by Christian Koller & Laura Kilzer
The Austrian Supreme Court has ruled that neither legal claims for damages against a German publicly listed company arising from the violation of capital market obligations nor a shareholder’s claims against the issuer when purchasing shares on the secondary market are subject to the special provisions on jurisdictions regarding consumer contracts enshrined in Section 4 of the Brussels I Regulation Recast. As the issuer’s shares are traded and the global certificate is held in Germany, the harmful event did not occur in Austria.
In the recent decision Docket number 6 Ob 18/17s of 7 July2017, which deals with an action raised by a private investor residing in Austria against a German publicly listed company, the Austrian Supreme Court held that in this case, legal claims for damages arising from the violation of capital market obligations are not subject to Section 4 of the Brussels I Regulation Recast.
Additionally, the Austrian Supreme Court ruled that Article 17 cannot apply to a shareholder’s claim against the issuer when purchasing shares on the secondary market failing a direct contract with the issuer.
The Supreme Court concluded that, without further indications, the harmful event did not occur in Austria if the issuer, i.e. the defendant in this case, is a German publicly listed company whose shares are traded in Germany – not in Austria – and the global certificate is held in Germany as well. Merely consequential damages are not comprised by Article 7 No 2 Brussels I Regulation Recast.
The Supreme Court did not have to decide the issue whether a choice of court agreement forming part of the issuers’ statutes covers claims for damages arising from the infringement of capital market law.
