AUSTRIA Law and Practice Contributed by: Farid Sigari-Majd and Mathias Lehner, Freshfields
It is possible to apply for a preliminary injunction ( einst- weilige Verfügung ) under Austrian law if the applicant demonstrates a prima facie claim and an imminent threat to its legal position. The court may require a bond or security from the applicant to cover costs and potential damages if the claim ultimately fails. In practice, injunctions are not frequently used or granted in Austrian commercial disputes. 2.6.5 Domestic Courts’ Approach to Foreign Laws and Judgments Austrian courts will normally uphold a choice of law in accordance with and subject to the limitations of the Rome I Regulation (see 2.1.2 Application of For- eign Laws for details and limitations). Further, courts in Austria would uphold a jurisdiction clause in favour of the courts of an EU member state and certain other jurisdictions (eg, England, Iceland, Liechtenstein, Nor - way and Switzerland) in accordance with and subject to the limitations of Regulation (EU) No 1215/2012 (the “Judgment Regulation”), the Lugano Convention or the Hague Convention. Forum clauses in favour of the courts of other coun - tries are usually upheld only if there is a bilateral treaty on the recognition and enforcement of judg - ments between the relevant forum state and Austria (see 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards ). Given the absence of such trea - ty between Austria and the USA, Austrian courts have accepted jurisdiction despite an exclusive choice of court clause in favour of New York courts. A waiver of (sovereign) immunity granted by the com - petent person or body will generally be recognised by Austrian courts. A lack of waiver cannot normally be remedied implicitly by pleading on the merits without raising any objections. 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards Austrian courts would recognise and enforce judg - ments from EU member states and certain other juris - dictions (eg, England, Iceland, Liechtenstein, Norway and Switzerland) under either the Judgment Regula - tion, the Lugano Convention or the Hague Conven - tion. Final and binding judgments from countries not
covered by these laws or treaties are recognised in Austria based on reciprocity provided in a bilateral treaty with such country. Importantly, no such treaty currently exists between Austria and the USA. Thus, a judgment rendered by a New York court is prima facie not enforceable in Austria. Austrian courts may refuse to recognise and/or enforce a foreign judgment, inter alia, if: • recognition would be contrary to public policy; • the defendant has not been duly served with the claim and has made use of any appeal available; or • the judgment is irreconcilable with another (con - flicting) judgment. Foreign arbitral awards may be refused recognition and/or enforcement in accordance with the UN Con - vention on the Recognition and Enforcement of For - eign Arbitral Awards (the “New York Convention”) (see 2.6.12 Enforcement of Foreign Arbitral Decisions ). 2.6.7 Judgments in Foreign Currencies Austrian courts may give a judgment in a currency other than the euro. Such judgments may be required to be converted into euros for enforcement purposes. 2.6.8 Limitations on Lessors’ Actions Following Termination The parties to a lease are generally free to agree on default interest (including compounded interest). In addition, a lessor could claim damages from the les - see for failure to return the aircraft after termination in accordance with the lease. A grossly imbalanced default or compounded inter - est clause may be unenforceable ( sittenwidrig ) under Austrian law (eg, if the interest exceeds the principal amount). 2.6.9 Lessor’s Requirement to Pay Taxes/Fees Subject to applicable double tax treaties, a lessor under an aircraft lease agreement is liable to pay Aus - trian (corporate) income tax in connection with the performance or enforcement of such lease agreement if the lessor is subject to unlimited income taxation or
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