English »Legal Updates
No state liability vis-à-vis bank customers
The Austrian Constitutional Court ruled that the Republic of Austria is not liable for damages suffered by customers of an insolvent bank even if these damages were caused by poor supervision by an authority. Around 30 customers of Commerzialbank Mattersburg had filed for damages against the federal government. However, the relevant provision of the law is constitutional. The regulation and supervision of banks are aimed at protecting the functioning of the financial market, not individual investors. (Constitutional Court of 16.12.2021, file G 224/2021 et al.)
7. January 2022
No surrender of the fixed cost subsidy (Fixkostenzuschuss) to the landlord
In a recent decision, the Austrian Supreme Court dealt with the question of whether businesses have to surrender the fixed cost subsidy (Fixkostenzuschuss) to the landlord in the event of a COVID 19-related rent default. The Supreme Court answered in the negative with reference to the purpose of the subsidy. Accordingly, the fixed cost subsidy serves to maintain the solvency and liquidity of affected businesses and not to offset the loss of rent. Furthermore, since the fixed cost subsidy includes an obligation to mitigate damages, the tenant is even obligated to claim rent reductions from the landlord. (3 Ob 184/21m)
22. December 2021
“Perpetual” right of withdrawal for investors in closed-end real estate funds
Characteristics of a closed-end real estate fund are a limited investment volume, a few investment objects, long terms, and very limited exit options. The Austrian Constitutional Court (VfGH) confirmed that if consumers do not receive any investor confirmation or receive an incomplete one, there is an unlimited right of withdrawal; the relevant provisions in the Capital Markets Act (KMG) were confirmed as being in conformity with the constitution. (VfGH dated 25.09.2021 Ref G 130/2021-15)
9. December 2021
ECJ: Procedure under takeover law violates EU law
The Austrian Takeover Commission is an independent authority, not subject to directives, established at the Vienna Stock Exchange. In accordance with the Austrian Takeover Act, it reviews major transactions on the capital market. However, the European Court of Justice sees a lack of legal protection in the current legal situation. The Austrian Takeover Commission is not an independent and impartial tribunal and an effective legal remedy against its decisions is not possible. This is not in line with European law, in particular Art 47 of the European Charter of Fundamental Rights. (ECJ dated 09.09.2021 Ref. C 546/18 and C-605/18).
24. November 2021
Single Resolution Board (SRB) and the bank levy
The European General Court (EGC) annuls the decision of the Single Resolution Board (SRB) regarding the bank levy. The SRB, an EU authority, ensures the orderly resolution of financial institutions threatened with insolvency by, among other things, imposing a bank levy. The plaintiff banks criticized the non-transparent calculation method of the bank levy. The EGC followed this argument and stated that the underlying regulation on the calculation of the bank levy violates EU law. The SRB can still have the ruling reviewed by the European Court of Justice as the court of last instance (EGC T 411/17 dated 23.09.2020).
7. May 2021