OGH on EU Mobility Directive in Austria

Mar 24, 2023 Benn-Ibler Rechtsanwälte GmbH

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has issued a detailed opinion on the implementation proposal by the Austrian Federal Government to implement Cross-Border Mobility Directive 2019/2121 at a national level. This implementation proposal is intended to introduce a national act on cross-border company transformations in the EU (in German: Bundesgesetz über die grenzüberschreitende Umgründung von Kapitalgesellschaften in der EU; hereinafter EU-UmgrG). Even though the OGH supports codifying all three cross-border transformation types, the court did criticise some formalities.

Primarily, the OGH does not see much room for action with regard to the implementation of the Directive into Austrian domestic law, expressly pointing out the additional future workload for Austrian company registry courts.

With regard to cross-border company transformations, the OGH is critical of the appointment of conversion auditors as mentioned in Section 12 (3) EU-UmgrG. As in the case of a similar problem in appointing supervisory board members, the OGH considered legal doctrinal argument to be justified, saying that dependency on major shareholders for the appointment of such auditors jeopardises independence. Their appointment by a court would seem to be warranted. Also with regard to protection of creditors, the intended wording of the new EU-UmgrG is ambiguous, as it departs from the more specific wording used in the Directive ‘whose claims […] have not fallen due.’

Also, according to the OGH, with regard to cross-border mergers, Austrian federal lawmakers seem to incorrectly take the existence of notarial acts in other countries as a given fact. Although the implementation of notarial deeds as formal merger requirements is generally supported, this may constitute discrimination against foreign nationals under EU law, since not all Member States have notarial deeds in place. There are also concerns regarding conflicting laws: According to Section 8, second half-sentence of the Austrian International Private Law Act, formal requirements are deemed to be fulfilled if the form of the country in which the legal act is performed is observed. Under these aspects, the required formal requirement would remain problematic.

Finally, the possibility of the existence of divergent decisions, which is provided for in Art 126a (6) and (7) of the Directive, is critically examined. Austrian courts should ‘as far as possible’ coordinate with courts of other Member States if these have already ruled on the appropriateness of share exchange-ratios.

OGH 509 Präs 5/23s (24.02.2023)