Kottke decision

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The decision E-05/10 of the EFTA Court of 17 December 2010 became known as the Kottke decision (also known as the Kottke judgment or Kottke report ) , which

  • On the other hand, the same decision found that such discrimination was justified on grounds of general interest "if the national provision is both necessary and not disproportionate in order to achieve the intended purpose".

Decision history

facts

Joachim Kottke (plaintiff) lives in Germany and acts as executor for a deceased German testator. The plaintiff brought an action before the Princely Liechtenstein Regional Court , with which he sought that various orders from the deceased to the Presidential Institution based in Vaduz , (Liechtenstein), regarding the establishment of the Sweetyle Foundation , also based in Vaduz, be void or recognized or revoked as being legally invalid.

The Presidial Anstalt and the Sweetyle Foundation (defendant) applied in the proceedings, based on Section 57 (1) of the Liechtenstein Code of Civil Procedure (ZPO), to provide the plaintiff with a security deposit for the litigation costs allegedly incurred in this procedure in the amount of CHF 125,000. - impose.

The Princely Liechtenstein Regional Court granted the defendant's request and the plaintiff had within 4 weeks

  • CHF 125,000 (around EUR 80,000) as security for the litigation costs of the defendant parties and as
  • Security deposit for court fees an additional CHF 4,000 (around EUR 2,700)

had to be shot in court (total approx. EUR 82,700). If the full payment was not made in due time, the complaint would have been declared withdrawn by the regional court at the request of the defendant parties and the plaintiff would not have obtained legal protection.

The plaintiff appealed against this decision to the Princely Liechtenstein Supreme Court .

Decision of the Liechtenstein State Court of Justice in 2008

The Kottke decision of the EFTA Court is preceded by the decision of the Liechtenstein State Court of Justice (StGH) of June 30, 2008. The StGH repealed Sections 56 to 62 of the Liechtenstein Code of Civil Procedure as unlawful to the EEA and also unconstitutional.

The Liechtenstein Parliament later determined a year an amendment to the Civil Procedure and the repealed from StGH §§ set 56 to 62 ZPO almost unchanged reinstated.

Request to the EFTA Court

On the basis of a ruling of May 19, 2010, the Princely Liechtenstein Court of Justice has decided whether the prohibition of discrimination contained in Article 4 of the EEA Agreement in particular entails the imposition of litigation security for plaintiffs who are domiciled in another member state of the EEA Agreement, prohibits, if plaintiffs resident in Liechtenstein do not have to provide such security for the costs of litigation, requests the EFTA Court of Justice for a decision.

Reasoning of the plaintiff

The plaintiff submitted in the proceedings that the process cost security provision represented a significant restriction of his legal position, which unduly hindered him from prosecuting in Liechtenstein, if not even impossible. The plaintiff further asserted that a national regulation such as that set out in Section 57 (1) ZPO treats plaintiffs differently depending on their place of residence, namely in such a way that certain obligations are imposed on plaintiffs who are not domiciled in Germany, but not on plaintiffs with domestic domicile be imposed. This leads to a disadvantage especially for nationals of other EEA states, since people without a domestic residence are in most cases foreigners. Article 57 (1) ZPO thus leads to indirect discrimination on the basis of nationality, which is in contradiction to the prohibition of discrimination laid down in Article 4 EEA. There is also no justification for such indirect discrimination and, if necessary, milder means are available. The plaintiff also pointed out that the functionality of the judiciary in the EU member states was not jeopardized in the past by the abolition of process cost certainty vis-à-vis EU citizens (argument of the Liechtenstein government and the defendant - see below). It is also not attributable to the plaintiff if the Principality of Liechtenstein has so far only concluded two jurisdiction and enforcement agreements (none of them with Germany).

Reasoning of the defendant

The defendants argued that “even if it was assumed that Section 57 ZPO constituted indirect discrimination within the meaning of Article 4 of the EEA Agreement, (…) this was justified on grounds of the functioning of the civil justice system. The litigation cost security is intended to prevent a foreign plaintiff from taking legal action in court without incurring a financial risk in the event of failure. Against the background that the execution of Liechtenstein cost decisions is impossible in Germany and in other EEA member states, the defendant defendant in the lawsuit would have to initiate new legal proceedings in order to be able to collect its cost title if the defendant complainant showed unwillingness to pay . The defendants are of the opinion that the provision on process cost security does not constitute unjustified discrimination within the meaning of EEA law, since it ensures that the judicial pursuit and enforcement of a claim for reimbursement of costs is factually and legally possible. "

European Commission

The Commission does not consider the functioning of the courts in other EEA member states to be threatened if no litigation security deposit is required. The Commission also agreed with the plaintiff that the functioning of the judiciary in the EU Member States will not be jeopardized by the abolition of process cost certainty.

In its opinion, the European Commission asked the EFTA Court to answer the question of the Princely Liechtenstein Higher Court as follows: “Article 4 of the EEA Agreement is to be interpreted in such a way that the application of a domestic provision is excluded according to how based on Section 57 of the German Code of Civil Procedure (ZPO), plaintiffs in civil proceedings are obliged, upon request, to provide security for the costs of litigation if they are domiciled in an EEA member state other than Liechtenstein or in a state in which judgments by a Liechtenstein court can be executed on the basis of an enforcement agreement. " The European Commission, like the plaintiff, did not see any possibility of justifying such a national obligation as in Section 57 (1) ZPO.

EFTA Surveillance Authority

The EFTA Surveillance Authority (ESA) has submitted extensive statements to the EFTA Court of Justice and, like the European Commission, has also carefully analyzed the situation. Based on the results of this analysis, she asked the EFTA Court to answer the question of the Princely Liechtenstein Higher Court as follows: "Article 4 of the EEA Agreement is to be interpreted in such a way that the obligation of plaintiffs domiciled in another EEA member state to To provide security for litigation costs while plaintiffs residing in Liechtenstein are not obliged to provide such security constitutes a violation of this article. ”The EFTA surveillance authority has not recognized grounds for providing security for litigation costs such as Section 57 (1) Liechtenstein ZPO.

Argumentation of the government of the Principality of Liechtenstein

"In the opinion of the government of the Principality of Liechtenstein, the functionality of the administration of justice, which is an essential part of the Liechtenstein constitutional order, would be jeopardized without regulations on the provision of securities, as laid down in §§ 56 f ZPO."

The government is further of the opinion “that a system for the guarantee of legal costs claims even helps to facilitate and increase cross-border trade. In their view, the lack of these regulations and the resulting cost risk would offer economic operators an incentive to prefer services and deliveries from providers from their own country or from those EEA countries in which claims for reimbursement of costs from civil litigation can be enforced quickly and effectively. "

If Section 57 of the ZPO constitutes indirect discrimination within the meaning of Article 4 EEA, this provision is in any case justified for objective reasons in the public interest and does not go beyond what is necessary to achieve the aim pursued.

Effects

Effects in the area of ​​the EEA member states

The following effects arise from the problems raised by the parties to the proceedings and the arguments raised in the judgment and the report for the hearing on the “Kottke” decision (E-05/10). These effects will be significantly influenced by the future case law of the national courts, so that a final assessment (criticism) is not yet possible.

With the decision “Kottke” (E-05/10), the EFTA Court of Justice has placed a high degree of responsibility on the courts of the EEA member states for the future. The courts are now obliged to provide comprehensive clarifications with regard to the admissibility of a process cost guarantee before each proceeding with a cross-border reference and must increasingly monitor the changes in the case law of the ECJ . There is a risk that the coherence between the ECJ and the EFTA Court will be destabilized.

Liechtenstein, Iceland and Norway financial markets

The imposition of litigation cost security on EEA citizens residing in another EEA member state can also mean disadvantages for part of the economy. In particular with regard to the currently very cautious financial services markets, such a potential obligation can lead to EEA member states with financial centers that

  • impose such a process cost security deposit or
  • have not concluded any agreements on the enforcement of judicial decisions,

be avoided by financial intermediaries . Prudent investors in financial instruments could be discouraged from getting involved in such an EEA member state or an already existing investment in the knowledge that in the event of a legal claim as plaintiff they must first make payments to the court before they can obtain legal protection relocate.

Legal consequences in Liechtenstein

In Liechtenstein, the “Kottke” decision (E-05/10) has since led to an actuarial bail being imposed on application by the (mostly Liechtenstein) defendant in all proceedings relating to foreign countries. The extent to which this is compatible with the above-cited case law of the EFTA Court of Justice with regard to a responsible examination of individual cases by the courts has not been legally examined in Liechtenstein. Whether the significant reduction in Liechtenstein companies with foreign participation since 2009 (around - 50%) is directly related to this restrictive practice has also not yet been examined (see: Development of Liechtenstein companies .)

Homogeneity to the case law of the ECJ

The decision “Kottke” (E-05/10) of the EFTA Court of Justice may impair the homogeneity of the legal interpretation between the EFTA Court of Justice and the ECJ.

In the case of Data Delecta, the ECJ clearly stated its position in connection with Art. 12 EGV (Art. 18 TFEU) on the question of a process cost guarantee. In this regard, the ECJ ruled that “such legal provisions must neither lead to discrimination against persons to whom Community law grants the right to equal treatment nor restrict the fundamental freedoms guaranteed by the Community”. The ECJ came to the conclusion that a national regulation on the provision of process cost security is subject to the general prohibition of discrimination, "even if only indirectly - effects on the intra-Community exchange of goods and services" exist.

Justification reasons, such as those worked out by the EFTA Court for reasons of general interest with regard to the Liechtenstein process cost security provision in Case Kottke (E-05/10), have not yet been recognized by the ECJ in this context.

The “Kottke” decision (E-05/10) can therefore mean a paradigm shift for EEA law and the cooperation between the ECJ, the EFTA Court of Justice and the national supreme courts , the effects of which are not yet fully apparent. The dynamic rule of interpretation “in dubio pro communitate” could now also take on a new meaning with regard to the EEA Agreement .

Legal cases cited in the Kottke decision

ECJ ( in ascending order by year )

  • Rs 22/80 Boussac, ECR 1980, 3427
  • 186/87 Cowan ./. Trésor public, Coll. 1989, 195
  • C-175/88 Biehl, Coll. 1990, I-1779
  • C-6/90 and C-9/90 Francovich and others , Coll. 1991, I-5357
  • C-204/90 Bachmann, Coll. 1992, I-249
  • C-330/91 The Queen ./. Inland Revenue Commissioners, ex parte Commerzbank AG, Coll. 1993, I-4071
  • C-20/92 Hubbard ./. Hamburger, Coll. 1993, I-3777
  • C-398/92 Mund und Fester, Coll. 1994, I-467
  • C-279/93 Tax Office Cologne-Altstadt ./. Schumacker, 1995 Coll. I-225
  • C-29/95 Pastoors ./. Trans-Cap GmbH, Coll. 1997, I-285
  • C-43/95 Data Delecta Aktiebolag, Coll. 1996, I-4661
  • C-323/95 Hayes, ECR 1997, I-1711
  • C-122/96 Stephen Austin Saldanha and MTS Securities Corporation, 1997 Coll., I-5325
  • C-274/96 Bickel and Franz, Coll. 1998, I-7637
  • C-224/00 Commission ./. Italy, ECR 2000, I-2965
  • C-291/09 Francesco Guarnieri & Cie (not yet published in the official collection)

EFTA Court of Justice ( in ascending order by year )

  • E-9/97 Sveinbjörnsdóttir, Coll. 1998, 95
  • E-3/98 Rainford-Towning, ECR 1998, 205
  • E-1/00 Íslandsbanki-FBA Coll. 2000–2001, 8
  • E-2/01 Pucher, Coll. 2002, 44,
  • E-2/02 Technologies Bau- und Wirtschaftsberatung GmbH and Bellona Foundation Coll. 2003, 52
  • E-8/04 ESA ./. Liechtenstein, Coll. 2005, 46
  • E-10/04 Piazza, Coll. 2005, 76
  • E-1/09 ESA ./. Liechtenstein, judgment of 6 January 2010 (not yet published in the official collection)

Web links to the decision (EFTA Court of Justice)

literature

  • Gustav Walker : Disputes from the international civil procedure law with special consideration of the new civil procedure laws . Manz, Vienna 1897.

Individual evidence

  1. ^ Decision of the EFTA Court of Justice E-05/10, margin no. 52.
  2. ↑ The exchange rate given here or the conversion from CHF to EURO correspond to the rate in the year in which the process cost security was imposed (2010) and not the current status.
  3. ↑ StGH 2006/94
  4. ↑ Announcement of the State Court of 8 July 2008 on the immediate repeal of Sections 56 to 62 ZPO, Liechtenstein LGBl. 176/2008.
  5. ↑ LGBl. 206/2009
  6. ↑ According to Article 34 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice, the EFTA Court of Justice can be invoked by the Member States to interpret the EEA Agreement.
  7. ↑ Report of the hearing in Case E-5/10, margin no. 19th
  8. ↑ Report of the hearing in Case E-5/10, margin no. 19 ff., 20.
  9. ↑ Report of the hearing in Case E-5/10, margin no. 21 ff.
  10. ↑ Note: Apart from Austria and Switzerland, Liechtenstein has not concluded any agreements on the enforcement of judicial decisions and does not grant reciprocal rights (Treaty of April 25, 1968 between the Principality of Liechtenstein and Switzerland on the recognition and enforcement of judicial decisions and arbitration awards in civil matters of July 5, 1973 between the Principality of Liechtenstein and Austria on the recognition and enforcement of judicial decisions and arbitral awards in civil matters). Liechtenstein is not a member of the Lugano Convention (Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters).
  11. ↑ Report of the hearing in Case E-5/10, margin no. 25 ff.
  12. ↑ Report of the hearing in Case E-5/10, margin no. 100.
  13. ↑ Written statement by the Commission in Case E-5/10, margin no. 32.
  14. ↑ Report of the hearing in Case E-5/10, margin no. 81 ff., 105 with reference to the judgment of the Princely Liechtenstein State Court (margin no. 93) and Anton Schäfer in The Security of Litigation Costs - A Discrimination? In: LJZ . 2006, p. 17 ff. (Rz. 93 in conjunction with Fn. 33)
  15. ↑ Report of the hearing in Case E-5/10, margin no. 49 ff., 80.
  16. ↑ Report of the hearing in Case E-5/10, margin no. 35.
  17. ↑ Report of the hearing in Case E-5/10, margin no. 40.
  18. ↑ As a reason for public interest, the government names the functionality of the administration of justice, a common basic principle in the constitutional structure of the EEA contracting parties. Hearing report of the hearing in case E-5/10, margin no. 42 ff.
  19. ↑ Report of the hearing in Case E-5/10, margin no. 41.
  20. ↑ The Commission pointed out that “the functioning of civil justice is a principle that is common to the constitutional structures of the EEA contracting parties, and that it is a necessary element of ensuring effective access to the courts, which is an indispensable part the EEA legal order. In this context, the EFTA Court found that the functioning of the administration of civil justice could in principle actually be regarded as a cause of public order. The Commission notes that, since this is an exception to a fundamental principle of the EEA Agreement, objective reasons to justify discriminatory national legislation must be interpreted strictly. ”Report of the hearing in Case E-5/10, Margin no. 97 f.
  21. ↑ The Liechtenstein government also sees this danger clearly - see the report from the hearing in Case E-5/10, margin no. 40.
  22. ↑ See for example: Directive 2004/39 / EC on markets in financial instruments
  23. ↑ E-05/10 - Dr. Joachim Kottke v President Institution and Sweetyle Foundation .
  24. ↑ Art 105 ff EEA Agreement.
  25. ↑ Case C-43/95, Data Delecta Aktiebolag, ECJ judgment of September 26, 1996, ECR 1996, I-4661.
  26. ↑ Case C-43/95, Data Delecta Aktiebolag, ECJ judgment of September 26, 1996, ECR 1996, I-4661, margin no. 15th
  27. ↑ Teleological interpretation : In case of doubt (in dubio), an interpretation of Community law takes into account the objectives of the treaties and how the further integration of the community is best supported. The design rule is dynamic because it adapts to the respective integration level.