The Supreme Court recently considered whether a rather brief and general notice of arbitration in ad hoc proceedings containing a nomination had properly initiated the arbitration proceedings and was thus sufficient grounds to request the Supreme Court to appoint an arbitrator, following the respondents' refusal to nominate one. The decision is a soft reminder for counsel that sending out incomplete notices of arbitration or nomination requests can be a time-consuming and costly endeavour.
The new Vienna International Arbitral Centre (VIAC) Rules of Arbitration and Mediation recently entered into force. They apply to all arbitration and mediation proceedings initiated after December 31 2017. The amendments to the VIAC rules allow for parties to conduct efficient and cost-effective arbitration and mediation proceedings, while offering enough flexibility when applying them in individual cases.
The Supreme Court recently considered whether proceedings (wrongly) commenced before an Austrian district court to set aside an arbitral award could nevertheless be continued. Notwithstanding the Supreme Court's exclusive jurisdiction regarding the setting aside of arbitral awards, the unusual facts of the case at hand led to the creation of an additional channel of appeals not provided for in the law.
The Vienna International Arbitral Centre (VIAC) recently obtained the right to administer domestic cases. The new law has received a warm welcome in Austria and is another sign of the quality of the VIAC's work and the confidence in its services. The VIAC has already established a working group to implement the proposed changes into the Rules of Arbitration and Conciliation in order to reflect this positive development.
The Supreme Court recently considered whether an arbitral award rendered in connection with licensing for the Austrian First Division Football League had to be set aside because of an alleged infringement of public policy. The decision is particularly interesting because the court had to tackle the sensitive issue of a possible infringement of substantive Austrian public policy in a situation where a party was forced to enter into an arbitration agreement with a dominant counterparty.
The Supreme Court recently extended the scope of the sections of the Consumer Protection Act that protect consumers that accede to a third party's obligation without any economic interest of their own. Although the Supreme Court returned the case to the first-instance court, the guidelines drawn up in this decision will apply to any type of collateral provided in similar situations for the account of a consumer.
The Supreme Court recently confirmed the admissibility and validity of qualified subordination agreements included in general terms and conditions and with respect to consumer transactions. Further, the Supreme Court held that qualified subordination agreements – in particular, those relating to loan agreements – create a specific type of contract. This decision has a significant impact on standard bank loan transactions, especially in restructuring situations.
The Supreme Court recently clarified its position on sureties payable on first demand and confirmed its view on the interpretation of contractual undertakings by which one party assumes a personal liability for a third-party debt. Considering the significant different legal consequences for a beneficiary's position following a qualification as either an abstract guarantee or an accessory surety, the guidelines provided by the court are of the utmost importance.
The Supreme Court recently rendered its first judgment on the admissibility of the use of electronic mailboxes, which are exclusively incorporated and only accessible via the e-banking system of a credit institution for serving client account notices and statements to consumers. This ruling will significantly affect Austrian banking practice.
Following the Fourth Anti-money Laundering (AML) Directive coming into force, Austria transposed the directive into law through two major legislative acts. This update provides an overview of the effects and obligations arising from the implementation of the Fourth AML Directive – in particular, the due diligence that banks will have to undertake on prospective clients.
It is widely understood that the Austrian concept of 'social partnership' (ie, the system for cooperation between the two sides of industry) has largely contributed to peaceful industrial relations. The social partnership recently agreed on a new collective bargaining agreement for the metal industry. However, negotiations in several other trades and industries have followed, and in a less constructive atmosphere, further strikes may be forthcoming.
Under Austrian law, Good Friday is a paid public holiday only for members of four churches. An employee who belonged to none of these churches took issue with this and sued his employer. The case eventually reached the Supreme Court, which requested a preliminary ruling by the European Court of Justice (ECJ). In his recently issued opinion, the ECJ advocate general delivered what will likely also constitute the court's position on the matter.
Parliament recently passed a new law that brings sweeping changes to the Working Time Act and will come into effect on 1 September 2018. The law – which was heavily debated in the media and caused much controversy among the 'social partnership' (the Austrian system for cooperation between the two sides of industry) – sets the stage for more flexibility in a changing work environment.
Determining whether an individual is an employee or self-employed can be risky for both the contractor and engager. Often, no one knows exactly how to qualify an individual until the national insurer claims arrears in social security payments in the wake of an audit. The parties involved hardly ever have legal certainty in advance. The Social Security Determination Act aims to change that.
Under Austrian law, a recommendation letter must be truthful and cannot contain language that would aggravate the professional advancement of the employee. When truthfulness would result in less than lavish praise, employers must resort to a short-form recommendation letter, devoid of any information beyond the type of work performed and the duration of employment. This alternative, although accurate in its lack of praise, can aggravate an employee's career prospects.
The Insolvency Act provides insolvency administrators with an abundance of tools to challenge any actions committed by a debtor during a crucial period prior to the opening of insolvency proceedings. Two recent Supreme Court decisions summarise the existing judicature and further clarify the elements of avoidance due to preferential treatment.
Before the most recent update to the online FAQ section by the responsible authority, the question of whether Beneficial Ownership Register Act compliance is an insolvency administrator's duty was unclear. Due to the tight timeframes for complying with the act and the range of practical problems arising from it, the question has caused headaches for insolvency law practitioners in Austria.
If a managing director of a company makes payments after a substantive insolvency, they may be liable for damages under the Statute on Limited Liability Companies. Managing a company in a crisis situation requires special diligence and care. In order to avoid unpleasant surprises later on, where possible, the admissibility of envisaged future payments should be checked in advance.
The Insolvency Code was recently amended in response to the introduction of the EU Insolvency Regulation, creating – for the first time – specific rules for the insolvency of corporate groups in Austria. From a practical standpoint, this approach is welcome, as it may lead to faster and more efficient insolvency proceedings. It remains to be seen how the new rules will affect insolvency practice and whether coordination proceedings according to the EU regulation will be applied in practice.
In some cases of insolvency, it may be necessary to take special measures which affect the debtor or third parties in order to prevent the insolvent assets from diminishing. These cases are governed by Section 78 of the Insolvency Code, which offers the possibility of ordering individual protective measures with regard to the debtor and third parties. In particular, recent case law has extended the scope of application of these protective measures.
The Supreme Court recently set out clear principles regarding the protection of a work of visual art under the Copyright Act where technical functions played a role. In its decision, the court explained that the assessment as to whether a (visual) piece of work is actually protected by copyright must be assessed by the court as a legal issue only. There is no room to consider the opinion of experts or any other third parties.
The Supreme Court recently clarified the circumstances in which the burden of proof regarding the exhaustion of trademark rights shifts from the defendant to the trademark owner. It made clear that unless the defendant can prove a concrete risk of partitioning markets, it is up to the defendant to prove that the trademark rights relied on by the plaintiff are exhausted. This should be borne in mind when raising this defence.
The Supreme Court recently affirmed once more that the exemptions to the principle of exhaustion of trademark rights must be construed narrowly. In its decision, the court made clear that once trademark rights are exhausted, resellers may use not only word marks, but also figurative marks without any limitations when advertising or reselling original products.
In a welcome development of Austrian copyright law, the Supreme Court recently ruled that a combination of works by two artists does not constitute a joint work if it can be separated, even if the works involved were created for the sole purpose of being combined as a jointly planned contribution. Strong indicators of whether parts of a work are separable are the individual marketability and possible depreciation of the separated parts.
Parliament recently transposed parts of EU Directive 2015/2436 into national law. Most important is the introduction of certification marks, which did not previously exist under Austrian law. Other provisions of the bill concern the division of trademark applications, the shortening of the validity period of a registration and the reduction of the registration fee.