Germany updates

Arbitration & ADR

Contributed by Skadden Arps Slate Meagher & Flom LLP
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
Q&A on pitfalls and red flags when dealing with German MROs
  • Germany
  • 23 October 2019

As airlines must constantly strive to reduce maintenance costs, it is prudent to carefully review and negotiate contracts with maintenance, repair and overhaul organisations (MROs). As MROs often insist that contracts must be governed by the law of their home jurisdiction, this article addresses a selection of important issues that must be considered when negotiating so-called 'time and material' or 'power by the hour' contracts with German MROs.

Discounted tariffs: change of legal position?
  • Germany
  • 16 October 2019

A recent Frankfurt am Main Local Court decision is a useful reminder that in the event of an assertion of claims under the EU Flight Delay Compensation Regulation, the associated booking conditions must be considered when determining claim validity. Ultimately, travellers with access to corporate customer tariffs between their employer and the airline cannot claim compensation if their flight – whether for professional or private purposes – is delayed or cancelled.

Air fares can be displayed in multiple currencies
  • Germany
  • 18 September 2019

The Federal Court of Justice recently requested a preliminary ruling from the European Court of Justice on the question of whether airlines are in principle entitled to choose the currencies in which their air fares are listed. Under EU law, airlines that offer flights departing from EU airports must list passenger fares; however, whether airlines have the right to choose the currencies of said listings required further clarity.

Compensation must be offset against compensation for damages according to national law
  • Germany
  • 04 September 2019

The Federal Court of Justice recently issued a verdict stating that compensation under the EU Flight Delay Compensation Regulation must be offset against compensation claims made under national law that were caused by the same incident. The court's judgment is welcomed, as it prevents passengers from being overcompensated and provides greater legal certainty while balancing the interests of airlines and customers.

Aircraft tyre damage caused by foreign object on runway constitutes extraordinary circumstance
  • Germany
  • 03 July 2019

In a recent preliminary ruling, the European Court of Justice held that a foreign object such as a screw or nail on an airport runway which damages an aircraft represents an extraordinary circumstance under the EU Flight Delay Compensation Regulation. According to the court, such incidents exempt air carriers from the obligation to pay passengers compensation in the event of denied boarding and flight cancellation or long delays.


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.


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.


Employment & Benefits

Contributed by Mayer Brown
Leave pay for commission-based employees: an often overlooked pitfall for employers
  • Germany
  • 23 October 2019

An accurate method for calculating leave pay must take into consideration an employee's holiday, sickness, bank holiday and other paid absences; however, this can be burdensome for a company's HR department if its employees earn fluctuating rates of commission. While a certain amount of bureaucratic effort is inevitable, a well-thought-out system and properly trained HR officials will help to minimise complications and avoid negative consequences.

Risks associated with engagement of external personnel
  • Germany
  • 24 July 2019

There is a considerable need for external personnel – partly due to the current labour market's limited supply of highly qualified specialists willing to work as employees in some areas and partly due to the increasing demand for flexibility. However, while engaging external personnel allows companies to concentrate on their core competencies and provides easier access to external know-how, it also carries considerable legal and economic risks if handled improperly.