Oberster Gerichtshof; 2014-05-20; R. B., G., B.; H Republik; 4 Ob 227/13f
Decision by national courts in the field of European Union law — ECLI:AT:OGH0002:2014:0040OB00227.13F.0520.000
Date: 2014-05-20
Subject matter: Judicial cooperation in civil matters
Origin: Austria

82014AT0520(51)_ENG_SUMJURE
JURE summary
JURE summary
Two Austrian natural persons (the “plaintiffs”) sought a payment as compensation by the Member State of Greece (hereinafter the “defendant”).
The plaintiffs purchased the defendant’s issued bonds from its domestic custodian bank. The defendant had made no payments despite maturity. The defendant had passed the debt restructuring law to consolidate its budget at the creditors’ expense even carrying out a forced conversion against the creditors’ will.
According to the plaintiff, the defendant’s issue of government bonds did not constitute exercise of official power and thus state immunity cannot be claimed. The court’s jurisdiction is based on Article 5(3) (tort liability) of the Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussel I Regulation") and on Article 15 in conjunction with Article 16(1) of the Brussels I Regulation (consumer jurisdiction).
The Court of First Instance (Landesgericht für Zivilrechtssachen Wien) dismissed the action in limine (i.e. without previous hearing or taking of evidence).
The court established that the plaintiffs made no contractual claim. They based their claims only on exercises of the defendant’s official power, which was included in its immunity and therefore, Austrian courts lacked jurisdiction.
The appeals court (Oberlandesgericht Wien) confirmed the Court's of First Instance decision. The asserted claims were a consequence of the forced conversion, which constitutes an exercise of the state’s official power and is covered by immunity. The claims do not derive from the bonds’ original issue.
In the appeal, the plaintiffs made claims against the defendant as a subject of the private sector. The defendant was asked to comply with the terms and conditions and to redeem the bonds as agreed. Therefore, the claim was purely of civil nature, so that the defendant could not rely on its immunity as a state.
According to the Supreme Court of Austria (the “Supreme court”), this appeal was admissible and partially entitled.
The lack of domestic jurisdiction due to immunity of the defendant state was an absolute impediment to action. In this case, cure is not possible.
In the present case, the plaintiffs rely on two bases of their claims.
On one hand, they claim compensation from the defendant for the illegal interference with the right to property. The legislation is an exercise of official power of the state and therefore, the defendant has immunity.
On the other hand, the plaintiffs claim compliance with the terms and conditions, or damages due to failure to comply respectively. In this case, the action has a contractual basis. The defendant appears on the market like any other borrower. In this respect, the domestic jurisdiction cannot be denied for the reason of immunity. As the dismissal is remedied, a civil matter exists within the meaning of Article 1(1) of the Brussels I Regulation and international jurisdiction must be assessed under this regulation.
In this case, it remains open whether Article 15 in conjunction with Article 16 of the Brussels I Regulation establishes a jurisdiction for the enforcement of claims arising from bonds. The Court of First Instance will deliver the action and thus enable the defendant, to engage in the process.
The Supreme Court upheld the dismissal of the action relating to a compensation due to the defendant’s act of legislation. However, it overturned the appeals court’s and the Court's of First Instance other decisions. The Court of First Instance was to begin a new action taking into account the contractual basis (compliance with the terms and conditions).