The Austrian Supreme Court (6 Ob 116/25i) recently ruled that, notwithstanding Section 10 of the Austrian Private International Law Act (IPRG), Austrian courts have jurisdiction over corporate disputes regarding resolutions of corporate bodies (in this case, a general meeting of shareholders) if the company has its registered office in Austria and is thus entered in the Austrian commercial register, even if its place of central administration (in this case, the general partner GmbH) is located in Germany.
The plaintiff, a corporation under Italian law based in Milan, was a shareholder in a GmbH & Co KG based in Kitzbühel (Tyrol). The GmbH & Co KG is registered in the Austrian commercial register.
The general partner of the GmbH & Co KG is a GmbH based in Germany. In managing the (Austrian) GmbH & Co KG, the general partner GmbH provided services partly in Austria and partly in Germany.
The plaintiff filed a lawsuit with the Innsbruck Regional Court seeking a declaratory judgment that the shareholder resolution regarding its exclusion as a partner of the GmbH & Co KG was invalid.
The defendant shareholders argued that, despite the GmbH & Co KG’s "registered office" being in Austria, the Innsbruck Regional Court lacked international jurisdiction over the corporate dispute because the company’s business was managed from Germany by the German general partner GmbH, meaning its "place of central administration" was in Germany. The defendants sought to derive this from Section 10 of the Austrian Private International Law Act (IPRG), which governs the personal statute of a company and is based on the "actual place of central administration," in conjunction with Article 24(2) of the Brussels I Regulation.
The question of the international jurisdiction of national courts Article 24(2) of the Brussels I bis Regulation provides that, regardless of the parties' domicile, the courts of the Member State in which a company or legal entity has its "seat" have exclusive jurisdiction over proceedings concerning the validity of the decisions of its organs. In determining the location of the seat, the court must apply the rules of its own private international law (PIL). The Brussels I bis Regulation thus refers to the PIL of the court seized—in this case, Austrian PIL. Section 10 of the Austrian PIL, in turn, refers—at least according to its wording—to the company's place of central administration.
Section 10 of the Austrian Private International Law Act (IPRG) was enacted many years before Austria joined the European Union and could not, therefore, take into account the subsequent development of Union law and its influence on national law.
The Supreme Court now provides a detailed justification—incorporating the case law of the CJEU—that a company validly incorporated in an EU Member State in accordance with its laws must be recognized in another Member State in the legal form in which it was incorporated, regardless of the location of its actual administrative seat. This applies even if the company only has its registered or statutory seat abroad while maintaining its actual administrative seat in Austria from the outset. In these cases, the personal statute of a company validly established in an EU Member State in accordance with its laws (the company statute) is—contrary to Section 10 IPRG—the
The Supreme Court rightly points out that applying Section 10 IPRG in cases where the administrative seat is relocated, even within the scope of the EU freedom of establishment, could lead to a domestic company losing its existing company statute and being subject to the law of the host state. This would be the case, for example, if the private international law of the host state itself follows the seat theory and accepts the referral of Section 10 IPRG. This would result in a change in the substantive company law applicable to the company ("change of statute"), which would lead to significant uncertainties, particularly regarding the company's legal capacity and the liability of its shareholders. Within the scope of the freedom of establishment, the essential purpose originally pursued by the Austrian legislature with Section 10 IPRG—to enforce economic regulatory concepts and protect against circumvention, especially through purely formal foreign incorporations, or to ensure competitive equality—would no longer be guaranteed. For companies incorporated under Austrian law, the application of Section 10 IPRG would create disadvantages that would significantly hinder their mobility in this respect. The changes in the legal environment due to the after the enactment of Section 10 IPRG, brought about by Austria's accession to the EU, could naturally not have been foreseen by the legislature at the time the IPRG was introduced. Therefore, Section 10 IPRG must be teleologically reduced and should not be applied to companies incorporated under Austrian law with a statutory seat in Austria whose actual seat of central administration is either located abroad from the outset or was subsequently relocated abroad; instead, the incorporation theory and thus domestic law must be applied in these cases.
This must be assumed at least in cases where the company's actual seat of central administration is located in another EU/EEA country, as a subsequent legislative gap has arisen due to the effects of the EU freedom of establishment.
Even if the administrative seat of the GmbH & Co KG in question is located in another EU country (in this case, Germany) because the general partner manages the business of the Kitzbühel-based GmbH & Co KG from Germany, the Regional Court of Innsbruck has international jurisdiction over the legal dispute in question.
The jurisdictional dispute in question has taken two and a half years since the Regional Court of Innsbruck concluded the taking of evidence on the question of jurisdiction on January 30, 2024, and closed the proceedings to decide on the objection of lack of international jurisdiction, with the Supreme Court's decision alone accounting for nearly one and a half years of that time.
