OGH: Partnership Agreements and Change of Partners

May 19, 2023 Benn-Ibler Rechtsanwälte

The Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH) has clarified the principles according to which partnership agreements are to be interpreted after a change of partners.

The dispute in the main proceedings is based on the following: The parties were married and have two children together. The plaintiff also has a child from his second marriage. The plaintiff is a 90% general partner of the joint limited partnership (Kommanditgesellschaft, hereinafter KG), the defendant is a 10% limited partner. The partnership operates a hotel. The KG was originally founded by the plaintiff and his father. The father left the KG shortly after the defendant joined. The partnership agreement does not contain a succession provision.

The plaintiff now sought a decision that the company should be continued with the plaintiff’s heirs or legatees (without restriction to the joint children of the parties to the dispute). The company had been designed as a family business from the beginning. The company was to be continued with the plaintiff’s heirs or legatees. His father would not have wanted other marital descendants of the plaintiff to be excluded from succession in the company.

According to the OGH, the plaintiff had not been in the right:

Pursuant to Section 131(4) in connection with Section 161(2) of the Austrian Commercial Code (Unternehmensgesetzbuch, UGB), a limited partnership is dissolved by the death of the general partner unless the partnership agreement provides otherwise (such as in this instance). However, even without an explicit provision, a succession regulation could result from the hypothetical will of the founding partners by way of supplementary interpretation of the contract if they did not want the dispositive law to apply – as was the case here.

As a rule, partnership agreements are to be interpreted according to the parties’ intentions (i.e., subjectively). In the case of a change of partners, however, this principle gives way to an objective interpretation of an agreement.

The OGH now clarified as follows: After a change of partners, the subjective intention of the founding partners can only be applied if the new partners were aware of this intention and at least implicitly agreed to it.

With regard to the defendant, there was a lack of consent to the will of the plaintiff and his father.

The claim for a declaratory judgement was therefore not justified.

OGH 6 Ob 211/22f (17.02.2023)