OGH: Contestability of Association Resolutions

Aug 11, 2023 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) refused to rule the non-admission of a nomination for the election of the executive board of an organisation as a gross error leading to the nullity of the election of the executive committee.

In the original case, an organisation (an association within the meaning of the Austrian Associations Act 2002, Vereinsgesetz, hereinafter VerG) elected a new board of directors on 21 June 2021. A number of different associations were members of the organisation, including one that referred to itself as the Club. A few months before the election of the board, the Club decided to dissolve on 1 June 2021. All memberships were to expire on 31 December 2021. According to the organisation’s statutes, member associations can make nomination proposals. Two nominations were submitted for the election, one of which (Proposal 2) was submitted by the dissolving Club. This proposal also included names of members of the Club.

The chairman of the general meeting was of the opinion that the legal entity of the Club was limited to the rights and obligations necessary for liquidation. The candidature of a member of the Club was not the purpose of the liquidation. Election Proposal 2 was invalid, as were the votes allocated to Election Proposal 2, which is why Election Proposal 1 ultimately won the race.

The association and two members of the Club included in Proposal 2 took legal action against the two members of the board elected under Proposal 1 to stop them from acting as (alleged) presidents or board members.

The plaintiffs were unsuccessful in all of the instances.

The OGH ruled that the adoption of Proposal 1 was not null and void within the meaning of Section 7 VerG. Under Austrian association law, resolutions are void if they seriously violate the law or good morals. Otherwise, illegal resolutions can be challenged and remain in force until they are legally revoked.

According to the OGH, the legal opinion of the chairman, based on the legal capacity of the Club, was not so grossly incorrect as to render the resolution null and void. The resolution was therefore contestable.

However, the plaintiffs did not contest the resolution.

OGH 4 Ob 22/23y (27 June 2023)