The COVID-19 crisis continues to plague much of Europe. To get an overview of its effects across CEE – both on investment in the region and on the legal industry itself – we reached out to the members of Pontes the CEE Lawyers legal alliance, a Regional Sponsor at the upcoming Dealer’s Choice International Law Firm Summit.
As does every crisis, the COVID-19 pandemic has created an influx of high-profile litigation matters. A significant disparity has emerged during the crisis: Larger litigation departments – like our firm – are extremely busy, while some solo practitioners are suffering severely from the economic downturn.
The first rumors of a new infectious disease outbreak in late December 2019 initially only drew modest attention. Soon it became clear that the world had underestimated the spreading pandemic, and, despite Austria’s distance from the region of origin in Asia, by March 2020, the spread of COVID-19 in Europe had become a focus of concern. As hospitals struggled to deal with increasing numbers of coronavirus cases, governments throughout Europe – including Austria – imposed lockdowns that brought society as we know it to an abrupt halt. Overnight, European cities became ghost towns, with shops and services shuttered. Revenues vanished and, through no fault of their own, businesses had to face a difficult financial reality.
Lately, the effects of COVID-19 have caused a significant surge in interest by high net-worth individuals (HNWIs) on global migration, as political stability and safety, access to well-functioning healthcare and education systems, and the ability to maintain a high standard of living became even more important.
A year has passed since the outbreak of COVID-19 in Austria and many legal problems remain unresolved. The problem seems new, but the legal provisions of the Austrian Civil Code em-ployed to deal with thae consequences of the pandemic are more than 200 years old, and were drafted in order to deal with quite different pandemic effects. The law refers to “extraordinary events” such as “fire, war or pandemic, major floods, weather events.” There is agreement that COVID-19 is a pandemic and therefore an extraordinary event in the meaning of the law.
After many years of liberalization and globalization, recent years have shown a reversal of the European Union’s approach concerning foreign direct investment from third countries. As in much of the world, the EU has taken a more restrictive view than in the past, and this view is reflected on the legislative level with the FDI Screening Regulation.
One of the most important issues facing businesses in CEE is the impact of the ongoing COVID-19 pandemic on litigation and arbitration. In-person court and arbitration hearings have become problematic, if not impossible, and the importance of certain boilerplate contract clauses has skyrocketed. Zsolt Okanyi, Global Head of Dispute Resolution at CMS, Malgorzata Surdek, Head of Dispute Resolution at CMS Poland, and Daniela Karollus Bruner, Head of Dispute Resolution at CMS Austria, evaluate the current situation.
New Counsel Victoria Pernt on Schoenherr’s impressive Arbitration practice.
On May 12, 2020 after a long-lasting proceeding between the general importer Peugeot Austria and Austrian Peugeot dealer Buechl, the Austrian Cartel Court decided in first instance that Peugeot Austria had abused its market power vis-à-vis Buechl. The dispute revolved around the imposition of contractual conditions by Peugeot which, in the opinion of the court, put dealers at a substantial economic disadvantage. Peugeot Austria has expressed its surprise at the court’s decision and has announced that it will file an appeal.
As Europe begins a tentative re-opening following several difficult months of quarantining, social distancing, and working-from-home, we spoke to CMS’s Warsaw-based Employment Partner Katarzyna Dulewicz and Vienna-based Dispute Resolution Partner Daniela Karollus-Bruner for their perspective on the process.
The COVID-19 pandemic has revealed the vulnerability of supply chains worldwide, creating an increased awareness of the need to protect critical domestic infrastructure. On April 3, 2020, the Austrian Parliament adopted a motion encouraging the Minister for Digital and Economic Affairs to put forward (“as soon as possible”) a government bill designed to protect companies in key industries from takeovers by third country entities. Eight weeks later the resulting bill was presented to the public.
In Austria, like in many other countries, the current restrictions due to the COVID-19 situation are causing extensive and opaque changes in social life and related legal issues. Although home office has become well established, it is still associated with limited opportunities for personal interaction. The situation raises many legal questions, one of which is how people can pragmatically conclude or sign a legally effective contract.
On March 11, 2020, CEE Legal Matters reported that Kinstellar had advised Austria’s European City Estates – a group of companies owned by the Austrian Humer Private Foundation – on its acquisition of the 22,000-square-meter Rosum office complex in Bratislava from Penta Real Estate, which was advised by Skubla & Partneri.