Until recently, a lawyer issuing proceedings in a German court against a foreign party could, as a matter of principle, assume that she had done everything necessary to suspend the statute of limitations or otherwise comply with an applicable time limit if two requirements were met: First, she had to file the statement of claim (Klageschrift) with the court in good time. Secondly, upon the court’s request the claimant had to immediately pay the advance on court as well as an advance on costs, if any, for a translation for service abroad. If these requirements were met. then service was deemed to have taken place on the date of filing the statement of claim with the court pursuant to Section 167 ZPO (Zivilprozessordnung; Code of Civil Procedure). Read More
Category: Frankfurt Court of Appeals
Case of the Week: Brexit Does Not Facilitate Freezing Orders
In my opinion, obtaining a freezing order (Arrest) against the debtor pending final judgment tends to be rather difficult in this jurisdiction. Often, the courts set the bar for showing that “the enforcement of the judgment would be frustrated or be significantly more difficult”, as Section 917 German Code of Civil Procedure (ZPO) puts it, frustratingly high. It is somewhat easier if the debtor is situated abroad: Section 917 para. 2 ZPO stipulates that it is sufficient grounds for a freezing order if the judgment would have to be enforced abroad and there is no reciprocity with the foreign jurisdiction (Arrestgrund der Auslandsvollstreckung). As there is reciprocity across all member states of the European Union, this does not work, however, with respect to a debtor situated in the United Kingdom – at least for now.
In a recent case in the Frankfurt Court of Appeals (Oberlandesgericht), the applicant was seeking a freezing order against a German national who had moved to the United Kingdom. The applicant argued that given the United Kingdom’s decision to leave the European Union and given that a final judgment would not be in place prior to the current Brexit deadline of 31 October 2019, the reciprocity exemption should not apply to the United Kingdom. Accordingly the freezing order should be granted pursuant to Section 917 para. 2 ZPO.
Greek Debt Crises Reaches Federal Supreme Court
German investors in Greek government bonds have sued the Hellenic Republic in German courts over losses suffered as a result of the restructuring of their bonds. The Greek debt restructuring which triggered this litigation took place in March 2012. Greek bonds were exchanged for new bonds with lower principal, lower interest rates and longer maturity, resulting in a haircut for investors. A large majority of investors accepted the swap, but some investors did not, and went to court. Read More
Frankfurt Court of Appeals Upholds BIT Arbitration Clause Again – Eureko v. Slovak Republic, 2nd Round
We have covered these proceedings between the Slovak Republic and Eureko, a Dutch health insurance provider before. At the heart of the matter is the issue whether European law rendered arbitration clauses in intra-EU bilateral investment treaties (BITs), that is, in BITs between EU member states, inapplicable. To the best of my knowledge these are the first court proceedings addressing the issue: In May 2012, the Frankfurt Court of Appeals upheld an arbitral award that ruled on jurisdiction and arbitrability and held that the tribunal had authority to hear damages claims by Eureko against the Slovak Republic under the Netherlands/Czechoslovakia BIT of 1991. Read More