Legal Updates

De-merger is not a good reason to terminate

In a recent case, the Supreme Court for Civil Matters had to interpret the Austrian Demerger Act in accordance with a European Directive. The Supreme Court for Civil Matters ruled that the issuer of a bond shall not terminate a legal relationship which is otherwise valid for an indefinite period of time with investors in these bonds. A termination for cause is only available to the issuer, if maintaining the legal relationship is not reasonable for him anymore. (1Ob93/16g)

30. August 2016

Dying: Not a reason to enforce security

The Supreme Court for Civil Matters ruled in a recent case, that the death of a borrower doesn’t automatically entail a right of the bank to enforce security. As a general rule, the loan agreement is still valid after the death of the borrower. Good cause to terminate the loan agreement only exists if the repayment of the loan is jeopardized due to deterioration of the financial situation of the borrower. (9Ob35/16m)

13. July 2016

Incomplete is also wrong

Market manipulation can be committed in many different ways, one of them being disseminating information which gives false or misleading signals. In a recent decision the Supreme Administrative Court (VwGH) ruled that such market manipulation can also be committed by disseminating incomplete information. Also it does not matter how likely it is that such market manipulation will have a “significant effect” – the latter is a requirement solely for insider information but not for market manipulation. (2015/02/0200)

12. June 2016

If it’s written in the prospectus, it must be true?

The Brussels I Regulation requires an agreement on a jurisdiction clause; a clause contained in a prospectus for bonds fulfills the agreement-requirement only if the contract signed by the parties upon the issue of the bonds on the primary market expressly mentions the acceptance or contains an express reference to the prospectus. But what about a third party acquiring the bonds? Such third party is only bound by the jurisdiction clause if he succeeded to the rights and obligations attached to the bonds and had the opportunity to acquaint himself with the prospectus. And if not? The insertion of a jurisdiction clause into a prospectus may still be regarded as usage in international trade or commerce for purposes of the Brussels I Regulation provided that such conduct is generally and regularly followed by the operators in the concerned sector and either the parties had previously commercial or trade relations in the sector or the conduct is sufficiently well known. (C‑366/13)

8. May 2016

“Any” means “any”

Austrian investment fund law aims at controlling personal transactions of certain managers and employees. To this end it is required that the management company be informed of any personal transaction of a relevant person; certain personal transactions of relevant persons be prevented altogether. In a recent decision the Supreme Administrative Court (VwGH) ruled that “any personal transaction” really means any; the transaction does not need to fulfill any additional requirement in order to trigger the information obligation. (2016/02/0004)

5. May 2016