In a judgment last week, the Federal Supreme Court (Bundesgerichtshof) has found a US party liable for damages for bringing an action against its German contractual counterparty in the US in violation of an agreement on the jurisdiction of the German courts. With this judgment, the Federal Supreme Court decided an issue that so far had been controversially debated in the German legal literature. Until this decision, it was not clear whether the violation of a choice of court agreement does not only have a procedural effect, but does also render the violating party liable for monetary damages. (Disclosure: This post is based on the Federal Supreme Court’s press release only, as the full judgment is not yet available. I will provide an update when the judgment comes out.) Continue reading
Transparency in investment arbitration, thanks to Vattenfall suing Germany over the nuclear power exit, has become a topic in the mainstream business press. A recent piece in the business weekly Wirtschaftswoche talked about “back room justice” (“Justitia verzieht sich ins Hinterzimmer”), citing the “Toll Collect” arbitration as an example. “Toll Collect” is not technically a case of treaty arbitration, but a multi-billion dispute about a public-private partnership between the German government and Daimler, Telekom und Cofiroute.
Kapitalanlegermusterverfahrensgesetz (Capital Market Investors’ Model Proceeding Act), or KapMuG for short, is the closest thing German law has to a class action. In its current form, the Act would have expired on October 30, 2012. Early on, there was consensus that the Act would be extended, and German parliament has now decided to do so, for another eight years, but with some modifications.