Germany updates

Aviation

Contributed by Arnecke Sibeth Dabelstein
GATS impact on sale and purchase of German-registered aircraft under lease
  • Germany
  • 27 March 2019

In May 2018 the Aviation Working Group announced plans for a global aircraft trading system (GATS) to modernise the selling, buying and financing of leased aircraft and engines by making such transactions simpler and faster. The GATS will be fully electronic and use e-signatures, e-delivery of documents and a secure e-ledger to record transactions. As such, it is expected to reduce the time and costs required to change German aircraft registrations through the national aviation authority.

Aircraft registry requirements for foreign owners
  • Germany
  • 20 March 2019

If a third-country aircraft owner terminates the lease of a German airline but wants to keep the aircraft registered in Germany, it must enter into a new lease or similar agreement with an entity from an EU member state for at least six months. This article discusses why aircraft lessors and owners should carefully consider the requirements for keeping an aircraft in the German aircraft registry, particularly if its lease has been terminated.

Airport computer system failure may be extraordinary circumstance
  • Germany
  • 20 February 2019

The Federal Supreme Court recently ruled that the complete failure of an airport computer system may be considered an extraordinary circumstance. The court affirmed that airport system failures caused by technical defects which affect or suspend the functioning of technical equipment over a prolonged period are an external event affecting air carrier flight operations. Further, the monitoring, maintenance and repair of an airport's technical facilities lie outside the responsibility and competence of air carriers.

Strikes do not necessarily lead to extraordinary circumstances
  • Germany
  • 30 January 2019

The Federal Court of Justice recently held that a strike is considered an extraordinary circumstance pursuant to the EU Flight Delay Compensation Regulation only if its consequences cannot be averted by reasonable measures and make flight cancellation legally and actually necessary. This decision emphasises that determining whether airlines can avoid liability due to extraordinary circumstances must be assessed on a case-by-case basis.

Adequate causal link between delay and further disruptions required in code-share damages claim
  • Germany
  • 12 December 2018

The Hamburg Local Court recently dismissed a passenger's claim for damages based on denied boarding after the delay of a previous flight which had been operated by a code-share partner. The court was of the opinion that a code-share partner is not liable for every further disruption along the course of transportation. Rather, the right to claim damages requires an adequate causal link between the delay and the further disruption.


Banking

Negative interest on existing cash deposits imposed by change in terms and conditions unlawful
  • Germany
  • 16 February 2018

The Tubingen Regional Court recently held that negative interest on a consumer's existing cash deposits imposed by a German bank by unilaterally changing the bank's general terms and conditions was unlawful. According to the court, the defendant bank violated the rules of the general terms and conditions regime because it did not differentiate between existing deposits and newly deposited cash.

EAPO regulation: initial experiences with German courts
  • Germany
  • 05 January 2018

As of January 2018, the EU regulation which established a new European Account Preservation Order (EAPO) procedure will have been effective and in force for one year. In Germany, the most important conclusion which can be drawn from the past year is that the German courts are adopting EAPOs. However, as the procedure is still fairly new to the courts, it has taken time and effort on the part of creditors.

Are arrangement and processing fee clauses in commercial loan agreements invalid?
  • Germany
  • 08 September 2017

The Federal Court of Justice recently issued two rulings declaring that processing fee clauses in standardised commercial loan agreements are invalid as they unreasonably disadvantage borrowers. Previously, the majority of lower German court rulings had upheld the validity of such clauses in commercial loan agreements. Going forward, lenders have a number of options to deal with the issues raised in these new court decisions.


Competition & Antitrust

Selective distribution: legality of third-party platform bans confirmed
  • Germany
  • 26 July 2018

The Frankfurt Higher Regional Court recently implemented the European Court of Justice's (ECJ's) sailing instruction and decided in favour of the luxury cosmetics manufacturer Coty on third-party platform bans in selective distribution. The judgment comes after the ECJ – in an abstract manner – declared third-party platform bans in the selective distribution of luxury goods permissible under competition law.

Federal Court of Justice resolves dispute on limitation periods in cartel damages claims
  • Germany
  • 28 June 2018

Litigants may now seek cartel damages for a longer period as the Federal Court of Justice has affirmed the suspension of the statute of limitations for antitrust claims before 1 July 2005. The court's judgment creates legal certainty and increases Germany's attractiveness as a jurisdiction for plaintiffs in cartel damages cases. It is also a major setback for defendants in cases concerning cement, truck and sugar cartels (among others), which will face even bigger damages claims.

Federal Court of Justice rules on price comparison tool ban
  • Germany
  • 29 March 2018

The Federal Court of Justice recently held that absolute prohibitions to participate in online price comparison tools imposed on distributors in selective distribution systems amount to a hardcore restriction under Article 4c of the EU Block Exemption Regulation on Vertical Restraints. A closer look at the German decision reveals some doubts as to its compatibility with two European Court of Justice decisions.

Court avoids decision on per se illegality of restrictions of competition by object
  • Germany
  • 15 February 2018

A recent Celle Regional Court decision on a clear resale price maintenance case has been heavily debated because the court held that restrictions of competition by object can be compatible with Article 101(1) of the Treaty on the Functioning of the European Union if they have no potentially significant effects on competition. The Federal Supreme Court has since overruled the decision, leaving it open as to whether the potential effects on competition must be considered in such cases.

Ninth amendment of Act Against Restraints of Competition
  • Germany
  • 15 June 2017

The Federal Parliament recently adopted the ninth amendment to the Act Against Restraints of Competition. The agreed amendments take account of the ongoing digitalisation of the economy and also intend to close legal gaps in the liability for violations of competition law. However, one of the main aims of the proposed reform is to implement the EU Directive on Antitrust Damages Actions, increasing the efficiency of competition enforcement.


Employment & Benefits

Digitalisation and codetermination: Facebook, Google Maps... and now Twitter
  • Germany
  • 13 March 2019

After the sensational Facebook ruling rendered by the Federal Labour Court in 2016, the discrepancy between rapid digitalisation and restrictive case law with regard to Section 87(I)(6) of the Works Constitution Act has once again become the focus of attention in a labour law dispute. The Hamburg Regional Labour Court recently addressed the question of whether a Twitter account maintained by an employer constitutes a technical device that is intended to monitor employees' performance and conduct.

Potential risks of courier-delivered dismissal notices
  • Germany
  • 19 December 2018

To ensure that serving a dismissal notice will withstand a court's scrutiny, it should be handed to the employee in person and the employee should countersign a duplicate. However, if the dismissal notice is served by an external courier, the employer may have to comply with different data protection requirements to avoid breaching data protection law.

New maximum hiring out period expires for some contractors
  • Germany
  • 17 October 2018

In view of a statutory transition clause in the Temporary Employment Act, for some deployment agencies the 18-month maximum hiring out period will end shortly – for external employees deployed as of 1 April 2017, the expiry date could have been the end of September 2018. To avoid all possible risk of overstepping the maximum hiring out period, personnel services providers and companies using such providers are advised to determine precisely what they consider the expiration date to be.

Fixed-term employment contracts: three-year limit for prohibiting prior employment overturned
  • Germany
  • 25 July 2018

The Federal Constitutional Court recently restricted the option of concluding fixed-term employment contracts without an objective reason with applicants who have previously worked for the employer. The court also recognised that an unlimited prohibition on prior employment can unreasonably restrict the option of fixed-term contracts without objective reason. This ruling has consequences for current fixed-term contracts and for future hiring practice.

Grand coalition's plans for labour law
  • Germany
  • 14 March 2018

The Christian Democratic Union of Germany, the Christian Social Union in Bavaria and the Social Democratic Party of Germany recently concluded negotiations for a new grand coalition. The 177-page coalition agreement contains very specific proposals for changes to labour law, including with regard to the maximum duration of successive fixed-term employment contracts, substantial restrictions for fixed-term contracts and employees' entitlement to part-time work for a limited period.


Franchising

Contributed by Noerr LLP
For want of an asterisk: regional court scrutinises franchisor's TV advertising
  • Germany
  • 15 January 2019

The Munich Regional Court I recently established a new precedent for competition restriction, which is prohibited in franchising systems under the Act against Restraints on Competition. The court found references to "participating restaurants" in a franchisor's TV advertising insufficient and in violation of the price maintenance prohibition. This decision deserves special attention as it relates to advertising with non-binding price recommendations, which is common among franchisors.

Admissibility of lawsuit despite effective mediation clause in franchise agreement
  • Germany
  • 02 October 2018

A recent Hamburg Regional Court decision is generally understood to have solidified the first franchise-related court judgment on bad faith regarding mediation clauses rendered by the Saarbruecken Higher Regional Court in 2015. However, at second glance, the Hamburg judgment provides a different reasoning for bad faith regarding a mediation objection and might therefore serve as a new application of bad faith in future franchise-related court proceedings regarding mediation clauses.

Requirements for interim injunction to enforce obligation to operate business
  • Germany
  • 06 February 2018

The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be remedied.

No compensation claim for franchisee where franchisor must block customer data when agreement terminated
  • Germany
  • 24 October 2017

The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.

No significant obstruction to advertising franchise systems
  • Germany
  • 04 April 2017

The Federal Court of Justice recently criticised a franchising advertising flyer in terms of competition law. One interpretation of this judgment is that it makes the advertising of franchise systems significantly more difficult. However, this point of view does not ultimately do justice to the decision, as the judgment does not fundamentally question the typical advertising of franchise systems.