Latest updates

Supreme Court evaluates hybrid arbitration agreement
Graf & Pitkowitz Rechtsanwalte GmbH
  • Arbitration & ADR
  • Austria
  • 18 July 2019

The Supreme Court recently considered the validity of a hybrid arbitration agreement which provided for the formation of a tribunal under the International Chamber of Commerce Rules of Arbitration to arbitrate at the Vienna International Arbitral Centre. In this context, the court also considered the consequences of violating procedural rules agreed by the parties and the tribunal's failure to issue a reasoned award.

Virtual currency regulation
  • Banking
  • Austria
  • 12 July 2019

Austria has no domestic legislation that directly applies to virtual currencies, although operations using cryptocurrencies may fall under existing laws. For instance, platforms for purchasing crypto assets which settle payments in euros require a licence under the Payment Services Act 2018. Purely technical services would not be covered by these licensing requirements, but would most likely be captured by the requirement for a general trade licence necessary for carrying on a trade in Austria.

Say on pay and related party transactions: implementation of EU Shareholder Rights Directive II
  • Company & Commercial
  • Austria
  • 03 June 2019

With the deadline for implementing the EU Shareholder Rights Directive II (SRD II) fast approaching, the government recently published a ministerial draft of the Stock Corporation Amendment Act 2019, which addresses the rules on say on pay and related party transactions. The draft seeks to minimise the administrative burden on listed companies by avoiding any 'gold plating'. Further, it closely follows SRD II and takes advantage of business-friendly options.

Vienna Building Code: new provision renders short-term letting illegal
Graf & Pitkowitz Rechtsanwalte GmbH
  • Real Estate
  • Austria
  • 31 May 2019

A new provision in the Vienna Building Code recently entered into force, rendering short-term letting – including through rental services such as Airbnb – illegal in large areas of Vienna. Further, under the new provision, all parts of residential zone buildings that were being used for residential purposes when the provision entered into force – or were built thereafter – may be used only for residential purposes. That said, the new provision may be unconstitutional.

Supreme Court facilitates financing companies with cross-border business
Schoenherr
  • Corporate Finance/M&A
  • Austria
  • 15 May 2019

For the first time, the Supreme Court has upheld a security right granted under German law, even though the asset had been transferred to Austria. Previously, such rights were terminated once the asset was moved from Germany to Austria. The decision will substantially facilitate the financing of companies with cross-border business.

Cannabidiol in food and cosmetics
Preslmayr Attorneys at Law
  • Healthcare & Life Sciences
  • Austria
  • 15 May 2019

While there are signs of greater liberalisation with respect to hemp use internationally, the Austrian government has resisted this trend. In October 2018 the Ministry of Labour, Social Affairs, Health and Consumer Protection published a decree outlining its legal opinion on product regulations which prohibit CBD use in food and cosmetics. However, rather than providing legal certainty, the decree merely reflects headlines relating to the government's narcotics programme.

Supreme Court on hairstyles and discrimination
Graf & Pitkowitz Rechtsanwalte GmbH
  • Employment & Benefits
  • Austria
  • 08 May 2019

An employee recently sued for damages and compensation for gender discrimination when his job application was rejected because he had long hair. Originally unsuccessful, when the employee learned that the defendant's employee handbook contained rules on employees' outer appearance, he sued again and succeeded, as the Supreme Court found that the employee handbook was prima facie evidence of gender discrimination.

Amendments bring overall relief to system charges
Schoenherr
  • Energy & Natural Resources
  • Austria
  • 06 May 2019

The Austrian regulatory authority E-Control is responsible for ensuring an equal energy market and a fair market price. Each year E-Control reviews and defines the system charges for the use of electricity and gas networks on all network levels. The System Charges Ordinance 2019 and the Gas System Charges Ordinance 2019 bring further relief to system charges.

Consultation on implementation of network code on harmonised transmission tariffs
Schoenherr
  • Energy & Natural Resources
  • Austria
  • 29 April 2019

The national regulatory authority E-Control recently published its consultation document on the implementation of the network code on harmonised transmission tariff structures in Austria. The document is structured in line with the Agency for the Cooperation of Energy Regulators consultation template. However, it appears that E-Control paid little attention to maximum transparency and traceability when setting transmission tariffs.

Flashlight decision illuminates compensation guidelines for unlawful use of IP rights
  • Intellectual Property
  • Austria
  • 22 April 2019

The Supreme Court recently had to decide whether the infringer of a registered Community design had to hand over the entire net profit or just a share of profit earned due to its use of an infringed design. The decision has great practical importance, as it gives IP rights holders clear guidelines regarding what to expect when claiming compensation for an unlawful use of their rights.

Restructuring plans and their impact on non-participating creditors
  • Insolvency & Restructuring
  • Austria
  • 05 April 2019

Under the Insolvency Act, once a restructuring plan has been confirmed, the debtor is discharged from its debt and is subsequently prevented from paying its creditors their deficiency or repaying other granted benefits. Consequently, any claims that were not registered during the insolvency proceedings – even if they should have been – fall under this restriction and cannot be repaid. That said, exceptions to the rule exist.

New unified cancellation right for insurance contracts brings legal certainty
Schoenherr
  • Insurance
  • Austria
  • 26 March 2019

Until 2018, Austria had up to five different cancellation rights for insurance policyholders, plus the cancellation right pursuant to Section 8 of the Distance Financial Services Act. Thus, the legal situation was confusing. However, this has finally changed. Since 1 January 2019, a new Section 5c of the Insurance Contract Act provides for one unified cancellation right.

Social security system to undergo restructure – but will it achieve cost savings?
Preslmayr Attorneys at Law
  • Healthcare & Life Sciences
  • Austria
  • 20 March 2019

The Austrian social security system has been characterised by regional and occupational fragmentation and the domination of employee representatives. However, a recent amendment to the Social Security Act proposes merging the provincial social security institutions with the company insurers into one Austrian Health Insurer, which will be the only provider of employee health insurance.

Electric vehicles exempt from emissions-reducing speed limits
Schoenherr
  • Environment & Climate Change
  • Austria
  • 18 March 2019

The Constitutional Court recently dealt with a complaint by an electric vehicle owner who had exceeded an Air Immission Protection Act speed limit. The driver claimed that his vehicle emitted no air pollutants and that the emission-dependent speed limit did not apply to him. The court disagreed. In response to this decision, the federal government created a legal exception for electric cars. However, whether all federal states will introduce an exception to the act's speed limit for electric cars remains unclear.

Influencer marketing – Advertising Council adopts specific rules
Schoenherr
  • Tech, Data, Telecoms & Media
  • Austria
  • 15 March 2019

'Influencer marketing' means taking advantage of bloggers and other persons who have their own social media channels to promote goods and services. While the concept of transmitting arguably hidden advertising is problematic, there are many variations of this and the lines between hidden advertising and personal opinion are often blurred. As such, the Advertising Council recently issued guidelines for dealing with influencer marketing as a specific means of marketing communication.

ECJ rules on Austria's Good Friday dilemma
Graf & Pitkowitz Rechtsanwalte GmbH
  • Employment & Benefits
  • Austria
  • 27 February 2019

The European Court of Justice advocate general recently confirmed that the Austrian regulation which sets out that Good Friday is a paid public holiday only for members of four specific churches is discriminatory. Further, the advocate general concluded that each affected employee could claim holiday pay for past periods, unless such claims were already time barred, in which case claims could be brought against the Austrian state.

Fig leaf for 'naked' cartel
Preslmayr Attorneys at Law
  • Competition & Antitrust
  • Austria
  • 24 January 2019

A recent Cartel Court decision demonstrates how a long-term relationship between Semperit and a group of Thai companies turned into an equally lengthy disagreement, which came to a decisive turning point in the courts. The final blow landed with a decision by the Federal Cartel Authority, which imposed a fine of €1.6 million on Semperit for violating the Austrian Cartel Act and Article 101 of the Treaty on the Functioning of the European Union.

Amendment to Act on the Medical Profession
Preslmayr Attorneys at Law
  • Healthcare & Life Sciences
  • Austria
  • 23 January 2019

The two chambers of the Austrian Parliament recently adopted the government bill on the amendment of the Act on the Medical Profession. The amendment will enter into force following its publication in the Law Gazette, which is expected in late January 2019.

Avoidance of overdraft payments due to preferential treatment
  • Insolvency & Restructuring
  • Austria
  • 21 December 2018

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.

Dispenser for free newspapers – work of art?
  • Intellectual Property
  • Austria
  • 17 December 2018

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.