OLG Frankfurt; 2020-07-02; 1 U 111/18
Decision by national courts in the field of European Union law — ECLI:DE:OLGHE:2020:0702.1U111.18.00
Date: 2020-07-02
Subject matter: Judicial cooperation in civil matters
Origin: Germany

82020DE0702(51)_ENG_SUMJURE
JURE summary
JURE summary
The Landesbank Hessen-Thüringen (hereinafter the ‘plaintiff’) filed an action against the French joint-stock company Société Générale (hereinafter the ‘defendant’) demanding the court to order the defendant to provide information and to determine and acknowledge the plaintiff’s claims for compensation relating to the acquisition of 36 share packages totalling to approximately EUR 3.17 billion which had been delivered to the plaintiff by defendant’s legal predecessor.
The parties argued whether the defendant’s legal predecessor was obliged to pay the plaintiff the withheld capital gains tax. After the transaction, the plaintiff received shares, and further a dividend compensation payment instead of the dividend in the amount of the net dividend (1). Having carried out an inspection, the Tax Office denied the plaintiff to deduct the capital gains tax including the solidarity contribution and issued a modified tax bill. According to the Tax Office, the deduction of the capital gains tax was only possible if the capital gains tax had actually been paid, a fact which the plaintiff could not support by any documents. Based on this decision, the plaintiff subsequently had to pay a capital gains tax of EUR 18.4 million and interest in the amount of approximately EUR 4.4 million. This amount was the subject of the claim.
The court holding both local and international jurisdiction was Landgericht Frankfurt am Main (hereinafter ‘the Court of First Instance’) under Article 7(1) of the Brussels I Regulation (2) as a court according to the place of performance. The demand for the provision of information had been mutually declared for settled by both parties. With regard to the determination and payment demand, the Court of First Instance found that the parties concluded a contract of sale and not a mere brokerage contract. The defendant’s legal predecessor was also obliged to pay the capital gain tax. The Court of First Instance ordered the defendant to pay the plaintiff the requested amount pursued by the action.
The appeal lodged by the defendant with the Oberlandesgericht Frankfurt am Main (hereinafter ‘the Court of Appeal’) was successful.
The Court of Appeal joined the legal assessment of the Court of First Instance that the failure to pay the capital gain tax by the defendant represented a violation of its ancillary duties. A seller within a cum-ex trade who paid to the acquirer dividend compensation payment was not obliged to pay the capital gain tax for such payment. The fact that the seller and the depository bank were accidentally the same person was not relevant. The defendant’s legal predecessor sold the shares independently. This fact, however, filled the contract of sale with no other content.
The parties agreeing to a cum-ex trade know already in advance that the seller will not be able to deliver the shares after the dividend record date as it appears before or on that date., This is because the dividend claim associated with the share is discharged on the dividend record day when the net dividend is credited to the shareholder (or its depository bank) and the joint-stock company paid the respective capital gains tax amount to the tax office. In any case, the claim for the payment of a dividend is fulfilled and cannot be transferred after the transfer of the shares following the dividend record day.
Based on the appeal of the defendant, the Court of Appeal changed the decision of the Court of First Instance and rejected the action for being inadmissible.
(1) Amount after the deduction of the capital gain tax including the solidarity contribution.
(2) Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.