Материал: Amy C Kläsener

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Germany

Any and all attribution of actions (of performance agents) can be contractually limited or excluded.Also, the seller (or the individual) may make it clear to the buyer that actions of the individual shall not be relied on and, thus, prevent the attribution of actions of that individual to the company.21 A unilateral statement of the seller would be sufficient to exclude reliance; the buyer does not need to accept, or agree to, it.

Similarly, the knowledge of an individual may be attributed to the seller if the individual can be deemed to be a representative of the seller in connection with the transaction.22 Whether an individual qualifies a ‘knowledge representative’ of the seller might, again, depend on the individual’s involvement in the overall transaction. Likewise, the attribution of knowledge can be contractually limited or excluded.

Remedies

Unwinding – in theory yes, in practice less

In principle, a claim based on intention might result in the right to unwind the contract. However, the unwinding of an M&A transaction is factually, at least, difficult, if not impossible, and becomes even more difficult over time.As a result, unwinding is rarely requested.

Avoidance – but generally only one year after knowledge

Like liability under intentional culpa in contrahendo, the right of avoidance owing to intentional misinformation may not be contractually limited.

Avoidance has a strict time limit of one year after the party became aware of the intentional misinformation.Avoidance makes the M&A transaction invalid ex tunc and gives both parties claims for unjust enrichment to re-transfer anything exchanged under the contract.

Avoidance of M&A transactions is rare in practice,23 even while claims for culpa in contrahendo are quite common in arbitration and both legal concepts have many of the same legal prerequisites. Culpa in contrahendo might generally be more attractive because of the longer time limits (a time-bar of three years at year end, or contractual time-bar provisions) and because its legal effect of award of damages is often more desirable (and easier to achieve) than a re-transfer of anything exchanged under the rules of unjust enrichment.

Damages

Damages are, by far, the most common form of remedy requested in M&A arbitrations (see ‘Measure of damages’ below).

Indemnification

In case of contractual indemnifications (generally against known risks), a party may request not only the compensation for damage already suffered but also to be held harmless and to be indemnified.

21See BGH, 2 June 1995,V ZR 52/94, NJW 1995, 2550.

22See BGH, 2 February 1996,V ZR 239/94, BeckRS 1996, 02110.

23See for an example BGH, 15 June 2005,VIII ZR 118/03, BeckRS 2005, 12786.

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Measure of damages

Reliance damages

The common remedy for intentional culpa in contrahendo is the payment of reliance damages.The seller would have to put the buyer into the position the buyer would have been in if the buyer had not relied on the misinformation. Effectively, the buyer can claim a reduction of the purchase price (see ‘Causation and quantum of claims for culpa in contrahendo’, above).

Expectation damages

In the case of contractual warranties, which under German law are treated as independent guarantees, the usual remedy – if not contractually altered – is the payment of expectation damages. The seller puts the buyer in the position the buyer would have been in if the guarantee had been observed.

Special substantive issues

A few specific substantive law issues are addressed in the following.

Culpa in contrahendo

Culpa in contrahendo in the context of German law is already discussed above in detail.

M&A deals and restrictions on general terms and conditions

German law has a peculiar, and often criticised, feature: it applies the limits, and the review of, general terms and conditions, as enshrined in EU consumer directives, not only to contracts with consumers but also to contracts between businesses.24

Against this background, a discussion exists as to whether an M&A contract could be seen as general terms and conditions, as defined under German law, because the contract has not been negotiated between the parties but simply determined by one party. If that were the case, one could, for example, not validly exclude the liability for gross negligence and even for some lesser degrees of negligence. However, as far as typical M&A transactions are concerned, this discussion is purely academic. In practice, it seems perfectly clear, and arbitral tribunals agree, that an M&A transaction is not subject to the limits governing general terms and conditions under German law.

Data protection in Germany and the EU

Germany has, for some time, had relatively strict data protection rules. For example, when doing fact-finding, email accounts may not necessarily be reviewed without the consent of an employee.

The German data protection rules have to a large extent been overridden by the EU General Data Protection Regulation since 28 May 2018.

24 See § 305 BGB et seq.

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Special procedural issues

There are, depending on the definition and depth of review, any number of issues that might be considered special procedural issues when an arbitration has its seat in Germany. Some are described in the following.

Interim relief

An arbitration clause per se does not limit the possibility to request interim relief from German state courts, for arbitration whether its seat is in or outside Germany.25 However, German courts need to have international jurisdiction for interim relief, and such international jurisdiction can be contractually derogated.

It is widely assumed, but not uncontested, that the parties may not – not even by way of an express agreement that goes beyond a standard arbitration clause – exclude the right of the parties to request interim relief from German courts that have international jurisdiction.26

Request to the court of appeal to confirm validity of an arbitration clause

Even when the seat of arbitration is outside Germany or when another domestic law might exclude the arbitrability of certain claims, a party to an arbitration agreement may request that a German court (specifically the court of appeal that has international jurisdiction in Germany) examines and determines the validity of an arbitration agreement.27

Court assistance in the taking of evidence and confirmation by oath

Again for an arbitration with its seat in or outside Germany, German courts may provide assistance to arbitral tribunals.28 For example, the competent district court may be requested to have a witness confirm under oath statements made in an arbitral hearing when the tribunal has doubts about their correctness.

Expert determination

M&A transactions often make reference to the findings of an expert.29 German law provides that the findings of an expert (in that sense) might be binding on a tribunal in a later arbitration and may only be overruled by the tribunal if the assessment is significantly incorrect.

The use of an expert might result in various legal issues,for example:is it really an expert that the parties meant (Schiedsgutachter) or an arbitrator (Schiedsrichter)? Does instructing an expert (without arbitration) suspend the time-bar? If arbitration is commenced without

25See §§ 1033, 1025.2 ZPO.

26See Geimer in Zöller, Zivilprozessordnung: Kommentar, (32nd edn., Köln 2018) § 1033 ZPO note 12 for the proposition that it is possible to opt out of interim relief from German state courts, also with references for the contrary proposition.

27See § 1032.2 ZPO and the decision of OLG München dated 7 July 2014 in a matter where the author of this Article represented the applicant for a decision on the validity of an arbitration clause, SchiedsVZ 2014, 262 (with English summary).

28See § 1050 ZPO.

29See § 317 BGB.

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the expert having been instructed, what happens in the arbitration? And then in the course of arbitration, who might instruct an expert to determine the findings? The issue presents too many questions for the author to answer in this chapter, but the reader should bear them in mind.

Review of awards by two instances

In contrast to some legal systems, the (limited) court review of awards rendered in Germany is not subject to one instance, but, in principle, to two: the competent court of appeal and the Federal Court of Justice.

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Hong Kong

Ariel Ye, Paul Starr and Yang Fan1

Frequency of M&A disputes

Although there are no empirical studies or surveys as to the frequency of M&A disputes in the Hong Kong Special Administrative Region, we can readily testify, from our own case load, that not only are these types of disputes ever-increasing in number (representing for us about 50 percent of our Hong Kong arbitration case load),2 they also reflect massive rises in the value of disputes (many of which reach into the tens or hundreds of millions of dollars).

There are various reasons for this growth in frequency and value. Mainland China parties increasingly tend to arbitrate their differences, both with international counterparties and each other.A perceived slowdown in world economies fosters disputes.The first emanations of dissent on the Belt and Road Initiative are manifesting themselves in arguments over abandoned or allegedly incomplete transactions.

More and more parties are nominating Hong Kong as their forum for arbitrating disputes, with each of the three administering institutions seeing exponential growth.3

To give some concrete examples, we are handling erstwhile consortia partners’ arbitrations over the implementation of an agreement providing for return of shares in the event of a failed M&A transaction (at HKIAC); a failed acquisition in Central America (at ICC Hong Kong); and alleged non-performance by a European–Hong Kong consortium (at CIETAC Hong Kong).

1Ariel Ye and Paul Starr are partners, andYang Fan is international dispute resolution manager, at King & Wood Mallesons.This chapter reproduces short extracts from Neil Andrews, Contract Law, 2nd Edition © Neil Andrews 2015, published by Cambridge University Press, reproduced with permission.

2The balance being infrastructure-related disputes.

3The three administering institutions in Hong Kong (in alphabetical order) are the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Center (CIETAC Hong Kong); the Hong Kong International Arbitration Centre (HKIAC); and the International Court of Arbitration of the International Chamber of Commerce Hong Kong (ICC Hong Kong).

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