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Contractual penalty: Jurisdiction of the regional courts in competition law

The regional courts have exclusive jurisdiction for disputes concerning contractual penalty promises in competition law.

According to the BGH, the exclusive jurisdiction of the regional courts does not only apply to claims arising directly from the Unfair Competition Act (UWG).

In an obiter dictum in its ruling dated October 19, 2016 (I ZR 93/15), the BGH clarified that the regional courts also have subject matter jurisdiction for claims arising from contractual penalties.

Contractual penalty promise a “claim based on this law”?

In cases where the claims arise from cease and desist agreements or are based on contractual penalty promises, jurisdiction has been disputed until now.

The contract to cease and desist under competition law obliges the debtor to cease and desist from an unlawful act in accordance with the German Act Against Unfair Competition (UWG). It has sometimes been argued that claims arising from such an agreement cannot be asserted pursuant to Section 13 para. 1 sentence 1 UWG “on the basis of this law” .

Section 13 para. 1 sentence 1 UWG states:

The regional courts shall have exclusive jurisdiction for all civil disputes in which a claim is asserted on the basis of this Act.

Exclusive jurisdiction of the regional courts for competition law disputes disputes

The BGH provided clarification with its ruling. The contractual obligation replaces the statutory claim. Thus, the claim is at least indirectly “basedon this law” and the regional courts have exclusive jurisdiction.

In its reasoning, the BGH further states that the legislator’s aim in creating the new Section 13 para. 1 sentence 1 UWG, the legislator aimed to establish exclusive jurisdiction of the regional courts in competition matters irrespective of the value in dispute. The existing expertise and the necessary experience of the regional courts in competition matters should be utilized.

Equivalence with trademark law, patent law and design law

In justification, the Federal Court of Justice also points to the equality with trademark law, utility model law, design law and patent law (Section 140 (1) MarkenG, Section 27 (1) GebrMG, Section 52 (1) DesignG, Section 143 (1) PatG). This ultimately leads to further harmonization of industrial property protection.

No clarification of the issue of the flying jurisdiction

The decision of the BGH only relates to the subject matter jurisdiction of the regional courts. In its decision, the BGH left open the extent to which local jurisdiction also applies to competition law disputes arising from cease and desist agreements with the regulations on the “flying jurisdiction” (Section 14 (2) sentence 1 UWG).

§ However, Section 14 UWG, like Section 13 UWG, refers to actions “on the basis of this Act“. In view of the identical wording, a uniform interpretation of the two provisions is obvious. The application of the “flying jurisdiction” in cases of contractual penalty proceedings under competition law is therefore quite likely in the future.

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