OGH: No Official Liability for Commerzialbank Liquidator

Jun 23, 2023 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has ruled that no official liability exists on the part of the banking supervisory authority towards Commerzialbank Mattersburg in Burgenland, Austria, and thus towards the liquidator for the fact that insolvency proceedings were not opened sooner due to allegedly faulty banking supervision.

On 14 July 2020, the Austrian Financial Market Authority (Finanzmarktaufsicht, FMA) prohibited Commerzialbank Mattersburg from carrying out banking transactions. As a result, criminal investigations were initiated against those responsible at the bank. Insolvency proceedings were opened against bank assets on 29 July 2020.

The liquidator claimed compensation from the Austrian government by way of official liability for the damage caused to the bank due to the reduction in its equity capital since 1 January 2011 caused by many years of malversation on the part of the responsible executives. The liquidator claimed that supervisory authorities as well as the public prosecutor’s office had not fulfilled their supervisory responsibility and duty to prosecute. Had they done so, the bank would have been forced to cease operations on 1 January 2011 at the latest.

All the courts rejected the claim, including the OGH.

With regard to insufficient banking supervision, the OGH stated that it is not the purpose of banking supervision standards to protect a credit institution from financial loss due to its own lack of proper management. Although it is one of the tasks of bank supervision to counteract bank insolvencies, this pertains to the functional protection of banking supervision law, which is in the general interest of a national economy.

As far as liability by the Eisenstadt public prosecutor’s office is concerned, the OGH stated that it is legally justifiable for a public prosecutor’s office to rely on verification of a whistleblower report and  then not initiate proceedings. Moreover, the regulations governing the initiation of preliminary proceedings do not aim at preventing damage due to offences completely different from those for which preliminary proceedings are to be conducted and which would be discovered by chance in the course of investigative measures.

OGH 1 Ob 223/22h (25.04.2023)