.
The Supreme Court recently dismissed an insolvency administrator's complaint challenging the enforcement of an account pledge provided to a bank as security for a notional cash pool arrangement. The court's guidance on the advantages of cash pooling arrangements and on contractual minimum requirements must be considered when structuring new or reviewing existing cash pool arrangements of any kind.
With the deadline for implementing the EU Shareholder Rights Directive II (SRD II) fast approaching, the government recently published a ministerial draft of the Stock Corporation Amendment Act 2019, which addresses the rules on say on pay and related party transactions. The draft seeks to minimise the administrative burden on listed companies by avoiding any 'gold plating'. Further, it closely follows SRD II and takes advantage of business-friendly options.
The Higher Administrative Court recently requested that the Constitutional Court repeal Section 39(2) of the Trade Act, as it infringes fundamental rights guaranteed by the Constitution. Austrian legal practitioners are already eagerly awaiting this judgment, which is expected to be issued during 2018.
Amazon has offered to change its terms and conditions following a series of Federal Competition Authority (FCA) investigations regarding business practices on the 'Amazon.de' marketplace. The FCA conducted an extensive market survey in which approximately 400 of the top-selling Austrian marketplace traders on 'Amazon.de' were interviewed in writing and via telephone. The survey results showed that Amazon had market power for a representative selection of larger Austrian marketplace traders.
A recent Cartel Court decision demonstrates how a long-term relationship between Semperit and a group of Thai companies turned into an equally lengthy disagreement, which came to a decisive turning point in the courts. The final blow landed with a decision by the Federal Cartel Authority, which imposed a fine of €1.6 million on Semperit for violating the Austrian Cartel Act and Article 101 of the Treaty on the Functioning of the European Union.
The Federal Cartel Authority (FCA) recently published for consultation draft guidelines on the good conduct of entrepreneurs. Generally, neither the practices nor the laws as described by the FCA are new. The major issue is fear: smaller and less aggressive enterprises are afraid to lose business if they stand up to their dominant contractual partners in cases where the loss of a contract could lead to their financial collapse.
In 2017 an additional merger threshold was implemented to catch cases that fall below existing turnover thresholds but where the consideration for the transaction exceeds a specified amount and the target is active in the relevant country to a significant extent. While the first cases and legal discussions have shown that there is considerable uncertainty regarding the application of this legislation, new draft guidelines have been published on the application of the new, quite difficult piece of legislation.
To date, the law contains no definition of 'implementation' in relation to mergers. There has been much debate in doctrine regarding whether implementation should be defined broadly as the mere possibility of influencing the target's behaviour, or more narrowly as the actual exercise of such influence. The Cartel Court's case law has followed the narrower definition. However, a recent Supreme Court decision has clarified the matter and reached a different conclusion.
For the first time, the Supreme Court has upheld a security right granted under German law, even though the asset had been transferred to Austria. Previously, such rights were terminated once the asset was moved from Germany to Austria. The decision will substantially facilitate the financing of companies with cross-border business.
The Constitutional Court recently ruled on whether the Squeeze-Out Act is compatible with the Constitution. The plaintiff argued that certain provisions of the Squeeze-Out Act violate the Constitution because they restrict shareholders' property rights and the principle of equality (rights enshrined in both the Constitution and the European Convention on Human Rights). However, the Constitutional Court held that this was not the case.
Companies regularly store information about their customers, clients, employees, investors, partners and vendors. Privacy and data security are therefore important aspects of most M&A transactions. Although the risk of non-compliance with privacy laws may result in severe negative consequences, many M&A agreements still lack adequate privacy-related representations and warranties.
In 2014 the Austrian Supreme Court submitted a request to the European Court of Justice (ECJ) for a preliminary ruling on the interpretation of EU law regarding cross-border mergers. The ECJ recently ruled that in cases of merger by acquisition, all contracts entered into by the transferor company pass to the acquiring company without novation. Thus, the law applicable to the contracts before the merger also applies to the underlying contracts after the merger.