Germany updates

Arbitration & ADR

Contributed by Skadden Arps Slate Meagher & Flom LLP
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.

2018 DIS Arbitration Rules – one year on
  • Germany
  • 18 July 2019

In March 2018 the German Arbitration Institute's (DIS's) new arbitration rules came into force. The new rules are a good choice in almost every setting, offering competitive fees for arbitrators and institutions and providing a modern and efficient arbitration framework that preserves and expands on the distinctive features of the previous DIS rules. These unique factors are particularly appealing to in-house counsel.


Aviation

Contributed by Arnecke Sibeth Dabelstein
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.

Damages claim dismissed under Montreal Convention
  • Germany
  • 13 May 2020

The Hamburg State Court recently rejected a damages claim arising from the cross-border transport of goods from the United States to Germany. The consignment was transported to Germany by air freight and was lost in a transhipment warehouse on the premises of Frankfurt Airport. The plaintiff claimed damages on the basis of German transport law and refused to settle the claim on the basis of the Montreal Convention.


Competition & Antitrust

Contributed by Fieldfisher (Germany) LLP
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.

Federal Court of Justice rules on statute of limitations for bid-rigging agreements
  • Germany
  • 15 October 2020

The Federal Court of Justice recently issued a decision on the statute of limitations for bid-rigging agreements. According to the court, the limitation period does not begin with the conclusion of the contract resulting from the anti-competitive agreement; rather, it begins later with the complete execution of the contract.

Resale price maintenance? Not every discussion on reseller's pricing is illegal
  • Germany
  • 08 October 2020

In Germany, any form of pressure not to reduce prices below a certain level (including the granting of advantages) is prohibited. However, the Dusseldorf Higher Regional Court has clarified that not every discussion on resale prices is prohibited. Even the termination of a supply relationship by the supplier due to the retailer's sales prices failing to meet its expectations is permissible. However, suppliers should beware: threatening a retailer with non-supply if they fail to enforce a certain price level is illegal.


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
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.

Bogus self-employment and unethical franchise agreements
  • Germany
  • 30 April 2019

Case law from the highest German courts on franchise law matters is rare, which makes a recent Federal Court of Justice decision on the subject of bogus self-employment of franchisees – a perennial issue for franchise law practitioners – even more noteworthy. The case concerned claims for payment under a licence agreement and the question of whether the licence agreement was void due to the franchisee's bogus self-employment.