Germany updates

Arbitration & ADR

Contributed by Skadden Arps Slate Meagher & Flom LLP
Right to be heard in arbitral proceedings – recent case law on set-aside proceedings
  • Germany
  • 15 April 2021

The right to be heard is a universally accepted principle which the Federal Constitutional Court has described as a 'primordial procedural right'. While no statistical data exists, a violation of the right to be heard is considered to be the most invoked ground in set-aside proceedings – albeit, usually to no avail. This article discusses three decisions which demonstrate that Germany is a place where parties to arbitration can rely on the courts to take a robust approach, upholding an arbitral award if in doubt.

Dissenting opinions: ground for annulment or mere annoyance?
  • Germany
  • 29 October 2020

Germany is a civil law jurisdiction whose laws do not have an express provision on the admissibility of dissenting opinions in arbitration proceedings. Because dissenting opinions by German judges (except Federal Constitutional Court judges) are prohibited as a violation of the secrecy of deliberations principle, the admissibility of dissenting opinions in arbitration proceedings seated in Germany is controversial.

Q&A: arbitration with an insolvent party
  • Germany
  • 20 August 2020

This article discusses some of the main considerations that arise when a party considering arbitration or already engaged in arbitration files for insolvency, or has its counterparty file for insolvency, under German insolvency law. It answers key questions such as is an insolvency administrator bound by an arbitration clause agreed to by the insolvent party and what happens to an arbitration if a party files for insolvency in Germany?

Need for speed – revised DIS Rules for Expedited Proceedings
  • Germany
  • 05 March 2020

Alongside its 2018 Arbitration Rules, the German Arbitration Institute issued a revised set of fast-track arbitration rules. The appeal of these rules is that parties can expect a binding award within six months of the first case management conference. As parties are free to agree on the application of these rules to all kinds of dispute, irrespective of the amount at issue, they provide parties with a high level of autonomy. However, parties should exercise their discretion wisely as the rules are not suitable for all disputes.

Third-party arbitration funding – an overview
  • Germany
  • 24 October 2019

Third-party arbitration funding continues to be a hot topic in Germany, with a growing number of companies considering using third-party funding and more international funders than ever joining established German funders. This article outlines some of the pros and cons of third-party funding in an arbitration context.


Aviation

Contributed by Arnecke Sibeth Dabelstein
Passenger versus service cart – typical aviation hazard?
  • Germany
  • 03 March 2021

The Celle Higher Regional Court recently found that the Hanover Regional Court wrongly rejected an application for legal aid by a passenger who claimed that a flight attendant had injured her knee with a service cart. However, it remains to be seen whether the damages will be reduced or excluded due to any contributory negligence on the part of the applicant.

Special features of airline insolvencies in Germany
  • Germany
  • 11 November 2020

Almost all airlines worldwide are having to deal with severe financial problems due to the consequences of fighting COVID-19 and the grounding of fleets for several months. Even Lufthansa considered filing for insolvency during negotiations with the German government about state aid. This article addresses German insolvency law in general and some special features regarding airline insolvencies.

BER: all set for grand opening
  • Germany
  • 30 September 2020

The new Berlin Brandenburg Airport (BER) looks set to open its gates on 31 October 2020. Even if BER opens as currently scheduled, the public damage caused by its troubled history will remain. It remains to be seen how the numerous delays have harmed the original idea for the airport given the fact that its infrastructure has already become a bit outdated without ever having been used.

MRO agreements from airlines' perspective – combating effects of COVID-19
  • Germany
  • 15 July 2020

Under long-term maintenance, repair and overhaul (MRO) agreements, airlines must usually pay a certain rate per flight hour to obtain engine or other component maintenance and repair services or just to have access to a certain spare parts pool. However, during the COVID-19 pandemic, most airlines have ceased their entire flight operations. This article addresses possible contractual clauses and statutory rights on which a claim to adjust payment obligations under an MRO agreement may be based.

E-ticket voucher not a valid ticket
  • Germany
  • 20 May 2020

A recent Eilenburg Local Court decision highlighted that a booking or reservation confirmation issued to a passenger by a tour operator with whom a flight has been booked should not necessarily be regarded as a confirmed booking under Article 3(2)(a) of the EU Flight Delay Compensation Regulation, even if the booking is referred to as an 'e-ticket voucher'. This decision underlines that the burden of proof for the existence of a confirmed booking will be borne by the passenger.


Competition & Antitrust

Contributed by Fieldfisher LLP
FCO begins operating competition register: excluding companies from public procurement procedures
  • Germany
  • 08 April 2021

The Federal Cartel Office has begun operating the competition register. The competition register enables contracting authorities to check nationwide, by means of a single electronic query, whether a company has committed relevant legal violations and whether there are grounds for exclusion from public procurement procedures.

New antitrust law: new instruments in area of digital platforms, higher thresholds in merger control
  • Germany
  • 04 February 2021

An amendment to the Act against Restraints of Competition recently entered into force, regulating issues relating, in particular, to the steady advance of digitalisation. Other important amendments relate to merger control. In the context of adapting competition law to the ongoing digitalisation, a notable change is that the Federal Cartel Office can preventively prohibit certain types of conduct by companies which have an overriding importance for competition across markets.

Bathroom fittings cartel: ex-board members are not liable for company's cartel fines
  • Germany
  • 10 December 2020

In two decisions, the Saarbrücken Regional Court rejected the liability of management bodies for cartel fines imposed on a company. Bathroom equipment manufacturer Villeroy & Boch claimed damages from four ex-board members with regard to a fine imposed by the European Commission for the claimant's participation in the bathroom fittings cartel (2010) and legal fees.

FCO provides further information on development of B2B internet platform
  • Germany
  • 19 November 2020

The Federal Cartel Office (FCO) has given further advice on the development of a business-to-business internet platform in a recently published case report on OLF Germany. The FCO's main concerns are the increased transparency between competitors on the platform and the transfer of information to OLF's shareholder Shell.

FCO continues to act against price fixing by manufacturers against distributors: Alhambra guitars
  • Germany
  • 22 October 2020

Under pressure from the Federal Cartel Office (FCO), guitar manufacturer Alhambra has distanced itself from influencing the selling prices of wholesalers and distributors. The FCO investigated Alhambra on the suspicion that it had exerted pressure on wholesalers and distributors to comply with minimum prices on the German market and urged distributors to raise their retail prices. The FCO has been active in the field of price fixing in recent years and this article provides a historic round-up of cases.


Employment & Immigration

Contributed by Mayer Brown
Court rules on cut-off date provisions in bonus plans
  • Germany
  • 13 January 2021

In 2020 the Berlin-Brandenburg Regional Labour Court ruled on the effectiveness of a cut-off date clause in a works agreement. The court held that a special payment to an employee intended to reward both loyalty and performance can be dependent on the existence of the employment relationship on a certain cut-off date.

€35.3 million fine issued under GDPR for employee monitoring and IT security failings
  • Germany
  • 11 November 2020

A recent decision from the Hamburg Commissioner for Data Protection and Freedom of Information is an important reminder of the significant financial and reputational penalties that employers may face if they do not appropriately collect, retain and protect employee personal data in line with the EU General Data Protection Regulation (GDPR). The decision demonstrates the risks involved when organisations fail to comply with the GDPR's data minimisation principle.

COVID-19 vaccination: who bears cost and is it mandatory to be vaccinated?
  • Germany
  • 30 September 2020

A COVID-19 vaccine will hopefully soon be available. The German labour law requirements regarding a vaccination for employees and a possible obligation to vaccinate are already largely clear. There is currently no obligation for employees to be vaccinated against COVID-19. Nevertheless, employers can recommend vaccination to their staff and make it more appealing by offering vaccination premiums or vaccinations free of charge (eg, through the company medical service).

Home office and mobile working
  • Germany
  • 23 September 2020

In response to the health and safety risks resulting from a potential COVID-19 outbreak in the workplace, many employers moved to home office or mobile working arrangements earlier in 2020. For many companies, this has now proven to be a successful new way of working. This article describes the labour and employment law aspects of the implementation of home office and mobile working arrangements. It also includes a list of items that employers should consider when facilitating a remote work model.

Equal rights for employees and freelancers
  • Germany
  • 12 August 2020

The Federal Labour Court recently ruled in a dispute concerning a freelancer's information claim regarding her colleagues' salary levels. The judgment is the first fundamental decision with respect to the Transparency in Remuneration Act. Pursuant to this decision, both employees and freelancers who receive their compensation mainly from one client can make information claims regarding the salary levels of their colleagues with comparable duties.


Franchising

Contributed by Noerr LLP
Do franchisors and franchisees still have to pay rent during a government-ordered shutdown?
  • Germany
  • 23 March 2021

The effects of the COVID-19 pandemic are still omnipresent in Germany. The courts have yet to resolve some legal issues, including the issue of payment of commercial rent. One example is whether franchisees and franchisors as tenants can reduce or even suspend their rent payments due to widespread government-ordered shutdowns. This article presents a brief summary of the current situation and sets out the implications for the franchise industry in particular.

Appeals court finds clause allowing franchisor to unilaterally increase franchise fee to be invalid
  • Germany
  • 22 December 2020

The Jena Higher Regional Court recently held that a clause which allows a franchisor to adjust the franchise fee at the beginning of each quarter and does not clearly disclose to the franchisee the scope of the fee increase mechanism is in breach of the law regarding general terms and conditions, which applies to standard-form contracts and thus standardised franchise agreements. The decision shows that caution is needed when drafting fee adjustment clauses.

What legal impact has the COVID-19 pandemic had on the franchise sector so far?
  • Germany
  • 06 October 2020

The COVID-19 pandemic continues to significantly affect the franchise sector, along with many others. In May and July 2020 the German Franchise Association issued a guidance document which provided an overview of the COVID-19 Mitigation Act and the associated legal issues specific to franchising. A few months on, this article examines which issues remain the most relevant for franchising practice.

When the asterisk is missing: Munich Higher Regional Court's King of the Month decision
  • Germany
  • 02 June 2020

Special deals are common among competing burger chains. Although this may be detrimental to franchisees, the Munich Higher Regional Court recently decided that such deals do not infringe antitrust rules. This decision deserves particular attention, as it concerns the common situation of a franchisor using non-binding price recommendations in its advertising and once again clarifies how important the asterisk reference is in such cases.

Inadmissible imitation of 'presentation of dishes': stronger protection for gastronomic concepts
  • Germany
  • 13 August 2019

Franchisors must typically consider the extent of concept protection if franchisees which have left the franchise system reuse the concept in a largely unchanged fashion or if third-party competitors (outside the franchise system) copy the concept's main features. A recent decision concerning a fast-food restaurant franchise reinforces the IP protection of gastronomic concepts against competitors' inadmissible imitations.